INDIA GROWTH STORY: India Growth: HITTING THE ROAD EARLY

Friday, May 22, 2009

India Growth: HITTING THE ROAD EARLY

Rs 60,000 cr to go into laying,upkeep of roads

Our Bureau NEW DELHI

THE government plans to spend about Rs 60,000 crore in the next couple of years to construct and upgrade about 40,000 kilometers of roads as part of another economic stimulus package expected to be announced soon.
    The project, which is aimed at boosting growth in the economy that is bogged down by slowing demand, will be executed through public funds, said an official in the ministry of shipping, road transport & highways.
    "The entire project will be awarded on annuity basis so that there is little possibility of any delay in implementation of these projects," he said, requesting anonymity.
    The Manmohan Singh government in its first term had prepared the blueprint of the project, but stopped short of making it public because of the election code of conduct that was in force at the time.
    Highway projects, constructed under various national highway development programme (NHDP) phases, have seen delays due to the highway development agencies' inability to decide the mode of contract, toll or annuity, in the first instance. The National Highways Authority of India (NHAI) managed to award only eight projects in 2008-09 against the target of 60.
    The decision to award these new projects on annuity basis is a departure from the government's earlier policy of constructing most of the highways under public-private-partnership (PPP) model to save public money. But delay in execution of PPP projects is forcing the government to spend public money.
    The NHAI had invited bids for 29 projects last year after revising project cost upwards, but failed to get any response for 18 projects. It received single bids in at least six projects.
    Highways constructed in this phase are expected to be taken up by the surface transport ministry. The two-lane highways will link major highway networks such as the Golden Quadrilateral, East-West and North-South corridors.
    The NHAI is implementing the country's most ambitious highways project under various phases of NHDP. The entire highway project is divided into seven phases. The present phases — I, II and IIIA — envisage improving more than 25,785 km of arterial routes of the national highway network of the country to international standards.
    While NHDP phases I and II comprising the golden quadrilateral was scheduled to be completed by December 2008, NHDP phase IIIA is scheduled for completion by December 2009. Widening of 6,500 km of existing 4-lane highways into six lanes come under NHDP Phase V.
    The government plans to build 1000 km of expressways under NHDP phase VI at an estimated cost of Rs 16,680 crore.