India Infrastructure Research tracked a total of 380 road projects across the national highway and state highway segments. These comprise 16 completed, 187 under implementation, 26 awarded and 151 upcoming projects. The projects entail a total investment of over Rs 5.8 trillion.
In terms of investment, 3 per cent of the projects have been completed, 40 per cent are under implementation, 6 per cent have been awarded but are yet to commence construction activity and 51 per cent have been on the drawing board since January 2014. In terms of mode of implementation, 159 projects are being implemented under the engineering, procurement and construction (EPC) mode, 180 under the public-private partnership (PPP) mode and the mode of implementation for 41 projects is not available (these are mostly upcoming projects).
According to India Infrastructure Research, 16 projects covering 1,400 km and together worth about Rs 180 billion have been completed since January 2014. In the national highway segment, seven projects covering a length of over 500 km were completed. These projects, which were awarded between 2009 and 2012, have mobilised investments of about Rs 68 billion and were implemented on a PPP basis.
The big-ticket completed projects include the Rs 6.2 billion Hazaribagh-Ranchi road widening project implemented by a joint venture (JV) between IL&FS Transportation Networks Limited (ITNL) and Punj Lloyd Limited and the Rs 8.07 billion Panipat-Rohtak road widening project implemented by Sadbhav Engineering Limited. (The cost estimates are from the National Highways Authority of India’s [NHAI] website)
In December 2015, IRB Ahmedabad Vadodara Super Expressway Tollway Private Limited secured a provisional completion certificate (PCC) for a Rs 21 billion project entailing six-laning of the Ahmedabad-Vadodara section of National Highway (NH)-8. In the same month, NHAI issued a PCC to Sadbhav Engineering Limited for the Rs 9 billion Gomti Chauraha-Udaipur four-laning project.
At the state level, nine key projects spanning 930 km have been completed since January 2014. These projects, worth a total of Rs 111 billion, spanned Tamil Nadu, Andhra Pradesh, Maharashtra, Uttar Pradesh, Tamil Nadu, Rajasthan and Uttar Pradesh. Most of these projects were completed on a PPP basis. The projects entailing high investments include the Sion-Panvel Expressway (Rs 17 billion) and the Mumbai Eastern Freeway (Rs 13 billion) in Maharashtra, the Hyderabad-Karimnagar-Ramagundam four-laning project in Andhra Pradesh (Rs 22 billion) and Phase I of the Chennai Outer Ring Road Project in Tamil Nadu (Rs 13 billion).
There are 187 key ongoing national highway and state road projects with a combined length of over 25,000 km. These are expected to mobilise investments of over Rs 2.3 trillion. Most of these projects are likely to be completed between 2016 and 2018.
The national highway segment currently has 126 key projects under implementation. These cover a length of about 14,000 km and are valued at Rs 1.3 trillion. Of these 126 projects, 95 projects worth Rs 1.1 trillion are being implemented on a PPP basis and the remaining on an EPC basis. The ongoing PPP projects include the four-laning of the Amravati-Chikhli section and the Chenani-Nashri Tunnel Project being implemented by ITNL), the Panipat-Jalandhar road widening project, the Quazigund-Banihal Tunnel Project, four-laning of the Nagpur-Betul section by Oriental Structural Engineers and eight-laning of the Mukarba Chowk-Panipat section being implemented by Essel Infraprojects Limited. In the past year, construction work on a number of EPC projects has also begun. These include the Eastern Peripheral Expressway Project (six packages), and widening of the Rewa-Katni-Jabalpur section (three packages) and the Ambala-Kaithal section (two packages). Overall, about 50 ongoing national highway projects are scheduled for completion in 2016.
In the state road segment, there are 61 key ongoing projects, covering a length of about 12,000 km and valued at Rs 960 billion. These include 21 projects worth over Rs 300 billion, which are being implemented on a PPP basis. The remaining are being implemented on an EPC basis. Some of the big-ticket ongoing state road projects include the Agra-Lucknow Expressway in Uttar Pradesh, the Nehru Outer Ring Road in Telangana, the Signature Bridge in Delhi and the Bakhtiyarpur-Tajpur Bridge over the Ganga river in Bihar.
Projects awarded but work not started
In the past 8-12 months, 26 projects have been awarded which are yet to commence construction work. Of these, 21 are national highway projects spanning a length of about 800 km and worth over Rs 280 billion. Most of these projects were awarded on an EPC basis. The biggest of these projects is the Rs 100 billion Zojila Tunnel Project awarded to IRB Infrastructure Developers Limited. Other key projects are the Zuari Bridge project (first part of the project has reportedly been awarded to Dilip Buildcon Limited), Packages I and III of the Delhi-Meerut Expressway project and four-laning of the Ramban-Banihal and the Udhampur-Ramban sections. At the state level, the Rs 23 billion Kachi Dargah-Bidupur Bridge Project (Bihar New Ganga Bridge project or Ganga Path) has been awarded to a JV of Larsen & Toubro and Daewoo.
Projects on the drawing board
India Infrastructure Research estimates that the road sector currently has about 150 projects on the drawing board. These are at the feasibility or detailed project report stage, or under bidding. These projects are expected to entail an investment of close to Rs 3 trillion (cost estimates for most the projects are not available). Segment-wise, 56 projects are to be implemented in the national highway segment. These include several expressway projects, which have been put on the drawing board by the Ministry of Road Transport and Highways including the Vadodara-Mumbai, Bengaluru-Chennai and Kolkata-Dhanbad corridors. These proposed expressway projects will cover a combined length of over 1,800 km.
Meanwhile, 39 national highway projects covering a length of over 2,000 km and worth Rs 333 billion, have recently been approved. These are planned to be awarded by end-March 2016. Fourteen of these are to be awarded on hybrid annuity basis, four on a build-operate-transfer (BOT) basis and 21 on a EPC basis. The central government intends to approve projects on a weekly basis and award them to achieve the annual award target of 10,000 km for 2015-16.
The state road sector too has a lucrative pipeline of projects. In the past year or two, several states have created a huge shelf of road projects which offer investment and construction opportunities. According to India Infrastructure Research, there are 95 key state road projects in the pipeline, involving an investment of over Rs 2.7 trillion. The top upcoming projects include the Mumbai-Nagpur Expressway, Mumbai-Trans Harbour Link (MTHL), Bengaluru Peripheral Ring Road (PRR), Chennai PRR, Mumbai Coastal Road Project, Yamunanagar-Bawana Expressway Project, and Pune Ring Road Project. Among these, MTHL and the Bengaluru PRR have been on the drawing board for a long time.
The way forward
Going forward, strong policy support will continue to drive growth and aid in the realisation of the needed investment. Also, it is expected that private sector participation will be revived on the back of the recent government initiatives, including the launch of the hybrid annuity implementation model. Further, the government has announced that BOT (toll) projects will continue to be rolled out. In addition, efforts are being made to resolve impending disputes.
Meanwhile, project-related activity is also expected to pick up pace at the state level. On a positive note, states like Madhya Pradesh, Uttar Pradesh, Karnataka and Haryana have initiated policy steps to debottleneck project implementation. This should help in the sound execution of projects in the pipeline.