Why did the Bank issue a warning last year of possibly stopping funds for highway projects?
We had expressed concerns regarding implementation delays and safety-related issues pertaining to the Lucknow-Muzaffarpur National Highway Project. Our concerns were: poor implementation by the contractors and the consultants supervising them, inadequate contract management and enforcement, safety deficiencies at work sites, and design quality issues.
And corruption and cost overruns?
Time overrun leading to cost overrun is a major issue in highway projects, sometimes leading to 20 per cent increase in project cost. Weak designs also contribute to cost overrun. However, things seem to have improved under the PPP approach undertaken by NHAI since 2006. Some of the failures/delays could be a result of corrupt practices.
How far have the Bank's concerns been addressed?
The Government of India and implementation agencies like NHAI share our concerns regarding implementation. The Bank and the ministry have developed an action plan to address issues in safety, design and quality and contract management. Satisfactory implementation of the action plan should result in improved performance in meeting targets. Availability of skilled manpower and capacity remain serious concerns. Building that capacity is a priority of this action plan. We expect this to show results in the next two-three years.
Is India's PPP push to blame then?
India's PPP model is well-suited to various types of infrastructure projects like roads, ports, etc. However, sponsoring agencies have to undertake greater responsibility in pre-construction activities, especially in streamlining land acquisition and resettlement.