India’s National Highway Development Programme (NHDP) has picked up pace in implementation in the past two fiscals. Post the new government taking over, 1) awarding of contracts has more than doubled; 2) physical completion of projects has gone up by more than 40%; 3) NHAI is also
undertaking feasibility studies for 10,000 kms, four times the average of last three years; 4) NHAI has ambitious plans of awarding ~12,000kms in FY11, about four times more than that awarded last year.
In the earlier phases, NHAI funded the projects through its own sources; primarily giving contracts on cash-contracting basis. This has changed
dramatically: all of Phase V will be through the BOT route. We expect this trend to continue. This makes the road programme more leveraged to the global equity/credit markets.
There has been an uptick in the award and implementation of projects in FY10; post the change in the government. The government has set itself a huge target of ~12,000kms to be awarded in FY11; 4x that awarded in FY10. A large part of GQ is completed; whereas significant proportion of Phase III and Phase V remain to be awarded.
The funding pattern for the programme has changed dramatically – i.e. incrementally almost all projects are through the BOT route. This makes the road development programme a function of global equity/credit markets. In 2008; the global financial crunch led to a fall in the private sector participation in the bids.
Foreign participation (on its own/ in a JV with an Indian co) was fairly high in the initial phases, then dipped a bit in NSEW corridors before picking up again in Phase V
~12,000Kms to be awarded in FY11; 4x projects awarded in FY10- The government has set itself a target of constructing 20kms of road every day after the last General Election. NHAI intends to award 12,000Kms of road contracts in FY11 (vs.~3,166Km awarded in FY10), of which ~3,500 Km will be awarded in 1QFY11).
