Experts said in the first four or five months of the financial year (2019-20 or FY20), there was an overall slowdown, but things were looking a little better now.
“Projects awarded in March and April are reaching financial closure now. This might have contributed to the uptick (in credit demand) in recent months,” said Kushal Kumar Singh, partner, Deloitte India.
Another reason for this could be strict adherence to the ROW (Right of Way) land.
Singh said, “Now the projects are not awarded unless the land acquisition for ROW is complete.”
Earlier major expressway developers and contractors complained that the biggest hindrance to infrastructure development was ROW acquisition.
Not everyone, however, is convinced that the sudden spurt in demand for loans has anything to do with an uptick in projects. Some feel it is on account of refinancing of debt by road construction
is expected to shift its focus to execution instead of awarding new road projects, thanks to soaring land-acquisition costs and rising debt on its books, according to a recent report by rating agency CRISIL.
According to the report, from FY20 to FY22, roads projects awarded — hybrid annuity model, build-operate-transfer model, and engineering-procurement-construction model — could come down to 12,000-13,000 km from 14,000 km between FY17 and FY19.
In September this year, the Prime Minister’s Office (PMO) wrote a letter to the NHAI, outlining suggestions for reorganising its portfolio, checking on the commercial viability of projects, and monetising assets.
In a written reply to Parliament on November 28, Road Transport and Highways Minister Nitin Gadkari said, “Award of road projects covering a length of 4,471 km with an approximate cost of Rs 50,000 crore has been targeted during next three months.”
As many as 168 road projects, covering a length of 3,215 km, have been awarded since April this year.
The government had approved the Bharatmala Pariyojana Phase I in October, 2017, with an aggregate length of about 34,800 km (including 10,000 km residual National Highways Development Project stretches) at an estimated outlay of Rs 5.35 trillion.
is one of the implementing agencies for the execution of the Bharatmala Pariyojana Phase-I. For the current financial year, the target of construction is 4,462 km and the target of award is 7,800 km subject, to pre-construction clearance, land availability, and project viability.