Delay in awarding the contract forces National Asphalt to withdraw from the road connectivity project
The National Highways Authority of India (NHAI) has cancelled the decade-old Chennai port-Ennore road connectivity project since “it could not award it on time.”
Government sources said the contractor — National Asphalt – had withdrawn from the project due to delay in awarding the contract that led NHAI to cancel it.
Officials at Chennai Port, one of the stakeholders in the project, too confirmed the development and said the project would be revisited by NHAI and a retender was expected in the next two months.
Business Standard in October had reported that the Chennai port-Ennore road connectivity project had hit a roadblock with the NHAI stating that “it would wind up the project” if the Chennai Port Trust (ChPT) fails to pay its share of Rs 300 crore by October 20.
However, other reasons due to which the project could not be awarded include slow rehabilitation work and delay in releasing the fund by the shipping ministry.
The Ennore Manali Road Improvement Project, conceived in 1998, has been under implementation since the last 10 years. The project envisages improvement of a 30-kilometre road network in north Chennai, which connects all the container freight stations handling containers for the Chennai port.
The project is estimated to be around Rs 600 crore, of which only Rs 267 crore is the drawing and construction cost. According to industry experts, when the project was originally conceptualised in 1998, the total project cost was around Rs 100 crore.
The delay in executing the project was resulting in a loss of Rs 75 lakh a day to various logistics operators. Also, 350 accidents were reported of which 30 people died last year alone.
“The industry and trade were looking forward to this project since the port and terminal are getting congested due to vehicle movements at North Chennai, which connects Chennai port,” S Raghavan, secretary, Southern India Chamber of Commerce and Industry, said, adding the government and other stakeholders should reconsider the decision and take immediate steps to commence the project.
According to industry representatives, vehicle movement has now increased to 4,350 a day . Had the road been properly laid, the trade could have generated Rs 30,000 crore business in the last five years, they said.
Another trade representative said the Chennai Container Terminal, inside Chennai port, was handling 100,000 boxes every month. This could have gone up by 60 per cent if the connectivity took shape. It could have also brought in revenues of Rs 1,000 crore for the government since companies have to pay Rs 2.5 lakh duty for each container.
In 2003, a special purpose vehicle – Chennai-Ennore Port Road Company – was formed along with NHAI and the Tamil Nadu government, in which ChPT was one of the partners. Subsequently, one of the stakeholders of the SPV – Ennore port – pulled out from the project.
