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15 Jun 2017 5:39 PM, Trends Mahesh Vyas

Limits to accelerating completion of road projects

The Ministry of Road Transport and Highways (MoRTH) is taking big strides in building roads in India. According to MoRTH’s press release on Press Information Bureau (PIB) on 18 April 2017, construction of 8,231 kilometers of roads was completed during 2016-17. A report in Financial Express on June 12 mentioned that 8,142 km of roads were built in the year. Both estimates indicate major progress in road building, compared to our past records.

But, both estimates seem to be a bit of an overstatement if we take into account that till February only 6,604 km was completed, according to a release by PIB on 9 March 2017. It is difficult to imagine the building of 1,627 kms of roads in just one month.

It would be safe to assume that construction of over 7,400 km of roads was completed during 2016-17.

This performance in 2016-17 compares very well with the 6,061 kilometers completed in 2015-16 which in turn was much better than the 4,410 kilometers completed in 2014-15. Evidently, the slowdown in road building witnessed in 2013-14 and 2014-15 has been reversed.

MoRTH provides such data only from 2009-10. This shows that during 2009-10 through 2012-13 about 5,000 kms of roads were built during a year. This fell to about 4,300 kms in 2013-14 and 2014-15. The pace of building roads picked up only in the last two years, i.e 2015-16 and 2016-17.

The Ministry has set a target of building 15,000 kms of roads during 2017-18. It had set the same target for 2016-17. We missed the target by a big margin in 2016-17 and may miss it again by a substantial margin in 2017-18 as well.

The pace of building roads was 22.6 kms per day in 2016-17. According to media reports this increased to an average of 26.6 kms per day during April and May, with May itself clocking 30 kms per day. The Ministry’s target is 41 kms per day during 2017-18.

The constraint to further substantial growth in 2017-18 is that the stock of projects for which awards were made 3-5 years ago is likely depleted.

Bids awarded for road projects have been rising rapidly recently. They have risen from less than 2,000 kms in 2012-13 to over 10,000 kms in 2015-16. In the first nine months of 2016-17, they had reached 7,000 kms.

But, this improvement in bids awarded is likely to make a difference only by 2020. It is possible that we may, at best, see a stagnation in roads completed at the current level of about 22 kms per day because of the sharp fall in bids awarded during 2012-13 and 2013-14.

Bids awarded during the last two years is the same as they were about five years ago, during 2010-11 and 2011-12. It is these five-year-ago awards that are fructifying into new completions today. Road projects have a gestation period of between 3 and 5 years. A normal 100-km road project is expected to be completed in 3-4 years but, it often takes more than that. If the terrain is difficult, the time taken can be much bigger.

Projects awarded during 2010-12 could have encountered uncertainties during 2013-15 as the laws on land acquisition changed, the government changed and tried hard to reverse some of the provisions of the new law. Implementation could pick up pace only after these uncertainties were laid to rest.

During 2017-18 we should be seeing completion of projects that were awarded during 2012-13 and 2013-14. This was the period of a sharp fall in awards. The combined awards during these two years was half of the awards made in 2015-16. It is therefore quite possible that the pace of building roads may fall from its current level of about 22 kms per day.

Improvement in bids awards in 2014-15 could show results in 2018-19 and the real improvement in roads construction is more likely in 2020.

While the MoRTH makes efforts to accelerate the pace of building roads and also to release fast frequency data on roads built, it needs to also accelerate the publication of the Basic Road Statistics of India, which provides comprehensive statistics on roads built in the country. The last publication provides data till 2014-15. This shows that we added 69,658 kms to the stock of our roads in the year. This includes 6,704 kms of national highways, much more than the 4,410 kms shown by the Ministry in its Annual Report. The difference in 2012-13 is much higher - 12,171 kms in Basic Statistics against 5,732 kms in the Annual Report.