Posted on 10/26/2017 5:17:21 PM PDT by Tolerance Sucks Rocks
In a fillip to India’s highway development programme, the Union cabinet chaired by Prime Minister Narendra Modi on Tuesday approved a plan to build thousands of kilometres of roads and highways over the next five years at a cost of about Rs 7 lakh crore, a spending push that could help generate jobs and lift the economy.
Announcing the Cabinet decision, Union finance minister Arun Jaitley called this public expenditure on infrastructure projects as “unprecedented” and “something which has not happened in the country till date.”
The plan involves constructing 83,677 km of roads, highways, green-field expressways and bridges in phases.
Under the first phase to be completed by 2022, 34,800 km of highways will be built. This will include 24,800 km of the ambitious Bharat Mala programme, at a cost Rs 5.35-lakh crore, announced two years ago, to build highways through economic corridors centred around manufacturing hubs, inter-corridors and feeder routes, border, coastal and port connectivity roads. 1,837 km of greenfield expressways will also be developed under the programme.
Of the 34,800 km stretch, 10,000 km are part of the ongoing National Highway Development Project (NHDP), which was started in 1998 when Atal Bihari Vajpayee was the PM.
The Modi government, like the previous NDA government, has given top priority to the sector that has hit a rough patch since 2007. The government has set an ambitious target of building almost 40 km of roads per day – up from 9km/day just three years ago – this fiscal. Between 2014-15 and 2016-17, the overall allocation to the highways sector has increased by 73 % — from Rs 1.3 lakh crore to Rs 2.25 lakh crore.
Infrastructure experts are happy that the momentum to the sector has continued. Sponsored Video Office Snacks Out Of The Box Sponsored by ZINC
“It’s the best stimulus that the government can come up with. It is heartening that the government is treating the highways as the single biggest stimulus related activity. The sector is highly construction dependent and the biggest multiplier to the economy. It will provide a robust road network resulting in economic spin-off,” said Vinayak Chatterjee, chairman of infrastructure consulting firm Feedback Ventures.
Finance secretary Ashok Lavasa said the government is looking to raise almost half the money from the market and private investments while the rest would come from the Central Road Fund, highway toll and monetising completed highway stretches.
The Centre’s move might be aimed at increasing government spending on creating infrastructure but economists are wary of the state’s capacity to spend.
“My first concern is the government’s ability to give out contracts and build the highway. If the past is an indicator, the state capacity to spend on public investment is limited,” said Ila Patnaik, professor, National Institute of Public Finance and Policy.
But ramping up government spending, at a time when subdued tax collections and sluggish economic growth have strained federal revenues, could widen the fiscal deficit beyond the targeted 3.2% of GDP.
There were signs that the government had little option but to spend its way out of trouble that was exacerbated, in part, by last year’s shock withdrawal of high-value banknotes as well as disruptions following the rollout of the new Goods and Services Tax.
In the last three-and-a-half years, the government has taken a slew of policy initiatives to raise revenue and lure back the private sector to invest in highways sector. With the appetite for public private partnership projects going down, the highways ministry decided to first move to the EPC (engineering procurement contract) model where the government funds the entire project.
According to credit rating firm Crisil, the construction sector was the most labour-dependent among all non-agricultural sectors.
= One lakh crore rupees
= ₹1 lakh crore
...
= Rs 1,000,000,000,000 in Western notation"
https://en.m.wikipedia.org/wiki/Crore
Wonder what a green-field expressway is.
greenfield refers to previously undeveloped sites, so my guess is a greenfield expressway would be one going through undeveloped land or farmland.
1 crore = 10 million
1 lakh = 100,000
I hope they build a few rest stops too, with real toilets.
I dont know, but over the last 20 years Ive seen the Chinese infrastructure grow by leaps and bounds. I dont see pics of chinese hanging on top of buses, hanging all over their trains.
India needs to upgrade their infrastructure big big time
Hell, they probably still using British rail.
Loan me fifty dollars.
Looks like toll roads. Better than nothing, slightly.
They already have a national highway system. It’s true that some of the national highways are 2-lane or even 1-lane roads, but they’re part of the national system.
They typically use tolls on their national highways, even to an extent that demonstrations have broken out about the placement of toll plazas.
By Economic Times Bureau
NEW DELHI: The government on Tuesday approved the biggest highway construction plan so far in the country, to develop approximately 83,677 km of roads at an investment of Rs 6.92 lakh crore by 2022. The highway construction programme is aimed at pushing economic activity and generating at least 14.2 crore man-days across the country over the next five years.
