Road work as represented by national highways (NHs) did not slow down last year. Chairman of National Highways Authority of India (NHAI), SS Sandhu spoke to Dipak Kumar Dash about the current year’s prospects:
NH construction peaked in 2020-21 despite the first spell of Covid-19. How will the second wave impact work?
Despite losing the best construction months to Covid-related lockdown, NHAI constructed 4,192km of NHs last year and this is the highest ever highway construction achieved in a financial year by us. Focus has been on creating expressways of 6 or more lanes which require more efforts and resources as compared to earlier 2-4 lane highways. NHAI has constructed 18,500 lane km during 2020-21 which comes out to over 50 lane km per day. At present, the country is battling a second wave. We are taking stock of the situation and are assessing the impact it will have on different projects across states.
How are you planning to deal with the current surge?
Construction companies have learnt from the last experience. NHAI has advised all its officials, contractors, consultants to take proper preparatory measures to restrict the Covid impact on highway construction projects. All site officers and stakeholders (contractors and concessionaires) have been asked to follow Covid protocol and get the maximum number of workforce vaccinated as early as possible as per the government policy. We are confident that we will achieve our targets this year as well. In fact, we are trying to speed up the construction in brownfield (existing) projects in view of less traffic movement on the NHs due to Covid-related restrictions and lockdowns in several states.
Poor maintenance of NHs has been a concern. People pay tolls.
NHAI is committed to provide safe, smooth and seamless travel experience on NHs. We have done the rating of 19,000 km of completed 4-6 lane NHs and expressways covering 343 toll plazas and this is in public domain. This is the first such initiative in the road sector. It will put social and moral pressure on the companies and firms who are ranked low in maintenance of roads. The highway rating is a dynamic activity and shall be done twice in a year, so as to give an opportunity to the stakeholders to improve on the parameters they lag behind in. In order to deal with the lapses in highway development, NHAI has issued a strict policy for penal action against defaulting firms and personnel. It allows NHAI to impose graded penalties that include heavy fines, debarment and ban on bidding for any future NHAI projects for up to three years. NHAI officials are also equally responsible and they are bound to face penal action. We have also introduced independent inspection of the ongoing NH projects by involving reputed retired government officials and 111 projects have been identified so far.
Highway construction is becoming more capital intensive. What’s your funding plan?
The government has shown confidence in the road sector by making the highest ever outlay of Rs 1.18 lakh crore this year. Most of the NHs which NHAI is developing are viable and can pay back from its toll in 15-30 years, depending upon traffic volume. All our projects are bankable. Moreover, all the assets that NHAI has created in the past will also fund the future projects. Under the National Infrastructure Pipeline (NIP) programme, overall capital expenditure of Rs 20.33 lakh crore will be incurred in the road sector in the next 4-5 years. Also, NHAI has successfully leveraged asset monetisation through toll, operate and transfer (TOT) where we have already raised Rs 17,000 crore and have developed a pipeline of projects worth Rs 75,000 crore where every few months we will be coming up with more and more roads under TOT. NHAI Infrastructure Investment Trust (InvIT) is another platform to monetise roads over the next 3-5 years. It is being set up as a private listed InvIT to attract large institutional investors. Highway construction by the private sector on the PPP model had come to a halt in the last few years and we are in the process of reviving them through the Build-Operate-Transfer (Toll) mode.
Hasn’t NHAI been more like a tender floating agency, delegating all tasks to consultants and private players?
NHAI, right from the beginning, was conceived as an organisation which will have only a core team of officials to take decisions and all other activities are outsourced. The delivery of outsourced activities is closely monitored by NHAI officials. This has proved to be a very successful model as NHAI has been able to do works worth Rs 1.25 lakh crore a year with the limited strength of about 900 employees. NHAI’s establishment expense amounts to about 1% of its annual budget whereas in any traditional department where all the works are done by the regular employees, such expense is 10-30% or even more.
Views expressed above are the author’s own.
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