Govt Extends Bharatmala Phase-I Deadline To 2027-28 Amidst Cost Escalation, Implementation Challenges
In a significant development, the government has announced a six-year extension to the deadline for completing the flagship highway development project, Bharatmala Phase-I, now slated for 2027-28.
This extension comes as a response to a staggering 100 per cent increase in the estimated cost of the mega project, soaring to nearly Rs 11 trillion, and is attributed to the deceleration of implementation and financial constraints faced during the course of the initiative.
Initially launched in 2017, the first phase of Bharatmala was scheduled for completion by 2022. However, due to various challenges, including the increase in project costs and a slower-than-anticipated implementation pace, the government deemed it necessary to extend the timeline for completion.
A senior official from the Ministry of Road Transport and Highways (MoRTH) emphasised that the ministry's objective is to award all projects upon completion of land acquisition and obtaining all clearances by the end of 2024-25.
As of now, approximately 76 per cent of the total length of 34,800 km of highway stretches under Bharatmala Phase-I have been awarded, totaling 26,418 km. Surprisingly, in the first eight months of the current financial year, only 102 km of projects have been awarded under this phase.
The slow pace of awarding contracts is expected to persist until the Cabinet Committee on Economic Affairs (CCEA) sanctions the revised cost of the project.
The new completion deadline for the identified stretches is now set for 2027-28, with only 42 per cent of the project being completed as of November-end, covering 15,045 km.
Initially approved in 2017 at a cost of Rs 5.35 trillion, the sanctioned cost of awarded projects has surged to approximately Rs 8.5 trillion. The revised cost, appraised by the Public Investment Board, stands at Rs 10.95 trillion. Actual spending on the project reached Rs 4.10 trillion by October-end.
The disparities in project costs, as stated by the ministry, are attributed to increased costs of raw materials, elevated land acquisition expenses, construction of high-speed corridors, and an increase in Goods and Services Tax rates.
Changes in project scope and cost estimates, along with enhanced project specifications, have contributed to the rise in sanctioned project costs. The sanctioned civil cost per km is now Rs 23.89 crore, compared to the CCEA-approved cost of Rs 13.98 crore per km. Similarly, the sanctioned pre-construction cost per km is Rs 8.28 crore, contrasting with the CCEA-approved cost of Rs 1.39 crore per km.
With the completion of Phase-I still underway, covering 26,418 km out of the planned 34,800 km, questions arise about the government's approach to executing the remaining 40,412 km. There is already speculation about the possibility of abandoning Phase-II of Bharatmala and revisiting the drawing board for a new scheme.
The future of this ambitious highway development project now stands at a critical juncture, requiring careful consideration and strategic planning by the authorities.
