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Graphically speaking
A Long Way To Go
After a rough phase of delays and stalled road projects, the road sector is seeing new tenders being awarded. But these are still early days
COMMENTS PRINT

It seems like the roads in the country haven’t been smooth for a while. Poor project planning, regulatory hurdles and indiscipline has led to a slump in road developing projects in the past few years. Orders awarded by the NHAI fell drastically from 6,381 km in FY12 to 1,100 km in FY13. However, the recently elected NDA Government has increased allocations — from Rs 39,900 crore in FY14 to Rs 85,600 crore for FY16 — for the roads sector, paving the way for some revival. This is also evident from the fact that the NHAI order awards marginally increased in FY15 to about 2,331 km. However, there are a number of hurdles that still need to be overcome for the roads sector to truly recover from the recent lull. Structural concerns such as low viability, dispute resolution and the financial health of developers remain a concern. A number of projects, especially those awarded under the BOT model, have been terminated or are stuck due to want of capital or clearances. Over FY07-10, nearly 60% of projects awarded remain stuck. Also, road developers have a huge amount of debt, causing a hindrance in committing to projects. Between FY08 and FY14, companies such as Gammon India, Lanco Infratech and Gayatri Projects have seen a sharp increase in debt. In other words, don’t expect a smooth ride ahead as weak players cede ground

COMMENTS PRINT
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