Border, Northeast push take ministry ahead of NHAI in road project awards

More than 15 years ago, the Bharatiya Janta Party (BJP) -led National Democratic Alliance (NDA) government of the time made an incumbent’s election pitch around the so-called ‘India Shining’. Key to this pitch was the ‘Golden Quadrilateral’ project of National Highway Authority of India (NHAI).

Today, a decade and a half later, under another BJP-led NDA government at the Centre, the scenario is quite different – now, it is the road transport ministry that seems to be calling the shots, not NHAI.

Data on the number of road projects awarded between 2011-12 and 2016-2017 suggest a clear trend reversal. In 2011-12, NHAI had a larger share of the number of kilometers awarded when compared with the road ministry. By the end of 2016-17, however, the road ministry had a larger share of the total, according to a Prabhudas Lilladher report on the road sector.

Various industry officials and experts attribute this trend change to reasons ranging from ‘cyclicality’ issues in execution at the NHAI level, the government’s keenness to focus on border roads and the Northeast, and the current government’s preference of centralising operations.

“The trend is cyclical in nature, and also a healthy one. As NHAI focuses on executing projects, the road ministry has taken a lead in awarding projects,” says Vinayak Chatterjee, founder & chairman of Feedback Infra, an integrated infrastructure services company.

According to the Prabhudas Lilladher report, in 2011-12, NHAI had bid out more than 6,000 km of road projects, against about 3,000 km the road ministry did. At the end of 2016-17, the ministry bid out over 11,000 km, against NHAI’s 4,000 km.

Experts like K KMohanty, managing director, Gammon Infrastructure, argue that of the large number of projects that NHAI awarded in FY12, a few of the larger ones had to be terminated before construction or sent back to the drawing board for re-bidding.

“There is a growing focus on the construction of border roads and improving the connectivity of the Northeast.

These are projects that are being executed under the schemes controlled directly by the road transport ministry. This is also contributing to the higher share of road project awards by the ministry when compared to those by NHAI,” says Shubham Jain, vice-president and sector head, ICRA. So far, road companies have not raised any concerns over dealing with the ministry or payment delays, he adds.

Also at play is the current government’s insistence to centralise operations. “There has been a friction between NHAI and the ministry in the past. Also, with the current government, there is a need to centralise awarding and other processes right at the ministry level,” said a person who did not wish to be named.

Many, it seems, are not happy dealing with the ministry. “Generally, if one can avoid going to the minister or the ministry, it is a good business. But, unfortunately, that is not the case with our sectors. For bureaucrats, there are no incentives to take decisions; they are worried about their pensions and Comptroller and Auditor General (CAG) proceedings. There is no environment to take bold decisions. NHAI tends to be very cautious,” said a senior L&T executive, commenting on the overall bidding process for the roads sector.