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NHAI Confident of Meeting FY12 Target of 7300km

  • The National Highways Authority of India (NHAI) has awarded 42 projects of 5,457kms in FY12 so far and is all set to award a few more in the last week of March 2012."We have about 1,600 kms bid on the anvil on March 29-30 and that would take us above 7,000 kms. The Ministry of Road Transport and Highway also has some NHDP projects of about 200 kms, "AK Upadhyay, chairman of NHAI told CNBC-TV18.Given this, NHAI is confident of being able to touch the target of 7,300km for FY12.

  • Out of these 42 projects, NHAI has awarded 27 projects on premium. Upadhyay doesn't see reduction in competitive intensity for road projects and expects this positive trend to continue.

  • Q: The Budget had a kind word to say about the number of road kilometers (kms) that are planned to be awarded in this year itself, 7300 km, could you award all of it? What is left behind and what do you think you will be able to manage in FY13?

  • A: Talking about FY12, as of now we have awarded 42 projects of 5,457 km. We have about 1,600 kms bid on the anvil on March 29-30 and that would take NHAI above 7,000 kms. The Ministry of Road Transport and Highway also has some NHDP projects of about 200 kms, so we are going to touch the target of 7,300 km of NHDP.

  • Q: For the coming year you think you will be able to manage that 8,400 kms that the Budget has laid out as a target?

  • A: It should be possible. That target is for the NHAI and the ministry combined together. Besides NHAI, the ministry also through the state government PWDs and state road development corporations bids out some road projects under NHDP. So this 8,800 kms should be doable.

  • Q: There are some reports about how bidding has been and that the competitive intensity has reduced quite significantly from the heydays in terms of participation. Give us a sense of how exactly participation and biding has been with regards to companies?

  • A: Out of 42 projects which we have bid out this year, 27 have gone on premium. A bid came yesterday for Solapur-Bijapur road project of 110 kms, it is most resent and we are awarding it today.

  • In that, there were 16 bidders, 13 offered premium and the highest premium offered was around Rs 76 crore against expected grant of 7%. I presume that the positive trends will continue and remaining bids, which are going to come in March end for that also the same trend continues. I hope same positive sentiment continues for road sector.

  • Q: The Solapur project that you are referring to was on a BOT basis?

  • A: Yes, it is a BOT toll basis project.

  • Q: We were given to understand that many projects awarded by the NHAI on a BOT basis gets stuck on arbitration because of problems of land acquisition. Is there any way to plug this loophole or are you therefore going to EPC basis where you do the land acquisition and therefore the delays are not there?

  • A: Let me clarify whether it is EPC or BOT toll basis the land acquisition responsibility in terms of responsibility as well as for paying the cost of land acquisition that belongs to the NHAI or the government. So, the mood of deliver doesn't make any changes in terms of who is responsible for land acquisitions.

  • To address this issue what we are trying to do is that we are trying to do land acquisition in advance. We trying to bid out those projects where the land is available of at least 80%. When we come to EPC projects they will be essentially two lane projects where not much land is required.

  • I don't see much problem in the land acquisition because land acquisition is more in four or six lane projects. As we come along to EPC projects of two laning, I don't think there is much need for land acquisition.

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