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• Dampeners like policy paralysis, difficulty in environment clearance, and achieving financial closure had impacted execution of projects and yet the government has increased its target for road completion

• Finance minister Pranab Mukherjee has said that the government will give contracts for 8,800km of national highways in FY2012-13. However, in last fiscal the National Highway Development Project (NHDP) completed just 1,250km after awarding projects for a total length of 4,374.9km worth over Rs40,890 crore. The target for FY11-12 was 7,300 km.

• In short, the government fell short by 83% in its target achievement and yet the finance minister has increased the target way to high at 8,800 km for FY12-13. The target for next financial year is a jump of 604% compared with the actual projects completed in FY11-12.

• Recent sentiment dampeners like policy paralysis, difficulty in environment clearance and achieving financial closure had impacted execution of projects. With the current run rate the National Highway Authority of India (NHAI) is likely to complete FY11-12 with 5.8km per day of execution compared with 4.9km per day last year. 

• Over the years, the government and the NHAI has been saying that the Authority would complete 20km of roads per day. To achieve 20km per day of target requires about 22,000km of work in progress, which currently stands at 13,258km. Therefore, it would be an uphill task to achieve 20km per day target.

• "Considering the awarded projects, current bid stage and execution; we believe the NHAI will miss both its target of awarding and completion. Though we have witnessed very competitive bidding throughout the last year, we believe competition would ease going forward, as already developers are facing challenges regarding financial closures and our channel check suggest around 40 projects are on the block," said Infinity.com Financial Securities in a research report.

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