Why are projects getting delayed?
Delay in clearances, lack of liquidity, and land acquisition issues are holding up work
Awhite paper on the National Highways Authority of India (NHAI) identifies the main challenges faced by the body while executing highway projects across the country. Chief among them include delay in clearances – some as long as seven years, lack of liquidity and issues pertaining to land acquisition.
Pressure was brought to bear on NHAI to award projects even when land was not acquired to the required extent, environment and forest clearances were not in place, and other clearances were under process etc.
“Awards became a numbers game. Lesser attention was given to working out a strategy to enable timely completion of projects,” says the white paper released in June this year.
When project execution suffered continuous slippages, stress on the sector became very high. NHAI had to go into fire-fighting mode, struggling in a losing battle.
Developers lost opportunities and suffered under-utilisation of deployed resources, lenders had to cope with defaults in debt servicing, requests for debt restructuring, non-performing assets etc, the public could not avail the benefits of completed roads and the government itself lost enormous revenue which it could have received had the projects been completed on time and stakeholders received their just dues.
Ministries whose contribution was integral to the timely completion of projects went about their task unmindful and unconcerned with the crisis they were creating due to delayed clearances/sanctions, secure since the system demanded no accountability from them.
Department of Financial Service (DoFS), MoF (ministry of finance) took a contradictory stance against a wing of the MoEF (ministry of environment and forests). While the MCA (model concession agreement) approved by DoE (department of expenditure) only requires that 80% land be made available on the appointed date, DoFS directed all state-owned banks that they shall not lend to road projects unless 100% land is available, the white paper states.
No project had 100% land and bank lending to road projects was not given. Even though DoFS changed its stand later, the delay killed the viability of many infrastructure projects and many among these had to be foreclosed/terminated by NHAI.
The ministry of railways has also been extremely tardy when it comes to ROB/RUB (rail over bridges and under bridges) clearances, adds the white paper.
— Vandana Ramnani