India’s largest highway construction project after the National Highways Development Programme (NHDP), the Bharatmala Pariyojana is a new umbrella programme for the highways sector focused on optimising the efficiency of freight and passenger movement by bridging critical infrastructure gaps. Bharatmala is expected to offer immense opportunities across stakeholder groups and envisages an investment of Rs 10 trillion. Under Phase I, detailed project reports (DPRs) for about 29,000 km are under preparation, while civil contracts for over 4,400 km have already been awarded.
Update on Bharatmala
Launched in October 2017, Phase I of the Bharatmala Pariyojana comprises the construction of 24,800 km of road length and an additional 10,000 km of balance road works under the NHDP, taking the total to 34,800 km, at an estimated cost of Rs 5.35 trillion. This phase will be implemented over a period of five years (2017-18 to 2021-22) and will include economic corridors (9,000 km), inter-corridors and feeder routes (6,000 km), national corridor efficiency improvement works (5,000 km), border and international connectivity roads (2,000 km), coastal and port connectivity roads (2,000 km) and greenfield expressways (800 km), besides the road works planned under the NHDP.
A significant portion of the NHDP has already been completed. The balance works are either under implementation or have been subsumed under Bharatmala. Therefore, a need was felt to redefine road development and take a macro approach while planning the expansion of the national highways network. The primary focus of Bharatmala is to optimise efficiency in the movement of goods and people across the country. It envisages a corridor approach in place of the existing package-based approach which has, in many cases, resulted in skewed development.
As of August 2018, civil works for 4,466 km of roads have been awarded while DPRs for 29,681 km are in progress. State-wise, a total of 4,580 km of network is under various stages of implementation (civil contracts awarded/DPR stage) in Maharashtra. This is followed by Rajasthan (3,101 km), Madhya Pradesh (2,926 km), and Tamil Nadu (2,384 km). Category-wise, the highest road length (over 1,800 km) of economic corridors has been awarded for civil works and a network of over 11,500 km of economic corridors is in the DPR stage. This is followed by the national corridor and new national corridor category. Under Phase I, over 9,400 km of road network is targeted to be awarded during 2018-19.
The government is expected to launch seven greenfield projects to construct 3,000 km of expressways under the programme. Expressways will be developed for the following stretches: Delhi-Vadodara, Chennai-Salem in Tamil Nadu, Kharagpur-Siliguri in West Bengal, Delhi-Bilaspur, Durg-Aurang in Chhattisgarh, Mangaluru-Chitradurga in Karnataka, and Ambala-Kathputli in Haryana.
To fund this ambitious programme, the Ministry of Road Transport and Highways (MoRTH) has delineated a broad financing plan. While around Rs 1.4 trillion will be allocated under the Central Road Fund earmarked for national highways, Rs 2.09 trillion will come from market borrowings, Rs 1.06 trillion from private investments through public-private partnerships (PPPs), Rs 460 billion from the Permanent Bridge Fee Fund (toll collections of the National Highways Authority of India [NHAI]), and Rs 340 billion from asset monetisation. More recently, NHAI borrowed Rs 50 billion from the Employees’ Provident Fund Organisation by selling long-tenure bonds to help finance Bharatmala.
The overall outlook of the programme seems positive with significant progress already achieved with regard to the preparation of DPRs. Besides, all projects under the programme will be technically, financially and economically appraised by an empowered Project Appraisal and Technical Scrutiny Committee. Also, a “Grand Challenge” mechanism has been planned to encourage state government participation in the implementation of the programme. Projects that gain support through proactive efforts of the concerned state governments will be taken up on a priority basis.
Prior to the implementation, several measures will need to be put in place to ensure the programme’s success. Key among these is the incorporation of an independent regulator that will be responsible for the timely redressal of disputes. Further, a slew of initiatives including the enhancement of the approval limit of projects by NHAI from Rs 10 billion to Rs 20 billion, increasing the compensation rates to farmers under the new land acquisition policy, and digitising land acquisitions will prove to be vital in expediting project implementation under the programme.