Covid-19 lockdown: Highway construction may gather pace after monsoon

Though the government’s focus would be more on completion of contracts over bidding out the new ones, labour and supply chain disruptions, coupled with monsoons, in the second quarter are likely to prevent full pick-up in constructions.
Road construction, which started in some areas after certain relaxations in lockdown, is expected to be more back-loaded, essentially putting the focus on completing contracts rather than bidding out new ones.

 
Experts say it will take three-four months for construction to normalise and the fresh bidding of contracts is some time away.
Currently, it is estimated that 30-40 per cent of the projects have started because in some cases the authorities were able to retain workers.

 
“Awarding projects would be affected as companies may not be willing to take up new ones,” said Kushal Kumar Singh, partner, Deloitte India.

 
In the case of engineering-procurement-construction (EPC), bidding can happen now and construction can start in a month and hence manpower availability plays a crucial role.

However, in the case of build-operate-transfer (BOT) and hybrid-annuity projects, even if bidding is held today, work can begin after financial closure, which takes three-four months and by then the labour issue is likely to be resolved.

 
But there is a divergent view on this.

 
Former road secretary Vijay Chibber is of the view that the mode of construction of the project has no bearing on its start and completion at this moment.

 
“Once the project is at the implementation stage, it makes no difference whether it is EPC, BOT, or hybrid annuity. If raw material is available, there is no challenge and also the issue would be mainly project- and location-specific and not the mode of construction,” Chibber said.

Highway-construction companies have said ancillary units, the backbone of the road sector, should be allowed to operate to enable a seamless construction environment.

These industries include the cement, steel, quarrying, and forging industries.

 
The Ministry of Home Affairs (MHA) allowed opening up business in rural India from April 20.

 
In its set of guidelines for industries, the ministry mentions that for workers coming from outside, special transportation facilities will be arranged without dependence on the public transport system.

Highways Minister Nitin Gadkari has said that precautions should be adhered to at project construction sites and asked the National Highways Authority of India and National Highways and Infrastructure Development Corporation to evaluate 1,300-km projects, which can be awarded immediately.

 
Another 1,500 km is ready for bidding, the minister had said.

 
At a recent review meeting the minister had with the states, a presentation was made, showing works being carried out during the lockdown period.

 
It was stated 1,315 projects, covering 49,238 km and worth Rs 5.89 trillion, were under progress.  Of those, 819, covering 30,301 km and worth about Rs 3.06 trillion, were delayed.

 
It showed state-specific issues like land acquisition and environment clearance delaying project implementation.

 


Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel