Bharatmala Phase 1 deadline extended by six years to FY28

Bharatmala Phase 1 deadline extended by six years to FY28

The government has extended the deadline for completion of the flagship highway development project Bharatmala Phase-I to 2027-28, a full six years from the original schedule. The move follows an over 100% increase in the estimate cost of the mega project to nearly Rs 11 trillion, and reflects the slowing of implementation, and financial constraints.

The first-phase of Bharatmala was announced in 2017 and was to be completed by 2022.

About 26,418 km of highway stretches – 76% of the total length of 34,800 km – have been awarded so far. However, in the first eight months of this financial year, only 102 km of projects under Bharatmala Phase 1 have been awarded. The pace of award will slow down even further until the revised cost of the project is sanctioned by the Cabinet Committee on Economic Affairs (CCEA) as the Ministry of Finance has barred the highways ministry from creating any fresh liability under the project till then.

After awarding all the identified stretches, the completion of construction has a new deadline of 2027-28. Till November-end 15,045 km or 42% of the project has been completed.

The Cabinet Committee had approved the first phase of Bharatmala Pariyojana in 2017 and was to cost Rs 5.35 trillion. Already the sanctioned cost of projects that have been awarded are touching Rs 8.5 trillion. The Public Investment Board has appraised the revised cost of Bharatmala Pariyojana Phase-I at Rs 10.95 trillion. Actual spending under the project has been Rs. 4.10 trillion till October-end.

According to the ministry, the difference in actual project cost and normative cost under Bharatmala Pariyojana is due to increase in cost of raw material, increased land acquisition cost, construction of high speed corridors and increase in Goods and Services Tax rates.

Significant changes made in the scope of projects and cost estimates as well as richer project specifications adopted have pushed up the sanctioned cost of projects awarded. This has resulted in sanctioned civil cost being Rs 23.89 crore per km as against the CCEA approved cost of Rs 13.98 crore per km and sanctioned pre-construction cost being Rs 8.28 crore per km as against the CCEA approved cost of Rs 1.39 crore per km.

Total length that was to be covered by Bharatmala project was 74942 km of which 35800 were to be completed in Phase 1 by 2022. As phase one still has a lot of ground to cover, how the government will look at executing the remaining 40,412 km is a matter of debate.

Already there is talk of not having phase two of Bharatmala and going back to the drawing board for a new scheme.