Government to set road construction target around 4,000km for 2018-19
Deepak Kumar, Chairman, NHAI
Apr 06, 2018 | Source: CNBC-TV18
Target for FY19: The ministry will be fixing the target but we are hoping that it will be around 8,000km.
This year, it will be a changed scenario. Last year, the Bharatmala project was announced in October, was approved by the government in October, and in November under Bharatmala, we had given some delegation to power.
So, we started our tendering only in November and we have to give 45 day time for tendering and processing; almost all the tenders started being finalized in second fortnight of February and then March. However, this year, we hope to achieve not less than 4,000km in the first three months.
Construction for FY18 and what would you target for FY19? Total target for construction was 3,500km; I am talking about complete road length. When you break up into lane km, it will be much, much higher than that. We will be achieving that target of around 3,500km this year. In the next year, the ministry will be fixing a target and it will be around 4,000km or more than that.
Next set of toll-operate-transfer (TOT) projects: The first tranche was already bid out. The second tranche we hope to achieve in April-end and it will be of the same size, or almost the same size, the same amount, and the same number of roads except that it will be geographically located in some other states. We are targeting the eastern side—West Bengal, Odisha etc and hence the only difference will be of geographical location; otherwise, the size will be almost the same On target spend of Rs 90,000 cr for FY18 and plan for FY19 : The target set was Rs90,000 crore. We do not have the figure of March but till February-end it was Rs71,000, much more than what we had spent last year.
Till February, it will be Rs 38,000 crore. We had spent around Rs71,000 crore by the end of February. We hope Rs 90,000 crore will be achieved in March but I do not have the exact figure right now. In next year, we are targeting around Rs120,000 crore (Rs1.2 trillion); it is a quantum jump from what we had achieved this year, and we are doubly sure that we will achieve that expenditure because by seeing the pace of awarding and seeing the pace of the work being started this financial year, we will achieve that.
NHAI initial public offering (IPO) : I do not have any information as of now but I want to say one thing that the pace of awarding and the pace of construction has shown that in the financial market, there is an appetite for highway sector.
I will just corroborate the facts that in this awarding of 7,400km, around 3,400km have been awarded on HAM and in HAM, the initial funding comes from the private sector.
So, approximately 3,400km cost is around Rs76,000 crore and out of that, we expect Rs50,000 crore will come from the first stance of private sector. This is the commitment that we are getting from the bidders, that we will be getting Rs50,000 crore from the private sector by financial closure from the banks.
In the HAM bidding, we had got very competitive bids, and majority of the bids have gone below our bid price. Therefore, this also shows that there is intense competition in the financial sector for achieving those tenders and this is a positive sign for us beside TOT.
Any constraint at all on the finance space? At least in highway sector we are not seeing, maybe it’s a surprising thing for us also but we are not seeing as of now.