Despite the Covid pandemic situation, the overall road construction in the past seven months is nearly 90% of last year while the pace for award of National Highway projects have almost doubled in this period as compared to the corresponding months last year.
According to the Road Transport Ministry, the highway award has touched 5,679 km in the past seven months compared to 2,982 km during last year.
Attributing this to relaxation of norms and smooth release of funds to highway builders, ministry officials maintain that a series of steps was undertaken as part of Atmanirbhar Bharat initiative to speed up project execution and hope that the total construction would be at par with last year by December.
The official data also show the construction has increased significantly from 210 km in April this year, which was barely 7 km per day, to 4,628 km by October end. This translates to nearly average construction of 22 km per day during the past seven months.
“The construction was severely impacted due to complete lockdown. It picked up as the restrictions on construction activities were lifted from April 20. We are confident of surpassing the total construction of last year,” ministry officials maintain.
According to National Highway Authority of India, the relaxation to release funds to highway builders was made considering the extraordinary situation. “Earlier, the norm was to release the payment linked to a particular stage of construction. Now we are releasing funds based on the work done by the highway builders every month. This has improved their cash flow and it has a direct impact on the pace of construction,” they said.
NHAI officials said this change in norm has also come as a bigger relief for highway builders executing projects under Hybrid Annuity Model. Greater pace of construction has a direct impact on employment and this has a multiplier effect on the economy.
Ministry officials said NH construction agencies have released the retention money, which is 6% of the project cost, to improve the liquidity of private road builders. Sources said the ministry is also considering reduction in the performance security by half – from 5% of the project cost to 2.5%.
While all these interventions by the government have come when the industry needed them the most, getting enough labourers still remains a challenge at many locations across states.
At best highway builders are getting 60-75% construction workers compared to last year and are hopeful of improvement on that front to further push construction.