Page 57 - TT mag Oct-Nov -Digital

SMART MOBILITY 2018

Challenges in Project

Execution- Highway Sector

Ashok Katariya, Chairman,

Ashoka Buildcon Ltd addresses the
challenges in executing the Highway
Projects in India at the Smart Mobility

2018 conference

he Ministry of Road - was a small bypass near Dhule; we subsidiary of Ashoka Buildcon. Our
Transport and Highways went on to deliver major highways commitment to quality and ability to
has set an ambitious such as the East Coast Road, scale up has reinforced our investors’
target of constructing 45 recognised as a model road by the faith in our vision.
Tkilometres of highways Government of India. Even now, over
on every day of this financial year. half of all PPP projects are roads and Challenges in Highway
However, several factors have bridges. Project Execution:
slowed this ideal rate of construction We started off with projects worth Volatility of the Indian Economy:
down to just 23 kilometres per day. just ₹7 crore; over the years, we have PPP projects often have long
As one of India’s biggest highway worked on projects cumulatively execution timelines, sometimes
project executing companies, Ashoka worth ₹16,000 crore, laying over as long as 20 to 30 years. During
Buildcon has an insider’s perspective 15,000 kilometres of national and this period, interest rates fluctuate
on the present challenges in highway state highways all over the country. frequently and unpredictably. This
construction. Many of our projects are now volatility affects the finances of the
But first, some background on executed under the Engineering- executing agency, in turn affecting
Ashoka Buildcon; founded in 1975, Procurement-Construction (EPC) the project.
we have been in the highway model, and we are also one of the Corporate bonds are the best
development sector for the last 23 biggest players in highway operations solution to achieving stability in this
years. The Golden Quadrilateral and maintenance. sector. India needs to rethink and
project connecting the four Initially, we had meagre funding. reform how it finances its roads.
metropolitan cities, the Mumbai- IDFC invested ₹100 crores in Ashoka
Pune Expressway and scores of Buildcon in 2006, then we floated a Red-tapism:
flyovers across Mumbai kick-started public offering in 2010, which netted A number of factors beyond the
our growth as contractors for ₹225 crores. With foreign investments control of the executing agency
Public-Private Partnership (PPP) road being permitted, some capital also can cause delays in completing the
projects. Our first project - executed came in from Japan. Recently, SBI entire length of the road. These
on Build-Operate-Transfer (BOT) basis Macquarie invested ₹800 crore in a factors may create a situation where,

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