The ministry of road transport and highways exceeded its highway construction target for the fiscal year 2021 despite the pandemic-led disruptions and nationwide lockdown during the first quarter when construction activity came to a standstill. Around 13,000 km of highways were built in FY21 or 37 km per day. In comparison, the target for 2019-20 was 11,000 km.
How did the ministry manage to exceed the target amid covid-led lockdown?
The ministry initiated a slew of relief measures, which helped it exceed the target, including the shift from milestone-based billing (typically 45-75 days) to monthly billing and release of retention money or performance security in proportion to the work already executed. The initiatives helped in reducing the cash conversion cycle while also getting performance guarantees and associated margin monies released for the executed portion of the projects.
