The average per kilometre cost for upgrading to four-lane roads under Phase-II of National Highways Development Project (NHDP) has been revised upward to Rs.6.52 crore at 2006 prices, against the earlier cost of Rs.4.75 crore per km at 2002 prices.

The increase in per kilometre cost for upgrading and expanding national highways under NHDP-II has been approved by the Prime Minister's Committee on Infrastructure. The awarded contracts for NHDP Phase-II provide for price escalation and therefore, final cost of construction will be assessed only after completion of the projects.

Phase-II covering 7,300 km of north-south and east-west corridors was estimated to cost of Rs.34,339 crore at 2002 price-level. Of the targeted 1,758 km under NHDP-II , NHAI was able to award just 48 per cent or 845 km for upgradation in 2006-07.

As per the Ministry of Statistics & Programme Implementation Report, 2006, on central sector infrastructure projects, of the 187 road projects monitored by the ministry, there is only one major project with cost overrun. But there are as many as six major and two medium projects under the different phases of NHDP with both cost and time overrun.

The Ministry of Shipping, Road Transport and Highways has approved 4,229 projects for improvement of state roads from the Central Road Fund (CRF) for an aggregate amount of Rs.8,142.99 crore as on January 2007 since 2000-2001. During 2003-06, as many as 1,517 road projects were approved for development under CRF at an estimated cost of Rs.2,078.22 crore.