Fact Check

Rolling Out The Highways

STORY

The great highway loot

The Indian Express, June 12

The contractor-engineer-politician troika bloated costs and public-sector banks lent recklessly, turning highway projects into NPAs. Several projects have turned into NPAs as the inflated loans could not be repaid from toll revenue. However, in the absence of penal or remedial action, it appears the government has not yet recognised the malfeasance. There is much cleaning up to be done and rejuvenation of the National Highways Authority of India is critical for mobilising capital and entrepreneurs.

THE PROBLEM

The article, written by Gajendra Haldea who had authored the NHAI’s model documents, actually refers to corruption and related problems concerning the NHAI and highway projects that date back to the previous administration at the Centre. While it is undeniable that further remedial measures are necessary, the article ignores reforms and performance improvements that have already taken place in the NHAI in the last three years — a performance, in terms of scale and pace of construction and finances, that would not have been possible if things had not changed.

THE FACTS

  • Highway construction in 2016-17 touched an all-time high of 8,144 km, which is 33% more than last year.
  • Award of works rose to the maximum at 16,031 km, which is 60% more than last year.
  • NHAI completed construction and expansion of 2,628 km of national highways (NH) till March 31.
  • Out of 73 stuck road projects at the start of the current government’s term, only nine are still languishing for varied reasons.
  • NHAI has moved away from acquiring land after announcing the project. It now tenders new highways only after securing at least 90% of land along the corridor.
  • To incentivise private-sector participation, the government is clearing projects stuck in arbitration.
  • NHAI has moved to a hybrid-annuity model (HAM) where 40% of the construction cost is being funded by the highways authority.

ADDITIONAL FACTS

  • Under the ambitious Bharatmala project, NHAI will take up 82 projects, to improve port connectivity. Around 1,500 major bridges and 200 rail bridges are part of this.
  • NHAI recently dedicated to the nation the 9.2 km Chenani-Nashri tunnel incorporating the latest technology, such as emergency evacuation and accident detection system.
  • NHAI launched the NHAI Masala Bond issue at the London Stock Exchange. Rupee-denominated bonds, popularly known as masala bonds, will bring more transparency to the bond market.

The facts stated above would appear to mitigate the apprehensions raised by the article, at least as far as the NHAI is concerned.  In a short span of time, India has managed to drive private participation in the highway construction sector as well as adopt a more reasonable model for implementing projects. As per a Crisil report, project awards in the roads sector have picked up thanks to the new Hybrid Annuity Model (HAM) and Engineering, Procurement and Construction (EPC) projects.

Transport infrastructure work as a whole has been progressing at a record pace. Highways are being laid much faster than they were three years ago, construction contracts are being awarded speedily, and public-sector ports are outperforming their private-sector counterparts. The NHAI, as can be seen, is part of this larger success story. Highway construction itself touched an all-time high at 8,144 km in 2016-17, which is 33% more than the year before. By the same token, the award of works also increased to 16,031 km, 60% more than last year. Taken together, these facts testify to the cleaning up that is already underway. They also indicate that the article’s gloomy forecast for the NHAI will likely not come to pass.

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