Rise in land cost may hit highway schemes

NEW DELHI: Highways ministry may have to cut down road construction target by 28% under its ambitious Bharatmala and NH development programme, if it does not get additional Rs 3.15 lakh crore funding till 2024-25, according to an official estimate.

Officials said the ministry requires additional funds primarily because of nearly three-fold increase in cost of land acquisition as compared to what the government had estimated in October 2017 when the Cabinet had approved the plan to develop 35,000 km of NHs with estimated investment of Rs 5.35 lakh crore. Moreover, there has been 30% increase in civil construction cost. These two factors have made highway projects almost 64% more expensive.

TOI has learnt that in case the ministry does not get the required funds, it would be able to build only 25,000 km of NHs under the ambitious Bharatmala Pariyojna and the NH development programme. Officials said the problem has become bigger as private investment has dried up in the recent years.


Sources said majority of the projects appraised so far by the NHAI Board, an inter-departmental entity with representatives from the finance ministry and Niti Aayog, are fully government-funded ones and only two out of the 225 projects (9,163 km) will be implemented under build, operate and transfer (BOT) mode. “Getting private investment still remains a challenge. But now we have decided to push more projects on BOT,” said an NHAI official.

Highways minister Nitin Gadkari said NHAI will try to tap funds from National Investment and Infrastructure Fund, the government’s first sovereign wealth fund, foreign funds and by auctioning the already completed projects. He is learnt to have told officials to continue the process of finding funds rather than waiting for a crisis-like situation