Cut road construction costs: Road Ministry to NHAI

| | New Delhi
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Cut road construction costs: Road Ministry to NHAI

Friday, 18 October 2019 | Deepak Kumar Jha | New Delhi

In the wake of funds crunch hitting major road projects, the Road Ministry has asked the Central road making agency NHAI (National Highways Authority of India) to explore reducing the road infrastructure construction costs through new technology and innovative means in a bid to make projects financially viable.

The moves comes after Road Transport and Highways Minister Nitin Gadkari in a review meeting last week suggested the Ministry and NHAI officials to ponder over the idea of rationalising the construction costs.

According to official sources, in an effort to boost the morale of officials involved in highway constructions, Gadkari conveyed them to focus on delivering projects rather than getting stuck in procedures.

In the current fiscal, NHAI has set a target of constructing 4,200 kms of roads and awarding projects of cumulative 6,000 kms. The Ministry has projected a revenue deficit of over Rs 37,000 crore to the finance ministry.

According to the Ministry, per-kilometre cost of developing a two-lane highway was between Rs 11- 12 crore, while four-lane highway was around Rs 30 crore per km till three years ago and this costing has cumulatively gone up by 30 percent.

"The Minister assured us (officers) there is no dearth of funds for projects, and even long-term financial institutions are willing to lend to the authority and don't get de-motivated by baseless rumours with no substance. He (Gadkari) shared that that PMO is in full cooperation and that they want delivery," said the official.

The PMO in August this year had questioned the Gadkari led Ministry for for unplanned and excessive expansion of roads by declaring state highways as national highways which ultimately impacted the central exchequer.

Ministry sources said NHAI has initiated discussions with the Indian Institutes of Technology (IITs) for research and development to bring down the cost of road construction with improved quality.

IITs will do a comprehensive study on the alternative environment friendly methods for road and highway constructions and simultaneously maintaining the quality. In the last couple of years construction cost has increased by almost 30 percent by the given materials, substances and methods in practice now

To keep up with the pace of highway development of 40 km a day the road Ministry sources said that projects spread across 10 states will now come up on the public-private partnership (PPP) model on build-operate-transfer (toll) basis. The stretches have been selected after consultations with bidders in States including Haryana, Maharashtra, Tamil Nadu, West Bengal, Chhattisgarh and Madhya Pradesh.

This exercise is NHAI's attempt at reviving the BOT model of construction. Under BOT, private players build, operate and maintain the road for a specified period of time before transferring the asset back to the Government. In the case of HAM, the central Government bears 40 per cent of the project cost and the remaining amount is arranged by the developer.

The Centre has made fund allocation to NHAI for works under the Bharatmala Project and the money will come from the Central Road Infrastructure Fund (CRIF), Permanent Bridges Fee Fund (PBFF) and Monetisation of National Highways Fund (MNHF).

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