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Road Ministry likely to seek greater autonomy from new government

26 May 2014 Evaluate

The Ministry of Road Transport and Highways may seek greater autonomy in decision making from new government to speed up the implementation of high projects. Ministry is of the view that various inter- ministerial groups should be dissolved as they only delay project implementation.

Over the past few years, road sector is struggling with slowdown and the Road Ministry had blamed the issues like financial stress, land acquisition delays and environmental clearances and enhanced construction risk for the current downturn in the sector. During FY14, the Ministry has managed to award around 2,000 km of road projects as against the set target of 9,000 km, while in FY13 only 1,116 km of projects were awarded against a target of 9,500 km.

The National Highways Authority of India (NHAI) has planned to award around 5,000-km highway contracts in FY15. As per the NHAI work plan, about 2,300 km of highway projects with a total project cost of over Rs 15,000 crore will be awarded through cash contracts, or Engineering, Procurement, Construction (EPC) mode and 3,000 km projects with cost of over Rs 35,000 crore to be bid via the public-private partnership (PPP) mode. So far, bidders’ response to PPP mode remained poor and NHAI would convert PPP to the EPC mode if no bids are received. Over the past few months, developers’ interest towards PPP mode projects has declined due to concerns over raising equity for highways PPPs.

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