Views of Nitin Jairam Gadkari: “Strict competition in the sector will ensure the survival of the fittest”

“Strict competition in the sector will ensure the survival of the fittest”

Nitin Jairam GadkariRoad infrastructure plays a critical role in the growth of the Indian economy since about 70 per cent of the goods traffic and 90 per cent of the passenger traffic is carried by the road network. During 2020-21, the Ministry of Road Transport and Highways (MoRTH) constructed 13,327 km of national highways, 21 per cent more than the target, despite the Covid-19 situation. During 2021-22, the government has awarded 1,681 km of highways and constructed 2,284 km of highways as of June 2021. At a recent conference organised by Indian Infrastructure, Nitin Jairam Gadkari, Union Minister for Road Transport and Highways, and Micro, Small and Medium Enterprises, delivered the keynote address, sharing his perspective on the ministry’s key priorities and targets, achievements so far, and the need for innovation in technology and raw materials for road construction. Excerpts…

What are the ministry’s asset monetisation targets?

The government is implementing innovative financing strategies such as monetisation of highway assets through infrastructure investment trusts (InvITs), toll-operate-transfer (TOT) and special purpose vehicle formation for enabling wider investor participation. The National Highways Authority of India has targeted to raise Rs 50 billion through the InvIT route. Besides, the ministry plans to raise Rs 1 trillion through the TOT model over the next five years.

What steps are being taken to encourage private participation in the sector?

The ministry has already appointed a committee comprising industry leaders and experts from institutes like the Indian Institutes of Technology for suggesting the necessary reforms to iron out the challenges being faced by private players in the road sector. The ministry is working towards making the necessary changes in policies, codes, etc. to create a digital framework for striking out the inefficiencies in project implementation. Besides, a model of linking highway construction with digging of waterbodies in drought-affected areas has been developed and approved by NITI Aayog. The ministry is open to communication with private players to understand the needs of the industry.

Is the ministry contemplating any relief measures with regard to Covid-19?

The ministry has always been supportive of the construction industry. A lot of relief measures have already been provided to contractors and developers to help them mitigate the challenges posed by the pandemic. The ministry is also willing to hear from contractors about the issues they are facing so that appropriate steps can be taken to address them.

What are some of the recent developments in the expressway segment?

The government has launched the Bharatmala Pariyojana, which envisages the development of 34,800 km of national highways at a cost of about Rs 10 trillion. Under the programme, the ministry is developing 22 greenfield expressways spanning about 2,500 km and access-controlled corridors spanning about 5,500 km at a capital cost of Rs 3.32 trillion. These corridors are expected to be completed by 2024-25, with projects spanning 900 km to be completed in financial year 2022. The upcoming Delhi-Mumbai Expressway is a 1,290 km alignment, which will reduce the travel time between Delhi and Mumbai to 12 hours. Apart from this, India’s first 14-lane highway, the Delhi-Meerut Expressway, is expected to be inaugurated soon. The 313 km Ambala-Kotputli highway (Trans Haryana Highway), the 217 km Delhi-Dausa section of the Delhi-Mumbai Expressway, the 100 km Vadodara-Ankleshwar-Bharuch section of the Delhi-Mumbai Expressway, and the 277 km Bikaner-Panchpadra section of the Amritsar-Jamnagar Expressway are being built as part of the National Infrastructure Pipeline. Besides, 2,670 national highway projects spanning about 100,000 km are being taken up for development by 2024-25 at a cost of Rs 20 trillion. The World Bank has recently signed a $500 million project agreement with the central government to build green national highway corridors in Rajasthan, Himachal Pradesh, Uttar Pradesh and Andhra Pradesh.

“The ministry is willing to hear from contractors about the issues they are facing so that appropriate steps
can be taken to address them.”

How is the ministry supporting innovations in road construction?

The ministry is continuously working on the concept of carbon steel, while innovations in bridge construction are also being explored. The distance between two piers is usually 30 metres. However, the ministry is now permitting the installation of piers at a distance of 120 metres. The use of steel fibre for the construction of beams between piers is being explored. Currently, conservative designs for road projects contribute to the high cost of projects. The ministry is now working on reducing the design cost of road projects. The MoRTH is also working on using precast slabs for road construction.

The ministry has been encouraging construction companies to look for alternatives for cement and steel, such as plastic, jute, choir and waste material. The lifecycle cost criterion should be used for choosing the right material for road construction. The ministry has issued guidelines for the use of 8 per cent waste plastic for the construction of bituminous pavements and service roads. So far, 703 km of roads have been constructed using plastic waste. Besides, recycling of bituminous pavement material has been made possible using innovative technologies. Crumb rubber modified bitumen (CRMB) is an environment-friendly material, which improves the surface quality of bitumen roads. Recently, a 110 km stretch of road on the Pune-Solapur highway was strengthened with CRMB.

What are the cost-effective alternatives to diesel/petrol?

The use of CNG, LNG and ethanol is being encouraged for operating road construction equipment to reduce the dependence on diesel/petrol. Ethanol costs Rs 60-Rs 63 per litre whereas petrol and diesel are being sold at over Rs 100 per litre. Electric trucks are also coming up in the market for cost optimisation. The ministry is encouraging suggestions from the construction industry with regard to innovations in road construction.

Can the relaxation in bidding norms lead to a reduction in the quality of road construction?

The government has removed the requirement for earnest money deposit for bidding for new tenders, in order to enable wider participation from industry players in highway construction. The ministry has also relaxed the technical and financial eligibility criteria for bidders. It is not necessary that new contractors quoting lower bids will compromise on construction quality. Rather, the ministry continues to encourage stricter competition in the road construction sector by relaxing bidding norms and providing an opportunities to contractors that are capable of constructing quality roads at a lower cost. The increase in competition will also encourage the large construction companies to explore innovative and cost-effective construction techniques and materials to be able to survive in the market. Bidding will be conducted in a fair and transparent manner to provide opportunities to deserving contractors. Strict competition in the sector will ensure the survival of the fittest.

Can there be a better measure than the wholesale price index for measuring escalations in costs?

We will have to look at the binding contractual terms and conditions before considering the issues pertaining to the measurement of cost escalation in construction projects. While the high cost of construction remains a key issue, the industry must look at enhancing the use of cost-effective construction materials such as steel fibres and plastic fibres to reduce its dependence on cement and steel. We should learn from international experience about how to reduce the cost of road construction. Soil stabilisation techniques need to be explored as well. In order to break the monopoly in the steel industry, the ministry now allows the procurement of steel from any source, as long as the quality standards are being met.

What will be the ministry’s top priorities for the future?

Some of the key focus areas of the government are completion of the upcoming 22 green express highways, removal of black spots on national highways, reduction of road accidents by 50 per cent, 100 per cent penetration of electronic toll collection on national highways, implementation of the advanced traffic management system and resolution of claims worth Rs 415 billion. The government is also coming up with the second phase of the Bharatmala Pariyojana. The ministry aims to construct 60,000 km of national highways by 2024 at a construction rate of 40 km per day. The current construction rate stands at 37 km per day, which is the highest ever in the world.