Faster land acquisitions, environment clearances and timely funding will be crucial for the completion of Bharatmala project by 2021-22 fiscal, India Ratings said on Monday.
Under Bharatmala project, over 83,000 km of national highways will be constructed at an estimated investment of Rs 7 lakh crore. The deadline set for the project is March 2022.
According to the rating agency, the government’s announcement of ‘Bharatmala Pariyojana’ is ambitious given the expected private participation through public private partnership (PPP) of about Rs 1.06 trillion.
It however said private participation could be challenging due to the continued stretched balance sheets of many infrastructure developers.
“The implementation of Bharatmala would depend on fast tracking of land acquisitions, clearances from the ministry of environment, forest and climate change and other clearances. Timely redressal of dispute by establishing a regulator is also crucial before undertaking such a large scale project because of possible arbitration issues,” Ind-Ra said.
It said as per the National Highways Authority of India’s data, the government constructed NHs of 8,231 km in 2016-17 against the set target of 15,000 km at 22.55km/day.
However, the pace of construction picked up to 25.21 km/day during in first quarter of 2017-18.
Ind-Ra said a slew of measures such as enhancement of approval limit of projects by NHAI to Rs 20 billion from Rs 10 billion, increase in compensation rates to farmers under the new land acquisition policy and digitalisation of land acquisitions would expedite projects under Bharatmala.
“Since most of the projects are to be constructed in remote areas, Ind-Ra believes mobilisation of equipment and raw materials would be challenging,” it said.