The road sector has taken major strides over the past few years, backed by strong government support. The focus has been on not just improving connectivity, but also on safety, quality and expeditious development. Private capital has flowed in, encouraged by innovative financing models. In an interview with Indian Infrastructure, Nitin Jairam Gadkari, Union Minister, Ministry of Road Transport and Highways (MoRTH), talks about the progress, plans and priorities for the sector. Excerpts…
How would you assess the growth of India’s road sector? What have been the ministry’s key initiatives and achievements?
India’s total national highway (NH) network stands at 146,145 km as of July 2023, a growth of 60 per cent from 91,287 km in April 2014. It is envisaged that this network will increase 1.3 times to 185,000 km by 2030 and 1.6 times to 237,000 km by 2047. So far, 102,710 km of national highway works have been awarded and 86,406 km constructed. Work is ongoing for 45,000 km at a capital cost of Rs 10 lakh crore. The average annual award has nearly tripled during the period 2014-23 (11,287 km) vis-à-vis 2004-14 (3,952 km). The average annual construction has more than doubled from 4,174 km during 2004-14 to 9,304 km in 2014-23. MoRTH’s focus has been on not just increasing the length of the national highway network but also on enhancing the lane configuration of roads. Between 2014 and 2023, the length of national highway with four lanes and above has increased 2.4 times, from 18,371 km (20 per cent of the total) to 44,654 km (31 per cent of the total). Similarly, the length of two-lane/ two-lane with paved shoulder NHs has increased 1.8 times, from 45,399 km (50 per cent of the total) to 83,941 km (58 per cent of the total).
MoRTH’s flagship scheme, the Bharatmala Pariyojana has adopted a scientific planning approach to identify 65,000 km of network to connect 600 districts with four+ lane highways. Under Phase I, 34,800 km of national highways are being developed, of which 26,900 km has been awarded and 14,300 km has been constructed so far. Under this phase, the ministry also plans to develop 27 high speed expressways and access-controlled corridors of about 10,000 km length, at a total capital cost of Rs 4.5 lakh crore. As of July 2023, projects of 7,200 km length have been awarded and construction completed for 3,200 km. MoRTH’s average annual expenditure has increased six times, from Rs 51,204 crore in 2013-14 to Rs 3.13 lakh crore in 2023-24.
What steps are being taken to promote sustainable and green practices?
MoRTH has taken several initiatives to promote the use of state-of-the-art and green technology. These include the use of waste materials, by-products and organic materials such as fly ash, slag, crumb rubber, modified bitumen, waste plastic, recycled aggregates, geosynthetics, jute and coir, and processes such as recycling, cement treated sub-base/base and soil stabilisation. The Border Roads Organisation has carried out trials for using shredded plastic in bituminous road construction in India and Bhutan. It has used the technology for resurfacing the 4.5 km Phuentsholing-Thimphu road under Project Dantak in Bhutan, on the 2.5 km Balipara-Charduar-Tawang road under Project Vartak, on the 1 km Roing-Koronu-Paya road under Project Udayak in Arunachal Pradesh, on the 5.22 km Hnathial-Sangau-Saiha road under Project Pushpak in Mizoram, and on the 2 km Hapoli-Sarli-Huri road under Project Arunank in Arunachal Pradesh.
The National Highways Authority of India (NHAI) has started trials for the possible use of steel slag in road construction. A 1 km long trial patch is being constructed on the Panvel-Indapur section of NH-66 near Mumbai, wherein 100 per cent natural aggregates are being replaced by steel slag-derived aggregates. Besides, MoRTH promulgated the Green Highways policy in 2015, under which NHAI has planted over 3.7 crore saplings and successfully transplanted over 68,000 trees.
Other notable initiatives include the use of 2 million tonnes of plastic garbage sourced from the Ghazipur landfill under the Urban Extension Road project. Also, the base of the Ahmedabad-Dholera Expressway will be prepared using 2 million metric tonnes of solid waste generated in the Ahmedabad Municipal Corporation limits and 2.5 million metric tonnes of ash produced by thermal power plants around the city.
What measures are being taken to enhance road safety?
