Highway construction: NHAI sets ambitious target of 4,600 km for FY22

Despite the pandemic still ravaging the nation and its economy, the National Highways Authority of India (NHAI) has set an ambitious target to build new highways with a combined length of 4,600 km in the current fiscal year. Last fiscal, NHAI constructed a record 4,192 km of highways, up from 3,979 km developed in 2019-20 and 3,380 km in 2018-19.

Though the target for the current year appears to be a tall order, the NHAI believes that it could meet it with reliance on EPC projects and HAM projects. The authority has a robust stream of funds including budgetary outlays, borrowings, and the funds being realised through the toll-operate-transfer (TOT) route.

NHAI Chairman S S Sandhu said the authority was confident in achieving the target set for the current fiscal even as there has been some impact on highway construction lately owing to a pandemic-induced labour shortage in some sites. “Awards this year will be much more than construction target, but that is being finalised,” Sandhu told FE.

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NHAI awarded 141 projects for a length of 4,788 km in 2020-21. The length awarded in 2020-21 was the highest in the last three years, compared to 3,211 km in 2019-20 and 2,222 km in 2018-19.

Of the total projects awarded in 2020-21, two were on Build-Operate-Transfer (Toll) for a length of 132 km, 69 projects for a length of 2,609 km were on Hybrid Annuity Model (HAM) and the balance 70 projects for a length of 2,047 km are on Engineering, Procurement and Construction (EPC) model.

The capital cost of the projects awarded in 2020-21 amounts to Rs 1,71,226 crore. The capital cost of the projects awarded in 2019-20 and 2018-19 was Rs 81,324 crore and Rs 64,009 crore respectively. NHAI had earlier said that it hopes to award projects worth around Rs 2.25 lakh crore in the current fiscal.

Asked whether lockdown and restrictions on mobility were impacting highway construction, Sandhu said, “There is some impact, not much. The impact varies from place to place. At some places, there is no impact; but at other places, 10-15% of the workers have gone back. Overall, as of now, the impact is minimal or marginal.”

All executing agencies including the NHAI constructed a record of 13,298 km highways in 2020-21, up from 10,237 km in 2019-20. Minister for road transport and highways hope that construction would touch 40 km/day in 2021-22 from 36.4 km a day in 2020-21.