Satish Parakh, MD and Promoter, Ashoka Buildcon Limited, says demonetisation has affected traffic and, in turn, BOT projects. The year, though, saw many positive policy shifts, but a lag in implementation marred capital availability for existing as well as new projects, he told BuisnessLine . Excerpts:

What’s your assessment of the demonetisation’s impact on the road construction sector?

Demonetisation has affected traffic, so all BOT projects have been badly impacted. Traffic has been 5-15 per cent lower in various projects and there is no compensation mechanism for the revenue lost. So we will have to borrow further funds to pay instalments.

On EPC contracts per say, the entire job of the highway sector is labour intensive. We have to pay the labourers in cash every week. Most of the contractors, including us, have now starting paying in cheques, this cannot happen all across the industry within a month or 50 days.

What should the government do to bring private participation equivalent to the pre-2010 levels in the road construction sector?

Participation in the roads business is not lesser than what we had in 2010 or so. Most of the companies have increased their capacity to build roads over the years. The only problem is, earlier we used to do 3-5 km a day at the national level, now we are trying to do 40 km/day. This can happen only by allowing more participation. The bidding criteria should be further relaxed.

What should be done to lower litigation?

The arbitral policy has been tweaked, but implementation lags. Even today, the settlement mindset is not there. The 75 per cent arbitral award disbursal is also not happening as fast as desired.

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