New procedures for approval of highway projects under the NHDP affected its bankability, resulting in award of barely 13 per cent of the target during 2009-10, the Economic Survey today said.
"Against the target of awarding projects for a total length of about 9,800 km under various phases of National Highways Development Project (NHDP) during 2009-10, projects have been awarded for a total length of about 1,285 km up to November 2009," the pre-Budget Survey said.
Attributing delays to reasons like introduction of new methods for approval of PPP (public-private-partnership) projects, it said the factors that affected the bankability of projects included "lenders' perception of high risk" and "lingering doubts of lenders on interpretation of many provisions of the new MCAs (model concession agreement)".
In addition, the bottlenecks identified for slow progress in road projects included delays in land acquisition and environment clearances.
In 2009-10, against the target of developing about 3,165 km of highways under NHDP, the achievement up to November 2009 has been that of about 1,490 km only.
The Survey, depicting the health of the economy, however, indicated optimistic outlook saying recent initiatives like restructuring of projects to reduce cost and measures for expeditious land acquisition are "expected to increase the pace of awards under NHDP."
The Ministry of Road Transport and Highways has set an ambitious target of completion of 20 km of national highways per day, translating to 35,000 km during the next five years (2009-14) with a view to expedite the progress of the NHDP.
The survey said the National Highways Authority of India (NHAI) has already formulated work plans for awarding 12,000 km each during 2009-10 and 2010-11.
On financing of the projects, the Survey said a part of the fuel cess is allocated to the NHAI to fund its implementation.
"The government of India has also taken loans for financing various NHDP projects from the World Bank ($1,965 million), Asian Development Bank ($1,605 million) and Japan Bank for International Cooperation (32,060 million yen), which are passed on to the NHAI partly in the form of grant and partly as loan," the Survey said.
