Even as the pandemic brought almost all economic activity to a halt, a ministry continued to move forward, building roads and highways and creating jobs at a time when India was financially vulnerable.
(Photo: Yasir Iqbal)
The Union Minister for Road Transport and Highways was a busy man during the pandemic. Nitin Gadkari worked with various state governments to ensure that road and highway construction continued without interruption. They released payments to vendors and companies on time. Analysts gave him full marks for keeping up with the pace of road and highway construction as the world and India grapple with the onslaught of the virus. Data from the ministry says that the speed of highway construction has increased from 12 km per day in 2014-15 to 37 km in 2021-22. The total length of National Highways increased from 91,287 km (in April 2014) to 141,000 km in December 2021.
In 2020, an ambitious national infrastructure pipeline was announced; This now includes 9,335 projects and an investment of Rs 108 lakh crore between 2019-20 and 2024-25. Gadkari is leading the road section of PUSH, which accounts for about 23 per cent of the pipeline. The ministry also has a huge asset monetization target of Rs 30,000 crore for 2022-23, of which Rs 17,000 crore has been clearly achieved so far.
One reason for the major reform, says Vinayak Chatterjee, chairman of the Confederation of Indian Industry’s (CII) national task force on infrastructure projects, is that there are now more stringent criteria for selecting contractors. “Previously, there were highway contractors who didn’t have the capacity,” he says.
cover story , challenges ahead
Gadkari has also broken the circle of contractors and fielded many regional players. Analysts say the latter has the potential to overshadow projects. The minister has built up the reputation of a doer, with the unparalleled ability to work with ministers of state across party lines. According to an analysis by Moody’s Investor Services, the hybrid annuity model, a variant of the public-private partnership model where the government bears 40 percent of the project cost, has also played a positive role in encouraging investment in the sector. This model was initially quite successful as NHAI awarded around 55 per cent of its projects through it in 2016-17. But it has since declined, with experts making a case for a change in the model.