Proactive steps led to reduction in stalled road projects: Economic Survey

As many as 117 highways out of 482 stalled projects faced cost and time overruns, but proactive steps have reduced the number of those projects to three, the Economic Survey said today.

There were 482 projects under the road ministry with a cost of Rs 3.17 lakh crore, and 43 projects out of these faced cost overruns and 74 projects were facing time overruns, the Economic Survey tabled in Parliament by Finance Minister Arun Jaitley said.

"With proactive policy interventions, around 88 per cent of these projects have now been put back on track, or appropriately re-engineered and restructured and the total number of stalled projects have been reduced to three," the survey said.

It said some of the projects under different phases of National Highway Development Programme were delayed mainly due to problems in land acquisition, utility shifting, poor performance of contractors, environment clearances, Road Over Bridge & Road Under Bridge issue with Railways, public agitations for additional facilities, and arbitration/ contractual disputes with contractors, among others.

It also said: "The share of Non-Performing Assets (NPAs) out of total advances in road sector increased from 1.9 per cent in 2012-13 to 20.3 per cent in September 2017-18".

During 2012-13, total credit advances to road sector was Rs 1,27,430 crore, which increased to Rs 1,80,277 crore as in September 2017-18.

The survey said the Ministry of Road Transport & Highways and National Highway Authority of India (NHAI) have been monitoring the stalled projects.

"Wherever physical completion is established, one-time fund infusion by NHAI is being done to revive stalled projects. The funds are being arranged through the common fund available with NHAI for development of roads," it said.

The survey also said that in order to expedite completion of delayed projects, regular meetings are held with project developers, state governments and contractors.

Various steps have been taken for streamlining of land acquisition & environment clearances, exit for equity investors, premium re-schedulement, revamping of dispute resolution mechanism, frequent reviews at various levels etc, it said.

"In order to facilitate implementation of the projects, Hybrid Annuity Model (HAM) instead to Engineering, Procurement and Construction (EPC) has been adopted," the survey said.

HAM is a combination of two models -- the EPC model and BOT - (Build, Operate, Transfer) annuity model. Under the EPC model, the private players construct the road and have no role in the road's ownership, toll collection or maintenance. NHAI pays private players for the construction of the road and the government, with full ownership of the road, takes care of toll collection and maintenance of the road.

The survey said apart from HAM, "initiatives such as monetisation of projects through the toll-operate-transfer (TOT) model, securitisation of toll revenue, adopting the Infrastructure Investment Trusts route, other innovative financing options, including LIC, long term pension funds etc, have been taken to attract fresh capital from the market on the strength of already operational projects."