Click here for and search 31st December Spotlight/News analysis for audio
PM Modi has recently laid foundation stone for the construction of Delhi-Dasna-Meerut 14 lane expressway and up gradation of 22 KM long Dasna-Hapur section of NH-24, which is Rs. 7,566 crore.
PM highlighted the importance of road connectivity in the economic development of the country. If a city is connected to another city within 100 Km of radius, it increases the chances of development by leaps and bounds. This recalls the Golden Quadrilateral project launched by the erstwhile Vajpayee govt in 2001. It is a highway network project connecting many industrial, agricultural and cultural centres of India. A quadrilateral is formed by connecting Delhi, Mumbai, Chennai, and Kolkata.
The present project is aimed at cutting down congestion in Delhi, which is more than Mumbai and Chennai put together, and reduce travel time between Delhi and Meerut to 30/40 minutes.
- Indian road sector is the second largest in the world. We are having around 47 lakh KM of road network in our country (only 54-55% of this is paved).
- 80% of passengers travel by road
- 65% of freight goods are transported by road
- All over the world it has been witnessed that wherever there are good roads, there has been a progress. For example, the Noida and Agra expressway has caused the kind of development that we see now around in Delhi.
This project is set to spur construction activity, which is the second largest employment provider in the country after the agriculture sector.
The total outlay for the infrastructure sector in the 12th FYP (2012-2017) was $1 trillion. Out of this, 20 per cent is to be spent for road development. However, in the last five years, there was not much activity in the road construction.
By the time when the present govt took over reins in the last year, there were around 5 lakh crore worth infrastructure projects that were stalled for various reasons. Later, around 3 lakh crore worth projects have been cleared. The present govt is targeting to construct 30 KM a day by 2017.
According to a Goldman Sachs estimate of 2009, India will need about 1.7 trillion USD by 2020 to give a boost to its economic development.
Why the road sector was not doing well?
Earlier, the emphasis was on PPP. The concessionaire who bid for a project could not get clearances for land/environment/others within a specific time. This caused escalation in the costs of the project. Hence many projects couldn’t see the light of the day.
Poor enforcement of PPP contracts and lack of dispute resolution mechanisms are the major reasons for the failure of PPP projects.
Now, the govt came up with hybrid PPP in which 40% of equity will be given by govt and the rest by the concessionaire (the private player who is constructing the road). Since this involves a financial stake of govt also, the govt is ready to clear the regulatory hurdles.
Also, recently govt has launched National Investment and Infrastructure Fund which has 40,000 crore corpus. The NIIF is meant to fund development of infrastructure projects, including reviving the stalled ones. Govt will invest 20,000 crore and the rest comes from private investors.
States have to actively participate in the road development project. Land is a state subject and states have to cooperate with centre on this aspect.
If India were to achieve higher growth rates, then development of world class infrastructure is a must. There is a need for integration of water grids, transmission grids, and the green corridors along with the construction of roads. We also have to create integrated multi-modal transport systems, where there has to be a connectivity of inland waterways, ports, rails and roads. In the village roads sector, there has to be pucca roads connecting the last mile villages. The PM GSY is doing well in this area.
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