Despite challenges due to the outbreak of the novel coronavirus pandemic, the National Highways Authority of India (NHAI) has awarded the highest length of road projects during FY 2020-21 to date as compared to the projects awarded during the same period in the last three years.
According to an official Ministry of Road Transport & Highways release, in the period from April to August 2020, NHAI had awarded 26 projects of 744 km length as compared to 676 km in FY 2019-20, 368 km in FY-2018-19 and 504 km in FY 2017-18. The capital cost of these 26 projects is over Rs 310 billion, which includes the cost of civil construction, land acquisition and other pre-construction activities.
NHAI has set a target of awarding 4,500 km of highways during the current fiscal and is likely to exceed the same.
Despite the prevailing situation, NHAI has taken several initiatives to instil confidence in the bidders. To ease the liquidity crunch and ensure cash flow to the contractors, NHAI ensured that no payments are delayed due to closure of office and disbursed Rs 100 billion during the nationwide lockdown in March 2020 using digital platforms.
In 1Q of the current fiscal, NHAI disbursed more than Rs 150 billion to vendors. Additionally, steps such as monthly payments to the contractors have also been initiated. According to NHAI sources, such moderations have led to increased participation by bidders, resulting in a spiralling effect on the growth.