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Gadkari to miss ambitious highway target for 2016-17

Nitin Gadkari, who is slowly building up a reputation as a pragmatic and capable minister, is likely to face major disappointment in the ongoing financial year as his ministry is unlikely to meet the steep road construction target it set for itself.

Unlike the term of the previous government, when an average of 5,000 km of national highways used to be built per year, Gadkari had announced a grand plan to treble it to 15,000 km in the ongoing year, which ends this month.

However, with only one month remaining, the achievement is only 44% of target: Only 6,604 km of national highways have been built in the first eleven months of the ongoing year.

Just to meet even 50% of the target, road makers will have to construct another 900 km of highways in March compared to the average of 600 km per month so far.

The setback comes as a rude shock to the ministry, which had been emboldened to set a target of adding 41 km of national highways per day in the current year even though last year, it was able to add only 16 km per day.

During the UPA years, the rate of highway construction was about 13.7 km per day (see chart).

Out of the 15,000 km, 7,000 was supposed to be constructed directly by the road transport ministry, while 8,000 km was supposed to have been contracted out to private developers via the National Highways Authority of India.

In order to achieve the target, Gadkari said in April that he planned on awarding 25,000 km of road construction work in the current year, compared to 10,000 km awarded in the previous year (out of which 6,029 km was completed.)

It is not clear which segment — in-house construction or contractors — are responsible for the target miss.

“The slow speed of construction of National Highways are mainly due to land acquisition, utility shifting, non-availability of soil and aggregates, poor performance of contractors, environment, forest and wildlife clearance, rail overbridge and rail underbridge issue with railways, public agitation for additional facilities, arbitration and contractual disputes with contractors etc,” the ministry said.

Despite the miss, the current rate of road construction is about 45% faster than it was during the UPA years.

The average cost of constructing 1 km of national highway in India is Rs 2 cr (Rs 20 mln).

Practically all of this money comes in the form of a cess on petrol and diesel.

To construct the 15,000 km of highways, the budget for the ongoing year had set apart Rs 30,209 cr from the cess proceeds.

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