The National Highways Authority of India (NHAI) has completed construction of nearly 1,900 km of highways so far in the current financial year, leaving 57 percent of its target for completion over the next three months, multiple sources aware of the development told CNBC-TV18.
While NHAI had set an ambitious target of 4,462-km road construction for the current financial year under the first phase of Bharatmala Pariyojana, it may be able to finish the fiscal with around 4,000 km, sources added.
For the current financial year, it has set a target of awarding 7,800 km of highway projects, subject to pre-construction clearance, land availability and project viability. In 2018-19, NHAI awarded 5,493 km of national highways and constructed 3,320 km of national highways.
The target of project award for the current fiscal is over 40 percent higher than what was awarded last year while the estimate for construction is 34 percent more than what was achieved in the previous fiscal.
"The remaining months of the fiscal are likely to witness a faster pace of road construction. So around 4,000 km should be achieved," a government official said.
National Highways Authority of India is one of the implementing agencies for execution of Bharatmala Pariyojana Phase-I.
The government of India had approved Bharatmala Pariyojana Phase-I in October 2017 with an aggregate length of about 34,800 km, including 10,000 km residual NHDP (National Highway Development Project) stretches, at an estimated outlay of Rs 5.35 lakh crore. The government aims to complete the first phase of Bharatmala Pariyojana by 2021-22.
"After a brisk growth from fiscal 2015, the pace of awarding of highway projects is expected to slow down in fiscal 2020. This is because the focus is shifting to completing over 50,000 km of awarded projects," CRISIL said in its Infrastructure Advisory Yearbook 2019.
Continued delay in achieving financial closure for new projects, the slow pace of awarding owing to lengthy approvals and clearance, limited appetite for PPP projects are some of the challenges being faced by the roads and highways sector, CRISIL had said in its latest infrastructure advisory.
"Banks are becoming conservative in lending to private players in the roads and highways sector. The challenges are especially acute for mid-sized players that have recently won projects from the NHAI. Banks are also wary of the wide difference in costs estimated by the bidder and the NHAI in several cases," CRISIL added.
Simplification of land acquisition rules, sharing of land acquisition cost by states are also important for the sector, CRISIL said.