Ministry of Finance chooses to treat highway projects as single entity
Such an appraisal method is likely to impact the award of around 1,000 km highway projects
The Union Ministry of Finance has decided to treat highway projects as a single entity that cannot be divided into small packages. The decision is likely to impact award around 1,000 km of key infrastructure projects, including the Delhi-Mumbai and Ahmedabad-Dholera Expressways.
As a norm, any public-private infrastructure project (PPP) costing over Rs 2,000 crore is sent to the PPP Appraisal Committee (PPPAC) and then to the Union Cabinet for its nod. However, PPP projects up to Rs 2,000 crore are appraised and approved by the Ministry of Road, Transport and Highways (MoRTH) Standing Finance Committee (SFC).
To keep large projects under the Ministry of Finance-set threshold, MoRTH has been splitting big-ticket projects. The National Highways Authority of India (NHAI) will now have to take big-ticket projects to PPPAC which is likely to stretch the timeline of the project.
Such an appraisal method is likely to impact the award of around 1,000 km highway projects which will be delayed in FY20. These projects are being awarded under the Bharatmala Pariyojana programme, and a number of key projects will be delayed as it cannot be appraised internally any more.
NHAI has awarded over 2,000 km highway projects in FY20, against a target of 4,000 km. If this continues, subsequently, project award will be impacted in FY22. MoRTH recently unveiled Rs 3.10 lakh crore plan to build 22 greenfield expressways to decongest major cities.
Of the 7,500 km new roads, NHAI plans to build six expressways of 2,250 km entailing an investment of Rs 1.45 lakh crore, while another 16 greenfield corridors with a length of 5,250 km will require an investment of Rs. 1.65 lakh crore. Among other corridors, Ahmedabad-Dholera, Delhi-Amritsar-Katra, Chennai-Bengaluru, Kanpur-Lucknow, Bengaluru Ring Road, Amritsar-Bhatinda-Jamnagar, Hyderabad-Raipur, and Nagpur-Vijayawada have been proposed.