Border, Northeast push take ministry ahead of NHAI in road project awards

The centrepiece of the previous National Democratic Alliance (NDA) government’s India Shining campaign about 15 years ago was the Golden Quadrilateral project of the National Highways Authority of India (NHAI).

Today, under another NDA government at the Centre, the situation is different. Now, it is the road transport ministry, not the NHAI, that seems to be calling the shots. The data on the number of road projects awarded between 2011-12 and 2016-17 suggests a clear trend reversal. In 2011-12, the NHAI had a larger share of projects in terms of kilometers, compared to the road ministry. By the end of 2016-17, however, the situation had gone into reverse, according to a Prabhudas Lilladher report on the road sector.

Industry executives attribute this change to reasons ranging from “cyclicality” in execution at the NHAI level, the government’s keenness to focus on border roads and the Northeast and its preference for centralising operations. “The trend is cyclical in nature and also a healthy one. As the NHAI focuses on executing projects, the road ministry has taken the lead in awarding them,” said Vinayak Chatterjee, founder and chairman of Feedback Infra, an integrated infrastructure services company.

According to the report, in 2011-12, the NHAI had farmed out more than 6,000 km, against about 3,000 km, the road ministry did. At the end of 2016-17, the ministry bid out over 11,000 km, against the NHAI’s 4,000 km. Experts such as K K Mohanty, managing director, Gammon Infrastructure, say of the projects the NHAI awarded in FY12, a few of the larger ones had to be terminated before construction or sent back for rebidding. “There is a growing focus on constructing border roads and improving the connectivity of the Northeast. These are projects that are being executed under schemes controlled directly by the road transport ministry. This is also contributing to the higher share of road project awarded by the ministry, when compared to those by the NHAI,” said Shubham Jain, vice-president and sector head, Icra. So far, road companies have not raised any concerns over dealing with the ministry or payment delays, according to him.

“There has been friction between the NHAI and the ministry in the past. Also, with the current government, there is a need to centralise awarding and other processes at the ministry level,” said a person who did not wish to be named. However, many seem not happy dealing with the ministry. 

“Generally, if one can avoid going to the minister or the ministry, it is a good thing. But, unfortunately, that is not the case with our sectors. For bureaucrats, there are no incentives to take decisions; they are worried about their pensions and the Comptroller and Auditor General proceedings. There is no environment to take bold decisions. The NHAI tends to be cautious,” said a Larsen & Toubro executive.

Road Ministry in the fast lane

  • Road ministry awarded more than 11,000 km of projects in FY17
  • Overtakes NHAI in project awards, project execution
  • Focus on border roads, Northeast connectivity projects
  • Small-sized projects help ministry with better execution

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