Year-ender 2020 | Infrastructure projects on track despite COVID blues, cost overrun a lingering issue
The relief measures announced under the Atmanirbhar Bharat 3.0 package indicate the government's continued focus on the sector.
December 29, 2020 / 03:33 PM IST
In a year which witnessed the economy being ravaged by a pandemic, the infrastructure sector is being earmarked as the ideal way to spark a revival. Road projects are being awarded at a very brisk pace although construction is yet to gain momentum. Steps have been taken by the government to expedite projects, like relaxation in norms for release of funds to highway builders.
The relief measures announced under the Atmanirbhar Bharat 3.0 package indicate the government's continued focus on the sector. Changes in the revised model concession agreement for hybrid annuities, though mostly effective prospectively, are still good for the sector, addressing key drawbacks of the old agreements and then some. Eased exit timeline for subsisting hybrid annuities too should help in the early release of capital.
— On-ground issues continue to linger as according to a report by the Ministry of Statistics and Programme Implementation, which monitors infrastructure projects worth Rs 150 crore and above, 441 reported cost overruns and 539 time escalation, resulting in a hit of Rs 4.37 lakh crore.
— In road construction, working capital requirements have been streamlined by rescheduling and fast-tracking payment cycles, thereby releasing more than Rs 8,000 crore worth of payments in the first six months of the lockdown.
— The Cabinet has given green signal for equity infusion of Rs 6,000 crore equity into the National Infrastructure Investment Fund’s debt platform. The announcement was made by FM Nirmala Sitharaman as part of the Atmanirbhar Bharat package announced in November.