BK Chaturvedi, Member of the Planning Commission of India and architect of the concession agreement for BOT in roads
Hindsight: The roads sector had planned for a highly ambitious growth rate. Earlier we were doing around 2,500-3,000 km every year. We then stepped up and said we would do 8,000 km-the confidence stemming from the fact that we were able to achieve as much as 7,800 km. In the last year or so, there hasn´t been much of a response in the market, partly because the economy had slowed down, and partly because there were some problems involving major players.
The problems have been on several counts. First, several of them had a wide canvas of activity, from roads to power, and were bidding for everything. And then several of them bid too aggressively, and players realised they could not cope with the market. Secondly, there were difficulties in land acquisition and environmental clearances. Because of the slowdown in the BOT mode, we thought of bringing more roads under EPC, and that has really worked because it has seen a better response though the work started really late, in August-September.
Additionally, meanwhile, the government took decisions on land acquisitions and environmental clearances. The CCI and the committee in the Cabinet Secretariat they had been there in the process and identified what are the issues moving along and that really helped. I believe [the roads sector] is gradually getting back into the groove.
Forward look: Nevertheless, we have planned for a growth of about 5,000-odd km this year. We had actually built around 1,500 of that length within the first six months. We hope that by the time we are able to finish the year, we will be able to award the remaining. Construction is going very well, and this year´s constructed length is higher than last year-more than 3,000 km-a result of last year´s awards. The award is the main problem, and they reflect the true position in the market and its response. So we have evolved a strategy and hope to move forward accordingly.
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