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The ministry of road transport and exceeded its highway

construc?on target for the fiscal year 2021 despite the

pandemic-led disrup?ons and na?onwide lockdown

during the first quarter when construc?on ac?vity came to

a stands?ll.

Around 13,000 km of highways were built in FY21 or 37 km

per day. In comparison, the target for 2019-20 was 11,000

km.

The ministry ini?ated a slew of relief measures, which

helped it exceed the target, including the shi? from milestone-based billing (typically 45-75 days) to monthly

billing and release of reten?on money or performance

security in propor?on to the work already executed. The

ini?a?ves helped in reducing the cash conversion cycle

while also ge?ng performance guarantees and associated

margin monies released for the executed por?on of the

projects.

The strictest part of the lockdown, between March and

July, took place just before or during the monsoon when

construc?on work is typically very limited. Economic

ac?vity started picking up from August-September when

road construc?on restarted. Government measures, such

as bank guarantees for road contractors, which ensured

steady cash flow, fast-tracking payments and clearing

pending dues, besides ensuring availability of land for road

construc?on projects, aided construc?on ac?vity.

The government also focused on making land available to

contractors. It was also successful in channelling funds, and

making ?mely payments and clearing dues, and facilita?ng

payments that helped contractors achieve be?er cash flow

to finish projects on ?me. Also, traffic on na?onal highways

recovered to pre-pandemic levels a?er the lockdown was

li?ed, while rail and air passenger traffic remained sluggish.

The ministry was also able to ramp up road projects ahead

of the deadline as all fund-related challenges of contractors

were addressed by the ministry, and the contractors, in

turn, had to mobilize construc?on workers to complete the

projects.