The programme includes the Bharatmala scheme, under which 34,800 km of highways would be constructed at the cost of Rs 5.35 lakh crore, finance secretary Ashok Lavasa said. Under Bharatmala, the road transport and highways ministry will construct 9,000 km of economic corridors across the country.
The project also entails constructing 6,000 km long inter corridor and feeder routes, 2,000 km of border and international connectivity roads, 5,000 km to be upgraded under the national corridor efficiency programme, 800 km of greenfield expressways, 10,000 km under the national highway development programme and 2,000 km of coastal and port connectivity roads.
"The economic corridors would ensure that time taken for transporting goods from manufacturing sectors is reduced," Lavasa said. He said the road transport and highways ministry has already identified new alignment for corridors, which would open new areas for development. "We'll be improving road connectivity in northeast and other border states to facilitate international trade," Lavasa said.
The government will fund Bharatmala project through market borrowings, central road funds, monetising government-owned road assets, and budgetary allocation. "For the highway construction programme, Rs 2.09 lakh will come from market borrowing, Rs 1.06 lakh crore is expected to come through private investment and Rs 2.19 lakh crore will come from the central road fund and through toll operate transfer model," Lavasa said.
In addition to 34,800 km under Bharatmala, National Highways Authority of India (NHAI) will parallel implement the balance works of 48,877 km roads under other current schemes with an outlay of Rs 1.57 lakh crore, Lavasa said. This will be financed by providing Rs 97,000 crore from CRF and Rs 59,000 crore as gross budgetary support.
The government has assigned NHAI, National Highway and Industrial Development Corporation (NHIDCL) and state public work departments for the highway projects. "These organisations would be given sufficient delegation of powers so that there's speedy implementation," Lavasa said.
In additional, central and state governments would spend another Rs 88,185 crore in the next three years towards constructing rural roads under Pradhan Mantri Gram Sadak Yojana. The government has also sanctioned almost Rs 11,000 crore towards the development of roads in states with left wing extremism.
83,000 kilometers
That is a bit more than twice around the entire circumference of the earth.
By Dipak K Dash
NEW DELHI: The government is set to approve the biggest ever highway development plan to develop and expand approximately 83,000 km of roads at an investment of Rs 6.9 lakh crore by 2022 on Tuesday. The proposal on the Cabinet's agenda is aimed at pushing economic activity and generating at least 32 crore man days across the country in the next five years.
The announcement will include the new 28,400 km Bharatmala highway programme connecting border areas, improving international, port and coastal connectivity besides improving highway corridors connecting key economic and commercial hubs besides at least 800 km of expressways. Sources said the focus of the entire plan is to improve speed of traffic flow on key corridors by providing uniform four-lane roads between two identified points. Most of these corridors will be shorter and access-controlled for faster movement of cargo vehicles.
Due to poor road conditions, narrow width and congestion points, a truck in India covers on an average 250-300 km daily in comparison to 700-800 km in developed countries. "The new highway development programme is both building roads and improving mobility to reduce logistic cost. Better road network and rolling out of smart-tag based tolling will transform the road transport sector", said an official privy to the government's plan.
This will perhaps be the biggest government announcement before the upcoming assembly elections. According to the ministry's estimates, construction of 10,000 km of highways annually has the potential of generating four crore mandays and the mega highway development programme can be used to counter the allegation that the government has failed to create employment opportunities.
TOI, on June 27, had first reported about the Public Investment Board (PIB) clearing the proposal and the funding pattern. Considering there is less appetite for private investment, sources said, more than 70% of the works will be through government funding. About one-third of the investment will come from fuel cess, over one-fourth from market borrowing and the rest from budgetary support, private investment and auctioning of completed highways.
National Highways Authority of India(NHAI) has already prepared detailed project reports (DPRs) for about 10,000 km of the identified network, which will help faster roll out of projects.
As reported by TOI early this year, the PIB had approved empowering the NHAI Board, with representatives from ministries and Niti Aayog, to appraise and approve projects up to Rs 2,000 crore instead of taking every project costing more than Rs 1,000 crore to the Cabinet for its approval. "Once the Cabinet approves the umbrella scheme, NHAI will be empowered to clear each project. The same procedure was followed when Atal Bihari Vajpayee government had approved the Golden Quadrilateral development programme for faster roll out of projects," said a source.
Road Transport & Highways Minister Nitin Gadkari in exclusive interview to CNBC-TV18 explains what one should expect over the next few years as part of highway development programme.
