The roads sector growth and economy go hand in hand. It is expected that the government would streamline a number of areas in the coming days leading to the overall revival, states Bovin Kumar, COO, Cube Highways and Transportation Assets Advisors (P) Ltd.
During the lockdown over the last couple of months, entire road sector has lost out on different fronts, viz BOT projects lost in terms of Toll Revenue, expenses on operation and maintenance, and projects under construction have lost in terms of inventory costs of construction materials, labour/staff salaries & machinery hire charges. Due to the long duration of the pandemic, cash flow has become one of the biggest challenges during this tough time. When the things started opening up, migration of labour started increasing the problems of the industry in term of availability of the labour.
The Government has come up with relief packages to various sectors. In case of road sector, the reliefs announced by the Government are mainly as per force majeure provisions in the concession agreements. However, gravity of situation arisen because of this pandemic is beyond provisions of any contracts. Probably no contracts were framed considering such an extreme situation. No one would have visualised such situations while framing these contracts. The relief package announced so far is not adequate considering the type of challenges being faced by the road sector. Therefore, there is a need to come out with relief package beyond contract provisions. This would not only help the industry to come out of crisis but also strengthen the trust of the investors.
Road sector first to open
As the road sector started opening much before other sectors, the traffic volume is on the path of recovery. As of now traffic has come up beyond 60%. Though it is difficult to guess how the situation would develop over couple of months, yet it appears that over the next few months, traffic might come up beyond 80% of the normal traffic. Depending on COVID -19 situation, in a couple of months, it might even recover to almost normal.
New Way of Working
Corona has definitely changed the way we work. The lockdowns have helped people to explore the other tools to streamline their work. Unified communication tools like Microsoft teams/Zoom have been instrumental in managing the office work close to normal. It is not that new technologies have come up during this time, but lockdown converted it into a necessity and hence the pace of implementation of the technology in all sectors including Government offices has been beyond expectations. Acceptability of work from home has increased, online transactions have increased. This transformation is going to improve the efficiency all around and would help the country in a big way.