Is 60 kms per day a 'Mission Impossible'?

01 Oct 2022 Long Read

The road story in India has been trending since the beginning of this financial year despite tall targets being expounded by the ministry. To put this in perspective, here are the facts:

The pace of road construction has dropped to 19 km / day from last financial year’s performance of 37 km / day. This fall in the pace is hurting contractors and construction equipment manufacturers.

Financial stability of road contractors is important. However, last year, in order to boost the number of bidders, norms were diluted to include small packages of roads, which allowed the entry of small contractors. On the Hybrid Annuity Model (HAM) front, aggressive bidding led to extremely low Operations & Maintenance (O&M) costs being quoted during HAM bids. In May, this norm has been tweaked and now only the Bid Project Cost (BPC) would be the criteria for HAM bid selection and the O&M would be a percentage factor of the BPC. This will thwart ‘aggressive bidding’.

Yet, challenges remain in enhancing the pace of road construction. The current average of 19 km / day to jump to 60 km / day requires that 21,900 km are constructed during the year. Take a look at the record for past three years:

The ministry had constructed 10,237 km in 2019-20, 13,327 km in 2020-21 and 10,457 km in 2021-22. (see graph). The current target requires an increase of over 64 per cent jump above the construction pace during 2020-21. Between September 2022 and March 2023, the ministry needs to construct 18,988 km, which means a pace of over 90 km / day!

Is this even possible? Even if we look at the corelation of kilometres awarded and those constructed, the ministry would need to award.

22,300 km or thereabouts. This is far beyond the capacity of the current framework given the past track record. However, Union Minister Nitin Gadkari in June has stated that they would look at awarding 18,000 km this financial year, which would fall short of making the 60 km / day target. If the awards were in the region of 18,000 km / day this year, then we would reach to about 40 km / day of construction.

The only other factor is that several states are going for elections, and they have begun accelerating their plans to achieve their stated targets. There are nearly 12 state elections due until May 2024, which is when the general elections will be held.

Going by the trend seen in the elections in Uttar Pradesh, which had a development agenda, it is likely that we will see a positive infrastructure push in the states of Gujarat (elections scheduled in December this year), the Northeast, Karnataka, Chhattisgarh, Madhya Pradesh and Rajasthan.

Incidentally, these states have been actively using more infrastructure funds than the rest. Maharashtra too, is likely to push hard to spending on expressways on the lines of Uttar Pradesh. But then too, there are issues in actual execution. The Maha Samruddhi Marg (the Mumbai- Nagpur Expressway) has experienced delays despite a roaring start. However, our INFRASTRUCTURE TODAY Conclave provided a succour as experts assured the city projects being on track. The Coastal Road and the Mumbai Trans Harbour Link are on schedule as per SV Desai, Director, L&T; and the Navi Mumbai International Airport is on schedule to be completed by December 2024 as per the CEO, Captain BVJK Sharma. The recent steps in the form of PM Gati Shakti and National Logistics Policy have indicated that the government is proactively trying to plug the gaps. Our India Construction Festival on 12th India Roads Conference, the 10th Equipment India Awards and the 20th Construction World Global awards.

Stay tuned to laud the winners! Best wishes for the festive season!

Founder & Editor-in-Chief, Pratap Padode

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