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NHAI to carry out risk assessment before awarding projects

NHAI to carry out risk assessment before awarding projects

(This story originally appeared in on Oct 29, 2015)

NEW DELHI: National Highways Authority of India (NHAI) has decided to carry out detailed risk assessment of each stretch for which the tenders would be floated. Government has set up a target to push the award of highway projects to 12,000 km annually for the next four to five years from 8000 km at present, entailing at least Rs 5 lakh crore investment.

“We will have detailed assessment of the risks in all projects to resolve the issues before rolling them out,” NHAI chairman Raghav Chandra said. Such a move will help avoid any delay in the project take-off and costoverrun. Sources said the risks could include problems regarding land acquisition and possible litigation with people asking for change in alignment of highways.

Learning from the past, the government is not awarding any highway project until it has over 80% of required land and necessary clearances in possession. Moreover, most of the projects are on government-funding mode known as

EPC

(engineering procurement and construction) and so contractors don’t face financial problem to implement projects.

“Last year we awarded 8,000 km of which 7,300 km was on EPC. This year we will reach 10,000 km target and of this 7,000 km will be on EPC mode. Next year we will scale it up to 12,000 km.The higher rate of award will translate into completion of more stretches in the successive years,” road secretary Vijay Chhibber said.

He added while EPC (engineering procurement and construction) would remain the main mode of delivery of road projects for the next couple of years, private investment will revive. “While contractors can go for the EPC projects, the technically and financially sound private players will revive appetite for projects on PPP mode,” Chhibber said

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