Electronic detailed accident reports have been rolled out in 36 states/UTs for recording accidents real-time. As of July 2023, 842,452 accidents have been registered. Permanent rectification measures have been carried out to eliminate 4,504 out of 5,803 identified blackspots. Road safety audits have been mandated at all stages of the highway life cycle – DPR/design, construction, pre-opening and post-opening/ O&M. So far, audits have been conducted for 92,000 km of national highway network (63 per cent of the total network). Advanced traffic management systems have been implemented on 3,200 km of national highway network. Over 800 work orders have been issued to NGOs for road safety awareness campaigns. MoRTH has also launched the Bharat NCAP programme to promote the sale of safer cars. Ratings, from one to five, will be assigned to vehicles after evaluating them on three parameters: adult occupant protection, child occupant protection and safety assist technologies.
What steps are being taken to enhance private sector involvement?
India has a well-developed framework for PPP in the highway sector. Several incentives have been announced to attract private sector participation and foreign direct investment (FDI), such as allowing 100 per cent FDI in roads and highways under the automatic route, viability gap funding, 100 per cent tax exemption in any consecutive 10 years out of 20 years after project commissioning, and duty-free import of high capacity and modern road construction equipment.
In 2016, the hybrid annuity model (HAM) was approved to increase the pace of national highway awards and construction by de-risking developers and lenders from the inherent shortcomings associated with the conventional toll and annuity-based models. MoRTH has also been actively promoting the monetisation of existing road assets through toll-operate-transfer (TOT) and infrastructure investment trusts (InvITs). The programme has witnessed the generation of over Rs 70,000 crore through innovative financing models – about Rs 26,000 crore has been raised via TOT, Rs 10,000 crore via the NHAI InvIT and Rs 34,000 crore via securitisation through SPVs.
To promote PPPs, it is important to have balanced sharing of traffic risk with the concessionaires at the O&M stage. A risk of +/- 5 per cent is to be borne by the concessionaire, with any additional variation being tackled through amendments during the concession period, with a cap of 20 per cent. Steps should also be taken to allow 100 per cent exit from a project at the O&M stage.
What initiatives have been taken to resolve some of the sector’s challenges?
For project awards, the technical and financial eligibility criteria have been refined. The value of previous works has been reduced from 200 per cent to 100 per cent of the total project cost, the turnover criteria have been reduced from 20 per cent to 15 per cent, and the value of a single work has been reduced from 25 per cent to 20 per cent. Moreover, project package sizes have been optimised with the average size being reduced from 55 km before 2016-17 to 30 km. The average number of bidders has gone up from 5-7 in 2019-20 to 13-17 in 2021-22. The average discount on EPC projects has increased from 4 per cent prior to 2019-20 to 14 per cent since 2020-21. Meanwhile, payment reforms include the institution of construction-linked monthly payments for improved cashflows for contractors and incentives for early completion; a reduction in performance security from 5-10 per cent to 3 per cent of the value of the contract; fast-tracking of dispute resolution processes; and descoping of works in sections with land acquisition and clearance issues.
What are MoRTH’s near-term priorities?
- Network improvement: During 2023-24, MoRTH plans to award 13,290 km and construct 13,185 km of NH, of which 8,126 km will be awarded and 5,145 km will be constructed under the Bharatmala Pariyojana. It also plans to award 240 wayside amenities, 27 ropeway projects and 6 MMLPs during the year.
- Asset monetisation: MoRTH plans to raise Rs 35,000 crore through asset monetisation in 2023-24, including Rs 10,000 crore through InvITs, Rs 10,000 crore through TOT, and Rs 15,000 crore through project-based financing for other flagship corridors such as the Delhi-Amritsar-Katra Expressway, the Raipur Visakhapatnam Economic Corridor, the Bengaluru-Chennai Expressway and the Amritsar-Bathinda-Jamnagar corridor.
- Toll collection efficiency improvement: It aims to reduce the maximum wait time at toll plazas to less than a minute and transition to barrier-less tolling solutions through automated number plate recognition and global navigation satellite systems.
- Improvement in public transport convenience: The measures include 100 per cent digital payments for all modes of public transport, permanent rectification of all blackspots during 2023-24, and construction of 125 road over/underbridges for interference-free crossings with railway lines.
“MoRTH plans to raise Rs 35,000 crore through asset monetisation in 2023-24.”
What are the key trends that will shape the road sector in the future?
Some of the key trends and focus areas will be satellite-based tolling to monitor vehicle movement and calculate toll charges, eliminating the need for physical toll plazas; the adoption of digital tools and technologies for O&M to tackle escalating traffic volumes; road safety measures. There will also be a growing focus on environment-friendly road construction and maintenance practices such as utilising recycled materials, implementing eco-friendly technologies and minimising the carbon footprint of road projects. Finally, the emergence of connected and autonomous vehicles will necessitate the development of appropriate infrastructure, regulations and policies.