By CNBC-TV18
The cabinet yesterday took two big ticket decision, one was recapitalisation of banks and two, was an almost Rs 7 lakh crore push for infrastructure, specifically to the road and highways sector.
Road Transport & Highways Minister Nitin Gadkari in exclusive interview to CNBC-TV18 explains what one should expect over the next few years as part of highway development programme.
He touched upon various issues related to highway developments – the Bharatmala Project, NHAI awards, electric vehicles, road safety etc.
With regards to Bharatmala Project he said it covers about 60,000 kms of which 35,000 kms is part of Phase I. He said they aim to get this project off the ground by December 2018.
Talking about awards by NHAI, he said he is not satisfied with the award target of 6000 kms but expect a target of 10000 kms by March, 2018.
He is also confident of closing the current financial year at 30 km per day and expect to hit 40 km per day by end of next financial year.
He is confident that there would be no problem of raising funds from the market to fund various projects because many pension funds, insurance funds and foreign investors have shown interest.
The Bharatmala Project would be funded via CRF funds, budgetary allocations and monetisatin of projects, he said.
NHAI bonds could be one of way of raising funds, said Gadkari adding that he is confident of raising Rs 5 lakh crore via these bonds because NHAI projects are economically viable and has a AAA rating.
He said further clarity on NHAI bond issue would come in one months' time.
Verbatim transcript of interview in original.
By Megha Manchanda
The first project under Bharatmala is expected to be awarded by the end of next year as the land acquisition process and detailed project reports for the mega infrastructure scheme are underway, Road Transport and Highways Minister Nitin Gadkari said on Wednesday. Gadkari said the government was hopeful that the scheme would elicit a great response from the private sector.
All the projects under Bharatmala would be technically, financially and economically appraised by an empowered project appraisal and technical scrutiny committee under the National Highway Authority of India (NHAI) and the Ministry of Road Transport and Highways, he said. Guidelines for the scrutiny of projects have already been laid down.
He said a “grand challenge” mechanism would be adopted to encourage state government participation for implementing the programme, and the projects supported by states would be taken up on priority.
The minister said the programme was designed to bridge the gaps in the existing highways infrastructure so as to make the movement of man and material more efficient. Special attention, he said, had been paid to fulfil the connectivity needs of backward and tribal areas, areas of economic activity, places of religious and tourist interest, border areas, coastal areas, and trade routes with neighbouring countries.
He said once the scheme was implemented, 70-80 per cent freight would move along the national highways as against the current 40 per cent.
The Union Cabinet on Tuesday cleared the Rs 7-lakh-crore Bharatmala programme to construct 20,000 km of highways connecting western and eastern parts of the country. In the first phase, which will be undertaken for over three to five years, it would cost Rs 5.5 lakh crore. The average cost of constructing one km of road is Rs 13 crore.
Around 24,800 km of roads are being considered in the Phase-I. In addition, the programme would include 10,000 km of balance road works under NHDP, taking the total to 34,800 km at an estimated cost of Rs 5,35,000 crore.
The programme has identified around 26,200 km of economic corridors that have heavy freight traffic, of which 9,000 km is being taken up for development in Phase-I at an estimated cost of Rs 1,20,000 crore.
The gross budgetary support for Bharatmala and the existing schemes from 2017-18 to 2021-22 would be restricted to Rs 2,37,024 crore from Central Road Fund (CRF), Rs 59,973 crore as budgetary support, Rs 34,000 crore from expected monetisation through ToT route, and Rs 46,048 crore collected as Toll-Permanent Bridge Fee Fund (PBFF) by the NHAI. The roads that would be built under Bharatmala would include state highways, national highways, and some state roads.
Bharatmala is the second-largest highways project after the National Highway Development Programme (NHDP) that saw the development of about 50,000 km.
The programme that was mooted in April 2015 aims to connect Gujarat and Rajasthan, then move to Punjab and cover Jammu and Kashmir, Himachal Pradesh, Uttarakhand followed by Uttar Pradesh and Bihar and further to Sikkim, Assam, Arunachal Pradesh, and right up to the Indo-Myanmar border in Manipur and Mizoram.
The aim is to improve the speed of traffic flow on key corridors by providing uniform four-lane roads between two identified points. These corridors will permit faster movement of cargo vehicles. According to government estimates, the construction of 10,000 km of highways annually has the potential of generating four crore man-days of work.
Bharatmala was proposed on the lines of Sagarmala in which a string of ports will be built in the Indian Ocean to protect maritime interests. The government plans to improve road connectivity not just to coastal and border areas but also backward areas.
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