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Experts decode the progress of the Modi government's ambitious Bharatmala project

Updated : May 02, 2019 11:27 PM IST

In its manifesto released for the Lok Sabha elections 2019, the Bharatiya Janata Party (BJP) has committed to construct 60,000 kilometres of National Highways in the next five years if voted back to power.

The ruling party has claimed that the country has undergone unprecedented "upgrade" in the past five years and has seen the connection of 91 percent of villages with rural roads and that BJP will continue their "existing milestone" of constructing roads at an unprecedented pace.

According to the manifesto, the goal is to double the length of the National Highways by 2022 and states that the ruling party will complete the Phase 1 of the Bharatmala Project with speed and efficiency and will launch Bharatmala 2.0 project.

Does the past progress of the Bharatmala and road construction, give us confidence that this can be done by the Narendra Modi government if voted back to power?

CNBC-TV18 spoke to Brijeshwar Singh, former chairman of NHAI; Manish Agarwal, partner, leader - infrastructure at PWC; Amod Khanorkar, senior director at CARE Ratings and Jayant Mhaiskar, CMD of MEP Infrastructure Developers, to decode the progress, challenges, the hits and misses of the Modi government's ambitious Bharatmala project.

Singh said, "Road construction rate has been a pretty dramatic improvement over the previous government. If you take an even longer view and you go back 20 years, you can see that starting from a time when you had projects which were barely 20 kilometres in length and you had the handful of projects being awarded every year, it has gradually been a step up. It is quite clear that the current minister has been very ambitious both in terms of the targets and in terms of the awards he wants to give. If you do not set an ambitious target you cannot get a step up."

Agarwal said, "When we look at road projects, it is not really the financial feasibility but the economic impact that matters. The economic impact of connecting to every district in India is going to be significantly more than the cost of building the roads. Certainly, land acquisition is expensive but is also the issue of equity. Bharatmala has prioritised projects that have a larger economic impact particularly in terms of connecting economic centres and creating logistic zones around it. So, the impact on trade and on the competitiveness of manufacturing is also going to be significantly large in this programme."

Khanorkar said, "The way award of the project is happening and the rate at which the awards are happening, that has slowed down a bit. Over a period 2014 to 2018, there has been a good improvement in the award and the award came up to something 47 kilometres a day in 2018. However, that number has significantly dropped in 2019. The numbers that are available from April to October or so, that has dropped down to something like nine kilometres. So, the challenge is if the awards are going to be lower, then the execution could be further challenged and timely completion of the project is going to be a bit of an issue. The target is to complete the project by 2022. So, in a way, the coming two years or so, something like 40,000 odd kilometres of the award on an annual basis needs to be rolled out. That is ambitious but the government has been trying its best to take care of these issues."

Mhaiskar said, "Considering the last five years, the majority of the projects on the infrastructure side, particularly on the road sector, the government's current run rate is around 28 kilometres, which is being clocked today and 40 kilometres per day is the projected target. To my mind, I think this particular run rate is definitely achievable considering the number of projects which are already been awarded and which are under execution. In the next 2-3 years, the real focus will be on execution for the majority of the players who have bagged good amount of order books. The government did a good re-haul of the entire sector by pulling out the projects, which were languishing over a period of time. Close to 300 such projects have been brought out of the woods and government has done one-time equity infusion in these projects, which has helped those projects either get completed. So, funding is something which definitely needs to be looked into considering the rate at which the government is giving away the work."
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