Bharatmala will significantly boost highway infrastructure.

- D. K. Sen

Whole-time Director and Senior Executive Vice President, (Development Projects), Larsen & Toubro

How is Bharatmala Pariyojana project helping further growth of the roads & highways and the overall development of the country?

Bharatmala Pariyojana is an ambitious umbrella programme by the Government of India to develop road connectivity to border areas, development of coastal roads including road connectivity to ports, new economic corridors, inter-corridors and feeder routes. It also involves development of existing national corridors and highways. The programme also envisages development of ring roads, bypasses and elevated corridors to decongest the traffic passing through cities and to enhance logistics efficiency.

This program will be implemented in two phases: in Phase 1 approximately 35,000 km of highways will be developed and in Phase II approximately 8,000 km of multimodal logistic corridors.

Overall, this programme will significantly boost highway infrastructure. It will raise six NC corridors to 50 corridors (6 NC and 44 EC). It will also raise 40% freight to 80% freight on national highways and 300 districts to 550 districts connected by minimum 4-lane highways which will enhance logistics efficiency and reduce logistics costs of freight movements which will give long-term benefit to the citizens of this country.

The speed of highway construction is a challenge when compared with the target set in highway construction. What is the way forward?

There is an exponential increase in per day construction of the highways from 2014. The construction speed has grown from 12 km/day to 37 km/day from FY15 to FY 21. Even in initial phase of COVID 19 pandemic, industry was able to achieve per day construction of 37Km/day which was record level and this was made possible by liquidity boosting measures such as shifting from milestone-based billing (45-75 days) to monthly billing and other measures like release of retention money, performance security in proportion to the work already executed etc.

The government aimed to achieve the target of 40 km/day in FY 22, however due to two Covid waves and prolonged monsoon, the target could not be achieved (achieved 27km/day). To ramp up the construction pace further, the government has introduced Gati Shakti plan which will break departmental silos and bring in more holistic and integrated planning and execution of the project bringing down time and cost overruns, to achieve targeted pace of road construction.

What opportunities do you visualize in the highway construction under Bharatmala in the coming years?

In case of Phase 1 of Bharatmala Pariyojana, out of 34,800 km highway construction plan, around 27,000 km has been already awarded till date and the balance will be awarded in the next couple of years. Also, approximately 8,000 km highway development has been planned in the Phase 2 of the Bharatmala Pariyojana which includes around 3,500 km expressways, 3,000 km of economic corridors and 1,500 km of inter-corridor routes which will give ample opportunities to construction companies to grow.

How do you look at the progress of highway construction under Bharatmala scheme?

The country has seen commendable growth in highway construction under Bharatmala Pariyojana. In FY15, per day construction pace was 12 km which has progressively went up to 37 km/day in FY21. However, in terms of overall progress of Bharatmala Scheme as on date, only 60% projects have been awarded while 21% stand completed. As per information available, the completion date of Bharatmala Pariyojana is now expected in 2027 against the initial target of March 2022. This is leading to cost increase to Rs 10.63 trillion from the initial estimate of Rs 5.35 trillion due to delays in implementation and abnormal price escalations, apart from impact of poor quality and delay in execution of awarded projects.

However, the government has continued to show its dogged determination towards an infrastructure-led growth-oriented economy, setting a huge target of 25,000 km highway construction at close to 70 km/day in FY23, which will be a remarkable feat for both the government and the nation, if achieved.

How do you compare the HAM and EPC as a preferred execution model in Bharatmala projects?

Both the models have its pros and cons. HAM was launched at a time when the project awards largely relied on the EPC mode and the private sector's interest had almost dried up in BOT-based projects. Barring FY20 when HAM was 25% (EPC 75%), EPC and HAM continued to take a major share of 45-50% each since FY19 with BOT less than 5% of the pie. Increase in HAM participation grew after amendments in the earlier MCA, de-risking the concession to private players.

Due to dilution in PQ criteria in the recent years, EPC mode became very competitive with increased number of bidders i.e., 25-30 bidders offering 30-35% discounts on DPR estimates while in HAM, even after increase in participants to 10-15 from 5-7 earlier, bidders are quoting at par or above DPR estimates due to other risks associated with HAM.

As far as execution is concerned, in EPC, all risks i.e. construction (partial), O&M, toll, financing are of authority whereas in HAM authority bears the entire toll risks and promoter bears construction and O&M risks.

Which are your projects (completed, ongoing, in pipeline) under Bharatmala scheme?

Currently L&T is executing five road projects under Bharatmala Pariyojana which includes 19 km long Elevated Corridors of Rs 2,400 crore value (2 packages) and 62 km long 8-lane expressways of Rs 3,900 crore  value  (3 packages). All of these are in advanced stages of completion.

What are your views on successful implementation of Bharatmala project?

Bharatmala Pariyojana overall is going to be a success story for most part to the government and the nation, significantly changing the landscape of road infrastructure of the country. Completion of Bharatmala will also be a vital aspect for the government to move closer to meeting the  NIP targets.

This Pariyojana will boost the economy of the nation, bridging the infrastructure gap, connectivity and reach to make the movement of the materials more structured, while  also generating large employment (both direct and indirect).

The government's focus on industry-oriented policy reforms to de-risk contracts and tightening bidding criteria by implementation of quality-oriented procurement across all projects will aid and necessitate successful implementation of the Bharatmala scheme on fast-track mode.

Award of projects under Bharatmala is happening at a reasonable pace. However, success of this Pariyojana depends upon availability of clearances, good quality of work and timely execution.

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