Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
11,274.20569.4
Stock Analysis, IPO, Mutual Funds, Bonds & More

Fund crunch, land cost may slow down highway projects

, TNN|
May 13, 2019, 10.36 AM IST
0Comments
Agencies
highways-indi
On May 2, NHAI came out with a list of works that would be taken up immediately totalling about 4,600 km (high priority-1) and another 7,400km under high priority-2 list.

Highlights

  • The next government faces the prospect of a sharp slowdown in highway development due to funding constraints
  • The situation is so grim that in Jharkhand, J&K, Uttarakhand, Delhi and Goa, NHAI does not plan to take up any stretch this year
(This story originally appeared in on May 13, 2019)
NEW DELHI: After a major thrust on highway during the last five years, the next government faces the prospect of a sharp slowdown in highway development due to funding constraints and rising project costs, primarily on account of a spike in land acquisition rates. The result: Only 4,600km of the announced 12,000km may actually be taken up during the current financial year.

The situation is so grim that in Jharkhand, J&K, Uttarakhand, Delhi and Goa, NHAI does not plan to take up any stretch this year. In Bihar, work for only 4km will be taken up, with 70km planned in Telangana and 76km in Kerala. Kerala was the first state to flag how only 76km out of the identified 966km was put in the top priority list, which snowballed into a political controversy, forcing NHAI to amend its order. In the case of Tamil Nadu, only 299km out of the identified 1,660km was categorised as top priority and in Karnataka it was 267km out of 11,57 km.

On May 2, NHAI came out with a list of works that would be taken up immediately across states totalling about 4,600 km (high priority-1) and another 7,400km were put under high priority-2 list. In its policy guidelines, NHAI had directed it field officers “not to proceed with land acquisition” in respect of priority-II projects But following objection from Kerala, NHAI in its amended order said the priority-I list is to be taken up on priority.

“However, it is not to be construed that the projects in high-2 list are dropped. The projects in high-2 list may be continued after seeking specific approval of NHAI HQ by providing the status of land acquisition as on May 2, 2019 and traffic on these projects.” Officials said. NHAI is caught in a crisis as finance ministry has asked it to take up works after factoring in fund availability. On the other hand, when it puts projects on hold, states protest.

“We have the mandate to implement 24,800 km under Bharatmala and 10,000km under NH Development Programme. The cost of Bharatmala has increased from Rs 5.35 lakh crore to almost Rs 8 lakh crore. We had estimated Rs 48,000 crore to acquire land for 34,000 km, which is little over Rs 1 crore per km. But so far we have paid nearly Rs 6 crore to acquire land for every km,” said an official who did not wish to be named.

TOI on April 26 had first reported that finance ministry and Niti Aayog had asked NHAI to get their priorities right and focus on building highways where they are needed more instead of taking up projects randomly. This had paved the way for coming out with the list of priority-I and II stretches.
Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service