Lok Sabha Question No. 1409 (UNSTARRED), answered on 2018-07-26
Subject: Cost Escalation in Highways
Ministry: ROAD TRANSPORT AND HIGHWAYS
Asked by: SUPRIYA SADANAND SULE, JAYAKUMAR JAYAVARDHAN, DHANANJAY BHIMRAO MAHADIK, HEENA VIJAYKUMAR GAVIT, SUNIL BALIRAM GAIKWAD, P.R. SUNDARAM, VIJAYSINH MOHITE PATIL, RAJEEV SHANKARRAO SATAV

## GOVERNMENT OF INDIA MINISTRY OF ROAD TRANSPORT AND HIGHWAYS

## LOK SABHA UNSTARRED QUESTION NO. 1409

ANSWERED ON 26 TH  JULY, 2018

## COST ESCALATION IN HIGHWAYS

## 1409.  SHRIMATI SUPRIYA SULE:

DR. J. JAYAVARDHAN:

SHRI DHANANJAY MAHADIK:

DR. HEENA VIJAYKUMAR GAVIT:

DR. SUNIL BALIRAM GAIKWAD:

SHRI P.R. SUNDARAM:

SHRI MOHITE PATIL VIJAYSINH SHANKARRAO:

SHRI SATAV RAJEEV:

## Will the Minister of ROAD TRANSPORT AND HIGHWAYS सडक परिवहन औि िाजमार्ग मंत्री

be pleased to state:

- (a) whether the shortage of sand has pushed up the cost of building highways in the country and if so, the details thereof;
- (b) whether  the  Government  has  devised  any  alternative  mechanism  to  reduce  the  cost  of building highways in the country and if so, the details thereof;
- (c) whether there has been cost and time overrun in many National Highway projects in the country;
- (d) if so, the details thereof during each of the last three years and the current year, State and project-wise;
- (e) whether with the aim to minimize the cost overrun and delays in completion of highway projects the process of project preparation is being amended, if so, the details thereof; and
- (f) the corrective measures taken by the Government to expedite the work on these projects?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF ROAD TRANSPORT AND HIGHWAYS

## (SHRI MANSUKH L. MANDAVIYA)

(a) to ( b)  Any increase in the cost of material pushes the cost of the project. It applies for any project located in any part of the country. To face this problem, ministry encourages alternate materials like use of Fly Ash in embankments, cement treated base/sub-base etc., Cost Benefit Analysis  for  changing  from  the  Rigid  pavement  to  Flexible  pavements  due  to  constraints  of limited/non-availability of sand in affected areas. Development of Green Field Corridors in order to reduce cost of land acquisition & utility shifting, forest diversion etc. are also explored.

(c) to (d) The Details of the delayed projects is given at Annexure-I. For cost overrun in EPC & Item  Rate  contracts,  there  is  a  provision  for  payment  of  escalation  due  to  delay.  In  case  the project  is  delayed  due  to  reasons  attributable  to  the  contractor,  liquidated  damages  are  to  be imposed and no escalation is paid.

(e) to (f) Equipment based surveys and investigation (Lidar technology) has been introduced to bring out accuracy in the DPR preparation to avoid delays. The corrective measures taken by the Government to expedite the work on these projects are given in Annexure-II.

ANNEXURE REFERRED  TO  IN  REPLY  TO  PARTS  (c)  TO  (d)  OF  LOK  SABHA UNSTARRED QUESTION NO. 1409 FOR ANSWER ON 26.07.2018 ASKED BY SHRIMATI SUPRIYA SULE, DR. J. JAYAVARDHAN, SHRI DHANANJAY MAHADIK, DR. HEENA VIJAYKUMAR GAVIT, DR. SUNIL BALIRAM GAIKWAD, SHRI P.R. SUNDARAM, SHRI MOHITE  PATIL  VIJAYSINH  SHANKARRAO  &  SHRI  SATAV  RAJEEV  REGARDING COST ESCALATION IN HIGHWAYS.

State-wise details of the Delayed projects

| S No   | State/Scheme/Agency   |   Number of Delayed Projects |
|--------|-----------------------|------------------------------|
| 1      | Andhra Pradesh        |                            2 |
| 2      | Assam                 |                           11 |
| 3      | Bihar                 |                            5 |
| 4      | Chhattisgarh          |                            7 |
| 5      | Goa                   |                            1 |
| 6      | Gujarat               |                            7 |
| 7      | Haryana               |                            1 |
| 8      | Jammu &Kashmir        |                            3 |
| 9      | Himachal Pradesh      |                            9 |
| 10     | Jharkhand             |                           11 |
| 11     | Kerala                |                            4 |
| 12     | Madhya Pradesh        |                            4 |
| 13     | Manipur               |                            1 |
| 14     | Meghalaya             |                            6 |
| 15     | Nagaland              |                            2 |
| 16     | Odisha                |                            7 |
| 17     | Punjab                |                            1 |
| 18     | Rajasthan             |                            9 |
| 19     | Tamil Nadu            |                            6 |
| 20     | Telangana             |                            3 |
| 21     | Uttar Pradesh         |                            7 |
| 22     | Uttarakhand           |                            4 |
| 23     | West Bengal           |                            7 |
| 24     | LWE                   |                           43 |
| 25     | SARDP-NE (PWD)        |                           32 |
| 26     | NHDP-IV A             |                           47 |
| 27     | VRC                   |                            5 |
| 28     | NHIIP/EAP             |                            8 |
| 29     | CHARDHAM              |                            1 |
| 30     | NHAI                  |                          138 |
| 31     | NHIDCL                |                           22 |
|        | Total                 |                          414 |

## Annexure-II

ANNEXURE REFERRED  TO  IN  REPLY  TO  PART  (e)  TO  (f)  OF  LOK  SABHA UNSTARRED QUESTION NO. 1409 FOR ANSWER ON 26.07.2018 ASKED BY SHRIMATI SUPRIYA SULE, DR. J. JAYAVARDHAN, SHRI DHANANJAY MAHADIK, DR. HEENA VIJAYKUMAR GAVIT, DR. SUNIL BALIRAM GAIKWAD, SHRI P.R. SUNDARAM, SHRI MOHITE  PATIL  VIJAYSINH  SHANKARRAO  &  SHRI  SATAV  RAJEEV  REGARDING COST ESCALATION IN HIGHWAYS.

## The corrective measures taken by the Government to expedite the work

-  Streamlining of land acquisition
-  Disputes Resolution mechanism revamped
-  Award of projects after adequate preparation in terms of land acquisition, clearances etc. Process of obtaining clearances from different Ministries/Dept. would commence  as  soon  as  the  alignment  is  finalized  and  final  feasibility  report  is submitted.
-  Correctly  worked  out  utility  estimates  is  to  be  obtained  at  the  earliest  after  the alignment finalization and shall form part of appraisal proposal.
-  The process of project appraisal should commence at the earliest on receipt of the Final Detailed Project Report (DPR) and Technical schedules.
-  ROBs:  The  procedure  for  GAD  approved  by  Railways  for  ROBs  simplified  and made  online.   Maintenance  charges  which  were  hampering  the  progress  of  many projects stand waived by railways.  Standard design put on website.
-  Close coordination with other Ministries and State Governments
-  One time fund infusion
-  Completion of major portion of land acquisition prior to initiation of bid.
-  Regular review at various levels.
-  Proposed exit for Equity Investors
-  Securitization of road sector loans
-  Rationalize compensation for delays attributed to authority

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