Business Today

"Big Challenge is to Ensure Construction Starts at the Earliest"

There is a perception that government expenditure over the next few months will be focused more on healthcare and disaster management, leading to lower spends on key infrastructure projects, including highways
Nirbhay Kumar | Print Edition: May 17, 2020
Nitin Gadkari, Union Minister for Road Transport and Highways

Nitin Gadkari, Union Minister for Road Transport and Highways, spoke to Business Today's Nirbhay Kumar on how the government plans to restart key projects. Edited excerpts:

Over the past five years, road building has picked up pace. How would government ensure the growth momentum continues despite the challenges posed by the coronavirus pandemic?

The government focus on developing a robust infrastructure has been paying dividends. In 2014, the highways sector was in a bad shape with construction falling to 4 km per day in the last quarter of the fiscal. Huge NPAs were staring at concessionaires, there was delay in land acquisition, and various statutory approvals had multiplied problems. However, after removing bottlenecks, fast-tracking decision making, and introducing innovative models like Hybrid Annuity Model, confidence of contactors and concessionaires has been boosted. The pace of construction has risen to 30 km per day.

The National Highways sector is not isolated from the challenges posed by the global coronavirus pandemic. Right now the big challenge is to ensure construction starts at the earliest. I have spoken to our stakeholders and they have made adequate arrangements to face this challenge. Workers at sites have been provided necessary health and hygiene protection and food. I am confident that within a short span of time we may be able to overcome this crisis.

There are apprehensions that government may shift its focus to health and disaster management in the short term, and the highway programme could suffer. Is that likely?

While I agree partially that the government will have to focus on health infrastructure and disaster management, that doesn't mean doing so will impact the highways programme. In fact, highways are the lifeline of communication and connectivity in most parts of India and disaster management requires good infrastructure and connectivity; so both are important. In the north-east, we need to build good infrastructure to deal with disaster and medical emergency. The National Highways Authority of India (NHAI) has developed innovative models to raise finances. LIC and State Bank of India have offered large long-term loans to NHAI. The first bundle of TOT (toll-operate-transfer) has been a great success. We are looking at securitising our completed public funded or EPC (engineering, procurement, and construction) projects.

I believe there are people who convert opportunities into problems and others who convert problems into opportunities. We have accepted this challenge as an opportunity.

Bank support, timely release of funds to private developers would be key to bidding for new projects. What steps would you take to ensure that projects are not held up for want of funds?

Timely availability of funds is key to completing projects on time. I have already directed NHAI, NHIDCL and MoRTH through the state PWD to release any legitimate dues that may be pending against any ongoing project. We have developed a legitimate conciliation mechanism of retired judges to resolve any contract disputes or claims. I have advised NHAI to expedite this so that liquidity is available with concessionaires. I, along with the finance minister, had a detailed meeting with bank chiefs just before the lockdown; they gave the assurance that banks will continue to support the infrastructure sector, and highways in particular.

Will bidding for new projects be affected as banks and developers go for reassessment of risks and projections in view of the pandemic?

I have asked NHAI and MoRTH to complete approvals and desk work during the lockdown. As soon as it's over, we will be able to start bidding of projects. We already have bids under evaluation for more than 1,300 km, which can be awarded immediately. Another 1,500 km is ready for bidding. For banks also, highways sector offers great deal of opportunity, so I am very much confident that they will support us.

Do you see NHAI's asset monetisation program-me getting hit by the pandemic and its impact on the economy?

Asset monetisation is one of the instruments to raise funds and I am sure it will do well. But we will continue to explore all other possibilities like long-term loans, securitisation, bonds, etc. We may also have to think about some new and innovative ways of financing. We have done it earlier, and I am sure we will do it in future as well.

What is the governments assessment of the coronavirus impact on the highways sector?

The pandemic has thrown challenges to almost all sectors, including highways. Construction work at all places has stopped. It has an immediate impact on workers and labour, though we had advised highway developers to ensure adequate food, healthcare and stay facilities for them. It will impact the pace of construction. It is difficult to quantify at this juncture, but we will do so in due course of time.

Given that several highway projects are of national significance, should they not be identified and construction allowed, following standard social distancing norms?

Yes, many projects are of national importance and immediate start of work on these is very important. We also understand the intensity of this pandemic. The government has no other option but to go for complete lockdown.

Last week, I had reviewed these issues with highway sector officers . We are working on a business continuity plan. Wherever we can, we will open construction work in identified zones with permission of local administration. However, we are only looking at allowing the work to start in areas where standard social distancing norms can be followed and highest standards of hygiene and safety are adhered to.

As PM Narendra Modi said, jaan hai to jahaan hai, we want to start work immediately but without compromising the need to contain the spread of the coronavirus.


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