Government might miss target of awarding road contracts

Despite its emphasis on infrastructure development, the government is expected to miss its target of awarding road contracts for the current year.

The primary reason for this delay is the reluctance of the infrastructure companies who are bidding for such government projects. It seems that with the introduction of Goods and Services Tax (GST), the infrastructure companies are taking time to bid for infra projects as they need more time to evaluate the actual costs and prepare detailed project reports.

The average length of road projects awarded in the last five years by NHAI was 2,860 km with 4,335 km awarded in FY 2016-17. Till January 2018, NHAI has bid outs 10,460 km costing around Rs. 1,75,000 crore. However, projects of 2,700 km costing Rs. 43,000 crore have been awarded. But, NHAI has planned to award 3,300 km in February and 5,000 km in March, 2018. This project awards are subject to a good response in bidding and cooperation from State Governments in land acquisition and project clearances.

The number of projects invited for bidding in the three months to June 2017 was significantly lower than the bid invited in January-March 2017.