Private capital is pivotal
ECONOMY & POLICY

Private capital is pivotal

It was magical. The 8th India Construction Festival held on October 14 in Mumbai was fast-paced, packed with knowledge, interspersed with high-level networking, and designed to elevate the mood with...

It was magical. The 8th India Construction Festival held on October 14 in Mumbai was fast-paced, packed with knowledge, interspersed with high-level networking, and designed to elevate the mood with the inspiration created by the presence of the best of the best in the construction industry. We are fortunate to have seen the past 25 years of this building, infrastructure and construction industry as the entire nation now supports the compelling need for infrastructure and efforts are converging at all levels to realise the dream of a powerful economy. Yet we still need several corrective measures. Our governments have not been empowered with majority support often enough and when they have, there has been little or no political will to liberate our economy from the clutches of corruption and cronyism, except during 1991. Now, the current regime is on the path of growth and yet despite the unbridled intention, it finds it difficult to keep the momentum. I highlighted the lags during the 12th India Roads Conference, especially the speed at which we have been constructing roads, which has fallen during the April-September 2022 period to 19 km per day against over 22 km per day during the same period in the previous year. Interestingly, the official from the National Highways Authority of India claimed that the spending on roads had been increasing all through the past eight years. I had my opportunity to point out what I have been lamenting in this column time and again: that we are spending too much of that money on land acquisition and less on project execution. Construction equipment companies are seeing orders drying up and contractors are bidding lower to keep the order book fat and impressive. Further, where is the application of the QCBS system over L1? It seems this is only being applied to tenders of Rs.10 crore and under to consultancy contracts, etc. This defeats a good idea completely. Appeals on arbitration orders have also been discouraged and this, too, is not being observed in its true spirit. So, the ideas have reached the right ears, they have also been translated executors are failing to implement them in true form and spirit. For the land acquisition issue, the only way now left for the Government is to initiate a Land Lease Model Law for leasing farmland for national infrastructure projects. This can be brought in quickly and nearly 40 per cent of the amount spent on roads can be saved from investment into land acquisition and utilised to accelerate EPC contracts. The MoRTH Secretary recently assured that he is confident of building 12,000 km this financial year, which will give us a construction rate of 33 km per day. But having slowed construction to just 4,559 km in the first six months of this financial year, the pace of construction would have to accelerate to 47 km per day in the next six months. FDI is currently the best solution for all the external pressures our economy is facing. If FDI numbers hit a $100 billion this financial year, we would be better off. As we have already mooted the PLI schemes, this can be done at a rapid pace. However, we also need to bring in labour reforms as these are a necessary condition for attracting these investments. With financial constraints at hand, does the Government have the capability to accelerate its infusion as laid out in the National Infrastructure Pipeline? Indications are that the Government is now shying away from investment proposals and it is the private sector that is driving the economy. Founder & Editor-in-Chief , Pratap Padode

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