We’d like to present some facts on the Scam Scarred Congress Government which continues to be greedy despite Policy Paralysis in every Ministry. We’ll have a look on one of the most important infrastructure – National Highways performance and how policy paralysis has affected the same.
The already awarded projects failing to make progress (80% of projects awarded during FY2012 await financial closure, 50% past contractual deadline) on the back of stringent conditions put forth by banks which are facing tremendous pressure due to defaults from these Road Contractors who have won projects by Virtue of Corruption in an Oligarchic Setup. They are also faced with execution issues led by land acquisition and environment clearance delays. Long list of projects at FC stage is impacting bidding interest (developer cap of 3 projects pending FC), reflecting in several projects not receiving enough bidding interest.
For the first time, NHAI has highlighted slower-than-expected pace of land acquisition (has earlier grown 4X over FY2009-12) as land owners await passage of the new land acquisition bill, hoping for better compensation (bill excludes NHAI from its ambit).
Realization of funding constraints at the highest level (Ministry of Finance) may also lead to some solution coming through. NHAI noted risk of developers reneging on their award contracts although believes it to be a distant possibility as negative repercussions are significant.