Circling Cities: Lucrative pipeline of ring road projects on offer

Lucrative pipeline of ring road projects on offer

In recent years, ring road construction has picked up pace with the launch and commissioning of several big-ticket projects across the country. Among various achievements was the commissioning of Phase I of the Varanasi Ring Road in Uttar Pradesh that entailed an investment of Rs 7.59 billion. Other key ring road projects commissioned in the past five years include the 10.9 km Phase I of the Agra Inner Ring Road worth Rs 3.3 billion (Uttar Pradesh) and the 29.65 km Phase I of the Chennai Outer Ring Road (ORR) worth Rs 10.81 billion (Tamil Nadu).

The launch of Bharatmala has lent an impetus to ring road development in the country. It envisages the construction of 28 ring roads in the cities of Pune, Bengaluru, Sambalpur, Madurai, Indore, Dhule, Raipur, Shivpuri, Delhi, Bhubaneswar, Gurugram, Surat, Patna, Lucknow, Varanasi, Vijayawada, Chitradurga, Amaravati, Sagar, Solapur, Jaipur, Belgaum, Nagpur, Agra, Kota, Dhanbad, Udaipur and Ranchi.

Ongoing projects

India Infrastructure Research identified 16 key ongoing ring road projects, which together span around 556 km, and entail a total investment of Rs 178 billion.

Engineering, procurement and construction (EPC) has emerged as the preferred mode of construction for ring roads, with 12 of the projects under consideration being implemented through it. Of the other four projects, three are being implemented through public-private partnerships (PPPs) while one is being executed through the hybrid annuity model (HAM).

Among the states, Uttar Pradesh is the front runner with six ongoing ring road projects, followed by Maharashtra with three. In terms of length too, Uttar Pradesh leads with 188 km of ring roads under execution. It is followed by Rajasthan with 122 km and Jammu & Kashmir with 100 km. In addition, Uttar Pradesh makes up around 45 per cent of the total investment being mobilised in ring roads, followed by Jammu & Kashmir with 22 per cent and Rajasthan with 12 per cent.

Some of the key ongoing ring road projects are the 105 km Lucknow Ring Road worth Rs 55 billion, the 74.62 km Package I of the Jodhpur Ring Road worth Rs 13 billion, the 58.25 km Jammu Ring Road worth Rs 20.24 billion, the 47 km Jaipur Ring Road worth Rs 8.1 billion and the 42.1 km Srinagar Ring Road worth Rs 18.6 billion.

Upcoming projects

According to India Infrastructure Research, there are 24 key ring road projects in the planned/ approved/announced stages. Spanning around 2,001 km, these are expected to entail an investment of over Rs 900 billion.

While the mode of implementation for eight projects is not known, 10 projects are planned to be executed through the EPC mode, five through PPPs and one through HAM. These projects offer an investment opportunity of around Rs 527 billion for contractors and Rs 162 billion for developers. State-wise, the maximum ring road network length of 536 km is expected to be developed in Telangana. It is followed by 259 km in Tamil Nadu and 217 km in Maharashtra. Of the total investment planned/proposed for construction of ring roads, 27 per cent will be contributed by the Maharashtra government, followed by Tamil Nadu (18 per cent) and Karnataka (16 per cent).

Of the 24 upcoming projects, the 363 km Hyderabad Regional Ring Road (RRR) is the longest. The Rs 55 billion project was granted in-principle approval by the central government in December 2018. Other noteworthy projects include the 285 km Satellite Tolled Ring Road (STRR) in Bengaluru (Rs 150 billion), the 132 km Warangal ORR (Rs 14.46 billion), the 129 km Pune Ring Road (Rs 238.28 billion) and the 123.01 km Chennai Peripheral Ring Road (PRR) (Rs 133.65 billion).

The way forward

Given the lucrative pipeline of ring road projects on offer, the outlook for the segment seems bullish. However, as is the case with other road projects, issues such as land acquisition and funding need to be addressed in a timely manner. Further, as many of the upcoming ring road projects are being undertaken by state-level authorities, it is imperative that the necessary steps are taken to attract greater levels of private participation in them.

Liya Rashid