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New roads half of target, fresh awards just a sevent

No Comments Sub Category:Realty News Posted On: Mar 04, 2014

Investments and waning investor interest, both award and construction of centrally-assisted roads including national highways has faced a big dropdown and due to this their targets have been lagged by a massive margin in 2013-2014.

As per the ministry of road transport and highways (MoRTH) information, at January-end this economical, building of these roads stood at just 56% of the full-year target at 4,460 km whilst latest project awards were a murky 14% of the target or 9,638 km.

Mutually the annual targets, officials admit, could be missed.

 

Roads construction meeting targets

Aptly, in last two years, building of these roads has exceeded the targets – 107% of the target was done in 2012-13 and 100% in 2011-12. And when it comes to new projects, the drop down became apparent in 2012-13 with rewards at just 15% of the goal of 12,449 km at 1916 km. These rewards were more secure at 83% of the target of 11,805 km at 9.794 km in 2011-12. As well as in 2010-11 these were evident 10,279 km against the reserved target of 3,500 km.

Inspite of  the spell of rewards in 2010-11 and 2011-12, building has seen a downfall in successive years due to plunge in toll receipts (for which rescheduling of premium payment has been urged), delays in land and forest clearances, funds crisis faced by infrastructure companies and lenders’ disinclination to amplify their publicity to the sector.

Both PPP projects and the conventional EPC contracts, NHAI and NHDP projects and the road projects for north-eastern state and those for areas affected by insurrection is included in MoRTH data.

Extensively, the facts on creation also comprise improvement (preservation, but not addition of new lanes) of active roads which in many cases forms a major lump

As per the statement by Vinayak Chatterjee, chairman of Feedback Infra “The current problems are liquidity constraints of infrastructure companies and bureaucratic hurdles. We do not seem to have a solution to these problems and so, it is tough to revive growth in the road sector,”

As the final government decision on the methodologies is still pending therefore the proposed recast of premium payments of more than 40 projects – entailing premia in excess of Rs 1 lakh crore – is also getting postponed

MoRTH is trying its best to rejuvenate investor interest with an easier exodus policy and liberal terms for premium deferment but the results of these labours are yet to be seen.

Source: The Financial Express

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