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Friday, April 07, 2000



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Road to prosperity

IN THE NEW millennium, there seems to be a renewed sense of urgency to develop roads and highways. The long-awaited 13,254-km National Highways Development Project, estimated to cost Rs. 54,000 crores, is finally expected to receive the green signal of the Cabinet Committee on Economic Affairs (CCEA). The NHDP comprises four/six-laning of 5,952 km of Golden Quadrilateral connecting the four metros of Delhi, Calcutta, Chennai and Mumbai and 7,293 km of cross-country corridors linking Kashmir and Kanyaku mari (North-South) and Saurashtra and Silchar (East-West).

When the Prime Minister, Mr. Atal Bihari Vajpayee, first mooted the proposal in October 1998 to build six-lane North-South and East-West corridors at a cost of about Rs. 28,000 crores, the idea was viewed with scepticism considering its enormous cost and doubtful commercial viability. However, his subsequent suggestion to merge this dream project with the Golden Quadrilateral plan and the proposal to create a dedicated fund to finance the project made the idea economically and commercially feasible. In the plans now being worked out, precedence is being given to the early completion of four/six-laning of the Golden Quadrilateral considering its high density and revenue-earning potential. Following the Prime Minister's direction to compress the time-fra me for implementation of the entire project, the work programme has been re-done to ensure completion of work on the entire project ahead of schedule. Accordingly, the work on the Golden Quadrilateral is to be completed by March 2003, a year ahead of sch edule, as also the cross-country corridor by March 2008. The CCEA approval is expected to clear the way for finalisation of investment/contracts by March 2002. To ensure the completion of the project one year ahead of the earlier schedule, the National H ighway Authority of India will be given greater financial as well as operational freedom. As for the funding, Rs. 20,000 crores would come from the Re. 1 per litre cess on petrol and diesel, Rs. 20,000 crores as external assistance from multilateral and bilateral funding agencies and the balance from market borrowings and private investors.

Thus, most loose ends have been tied up to smoothen the execution of this ambitious project. Even so, there could still be many ifs and buts, particularly over the external assistance and private investments. The NHAI, which is entrusted with the task of implementing the project, has made only a small beginning so far by awarding 16 sections out of the 21 identified under Phase I of the PM's corridor to private contractors. These 16 sections cover only 220 km and involve a cost of Rs. 669 crores. Under Phase II, some 20 sections are to be awarded involving a total of 370 km. For the remaining more than 6,000 km, the plans can be finalised and work allotted only after prioritisation studies in five phases are completed. Moreover, in the project of this size and magnitude, time and cost overruns cannot be ruled out. The role assigned for the private sector investment in this project is limited; not more than Rs. 6,000 crores is expected. That is a fair estimate, for the experience thus far with private build-operate-transfer projects, has been patchy, at best. There is a realisation that the Government will have to play a major role in road development by raising internal resources and external borrowings. Yet, implementation has been painfully slow. T he whole of last year and the last quarter of 1998 were devoted to finetuning and finalisation of the model concession document for large projects to be undertaken by the NHAI.

It is in this context that the proposed restructuring of the NHAI board assumes significance. The new board will include representatives of the Public Investment Board (PIB), the Finance Ministry, the Department of Planning and Programme Implementation, and the Department of Road Transport and Highways. This is expected to facilitate speedy clearances. All that the Government has to now ensure is that the project does not suffer for want of funds at any stage. For this, it should resist the temptation t o divert the funds generated from the fuel cess to bridge the budgetary deficits.

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