Over the past two years, the central government has been focusing on the development of road infrastructure in the north-eastern region. To facilitate this, the government has set up National Highways and Infrastructure Development Corporation Limited (NHIDCL) which has now been operational for over two years. The corporation’s sole mandate is to construct national highways and other road-related infrastructure in the north-eastern region and other strategic areas across the country.
Since its inception, NHIDCL has set up offices across several states such as Assam, Arunachal Pradesh, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand. As of September 2016, it has been entrusted with the development of 135 road projects across 13 states. These projects cover a total length of 7,614 km with an estimated civil cost of around Rs 800 billion and a total project cost of Rs 1 trillion (including land acquisition costs).
Assessing the state-wise potential, the maximum investment opportunity, in terms of estimated civil cost, is in Manipur at about Rs 124 billion. This is followed by Arunachal Pradesh at Rs 104 billion and Assam at Rs 98 billion. In terms of length, 18 roads and bridges projects spanning over 1,500 km will be implemented in Manipur and 29 projects covering a length of 1,100 km in Arunachal Pradesh. This is over 30 per cent of the total length to be developed by NHIDCL.
Over the past year, NHIDCL has awarded 24 projects of about 614 km length. These are to be developed at an investment of about
Rs 66 billion (civil cost). Notably, a number of these projects have made headway. Eight projects have already achieved physical progress equivalent to 10 per cent or more of the total project work. Moreover, of the projects awarded over the past year, Arunachal Pradesh has 10 projects where work has started, followed by Assam, where five projects are already under construction.
Recently, in July 2016, the tendering process for two tunnel projects in Jammu & Kashmir – the 14 km Zojila tunnel worth Rs 90 billion and the 6.5 km Z-Morh tunnel worth
Rs 26.8 billion – was transferred to NHIDCL by the Ministry of Road Transport and Highways (MoRTH). At present, while the Zojila project is being retendered, the Z-Morh tunnel project has been awarded to Eptisa Servicios de Ingeniería S.L. and construction work has begun.
The engineering, procurement and construction (EPC) model dominates the implementation mix currently. NHIDCL is developing 13 projects at an investment of Rs 65 billion, on an EPC basis, while the two tunnel construction projects in Jammu & Kashmir are being developed on a design-build-finance-operate-transfer (DBFOT) (annuity) basis. The development of a four-lane bridge and a four-lane connecting road from Gohpur to Numaligarh in Assam is being undertaken on a build-operate-transfer (BOT) (annuity) basis, at an investment of Rs 30 billion.
Some of these projects are being financed by multilateral agencies. For instance, the Japan International Cooperation Agency (JICA) is currently funding six NHIDCL projects. These projects, 399 km in length, require an estimated investment of around Rs 40 billion. JICA is in the process of sanctioning loans to various other road projects as well. Besides, the Asian Development Bank has also financed seven projects (till September 2016), spanning over 878 km, with civil cost investments of about Rs 76.5 billion.
Issues and the way forward
NHIDCL continues to face several issues while implementing projects. For instance, land acquisition and forest clearances are difficult to come by. NHIDCL has targeted a reduction in the time taken for alignment, land acquisition and forest clearances from the current two-three years to a maximum of 12 months. Moreover, to ensure the speedy implementation of projects in the future, NHIDCL has targeted a maximum duration of nine months to prepare a detailed project report, from the current average of 12-24 months.
Going forward, in 2016-17, NHIDCL has proposed the award of 54 projects covering over 4,900 km. These projects will require an investment of more than Rs 500 billion. Moreover, by 2020, NHIDCL has targeted the construction of about 10,000 km of roads, 100 km of tunnels and 2,000 bridges. For this target to be met, the corporation estimates an investment requirement of Rs 1.3 trillion.
NHIDCL has also proposed improving road connectivity along the international trade corridor. It intends to expand roads in north Bengal and the north-eastern region of the country by about 500 km. These steps are expected to improve India’s connectivity with other South Asia Subregional Economic Cooperation countries. Further, it is also planning to assist the Nepal government on a project in the Terai region which involves the construction of 19 postal roads spanning over 600 km. NHIDCL will be the consultant for the entire project.
However, inherent challenges to road construction in the Northeast, such as geological and resource constraints, will continue to exist. NHIDCL and the MoRTH will need to work together to overcome these issues and ensure that the focus on road development in the region is maintained.