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Road ministry likely to miss daily construction target this year too

According to an analyst with whom DNA Money spoke, this drop in numbers during these two months is due to the implementation of goods and services tax

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Road ministry likely to miss daily construction target this year too
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Ministry of Road Transport & Highways (MoRTH) is unlikely to achieve its 41-kilometre-per-day highway construction target once again as the average has been around 23 km per day in the first five months of this financial year.

In March this year, DNA Money had reported that construction target for last fiscal, also at 41-km-per-day, was unlikely to be attained and that the pace for FY2018 would be in the range of 25-30 km a day.

The average highway construction in the last fiscal stood at around 22.50 km daily.

As per MoRTH data for the June quarter of the ongoing fiscal, the construction pace rose to 25.21 km a day, but it dipped to 20.80 km per day during the first two months of the September quarter.

According to an analyst with whom DNA Money spoke, this drop in numbers during these two months is due to the implementation of goods and services tax, when businesses too witnessed slowdown to understand the new indirect taxation law.

"In the last six months, they certainly have fallen short of the target announced. Even if they focus on gaining more ground during the second half of this year, still they might fall short of reaching 41 km daily," said Vikash Sharda, director, Capital Projects & Infrastructure at PwC.

Officials will have to ensure that construction pace is one-and-a-half times the target so that by the end of the fiscal, they manage to touch above 40 km daily construction. In other words, the target can be achieved only if daily construction average surpasses 60 km, which is unlikely.

However, according to Minister for Road Transport and Highways Nitin Gadkari, the ministry has achieved an average of 28 km per day, PTI reported last week.

Earlier this year, in a review meeting of National Highways Authority of India (NHAI) projects in April, Gadkari had said, "Work needs to be done at a much faster pace to award more projects and construct those that have been awarded."

Besides, he had also instituted an award for best performing project director and regional officer. But even these measures seem to have been ineffective in achieving the goal.

During the last fiscal, 16,271 km of national highways were awarded, but just 8,231 km was completed. Construction of the projects that were awarded last year has commenced, while the ones awarded during this year will take a few more months before the ground work starts.

For the ongoing financial year, NHAI targets to award contracts for 6,502.74 km of national highways as compared to the overall target of MoRTH at 25,000 km.

India has 1,15,435 km national highways, with Maharashtra having the largest network of around 15,500 km. While about 65% of freight and 80% passenger traffic is the country is carried by the roads, national highways constitute only about 1.7% of the road network and carry about 40% of the total traffic. On the other hand, the number of vehicles has been growing at an average pace of 10.16% per annum over the last five years.

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