Highway project to cost 18% more

The government is expected to spend at least 18 percent more than the estimated cost of Rs 30,300 crore (Rs 303 billion) for widening the highways under the Golden Quadrilateral project.

As per the revised cost estimates prepared by the National Highway Authority of India show that the 5,800-km project is now expected to cost Rs 35,000 crore (Rs 350 billion) by the time it is completed in June 2006.

The highway upgrade, part of the first phase of the National Highway Development Programme, was originally scheduled to be completed by April 2005. The deadline was extended to December 2005.

However, road transport and highways department officials said only a part of the cost escalation was due to delays. They pointed out that in 2000, the project was approved without factoring in the interest during construction, estimated at around Rs 5,000 crore (Rs 50 billion).

If inflation and the resultant increase in the cost of inputs were included, cost escalation could add up to 18-20 per cent, they said. Officials, however, said the NHAI would manage to complete the project within the Rs 32,000-crore (Rs 320 billion) budget instead of the revised cost estimate of Rs 35,000 crore.

Till September-end this year, work on 85 per cent or 5,000 km has been completed. The biggest delay was on the Delhi-Kolkata stretch, partly because of delay in land acquisition in Bihar, and partly because the NHAI had to award the contract for the Allahabad bypass for the second time following cancellation of the first contract. Land acquisition was also cited as a reason for delay in Tamil Nadu, Orissa and Maharashtra.

Now, the progress on the remaining stretches is ahead of the revised targets fixed by the prime minister's committee on infrastructure, officials said. Since June 2005, the NHAI has completed the construction of 410 km, compared with the 402-km target.

Expenditure on construction was estimated at Rs 2,016 crore (Rs 20.16 billion), against the Rs 2,000-crore (Rs 20 billion) target. Under the second phase of NHDP, for which NHAI has started awarding contracts, no construction targets have been fixed so far. Between June-September this year, NHAI awarded contracts for 2,993 km for widening the North-South and East-West corridors, against the target of 2,956 km.

On account of the delay in finalising the model concession agreement, NHAI slipped on the targets for awarding build-operate-transfer contracts for connecting state capitals and cities of religious and economic importance with the national highways.

Contracts were awarded for 475 km -- 17.5 per cent lower than the targeted 576 km.

As construction is at initial stages for phase-II and IIIA, the expenditure has been below targets. For the North-South and East-West corridor, expenditure on construction at Rs 329 crore (Rs 3.29 billion) was 17.8 per cent less than the target of Rs 400 crore (Rs 4 billion). The Rs 6 crore (Rs 60 million) spent on phase-IIIA was 70 per cent lower than the target.