The Centre has revised the format for consultations on national highway projects. The move that is aimed at offering comprehensive operational estimates so that road assets under Gati Shakti can be better monetised.

As per the revised standard operating procedure (SoP) and consultation format, national highway (NH) project proposals should now include operational assessment on aspects such as estimated traffic and how it will lead to reduced logistics costs. Furthermore, the proposals should also include details on how the project will boost economic activity and aid in better connectivity.

Format revision

In an official communique last month, the Ministry of Road Transport and Highways (MoRTH) informed about the revised SoP and format for submission of proposals for consultation on NH projects in the network planning group (NPG).

The NPG is a group of officials from ministries and departments related to infrastructure and is tasked with unified planning and integration of proposals. It also assists the empowered group of secretaries (EGoS) on the Gati Shakti National Master Plan (NMP).

As part of the Gati Shakti NMP, MoRTH plans to develop 22 greenfield expressways, 23 key infrastructure and other highway projects and 35 multi-modal logistics parks.

For projects submitted subsequently by ministries, it should include advantages which the project will accrue to industries and economic activities in the region. The ministry/department should explain how the project will contribute to multi-modal connectivity, connect manufacturing and economic zones to infrastructural connectivity. Compliance to the Gati Shakti concept is critical and accordingly it is required to justify the Gati Shakti concept fulfilment, the communique said. The proposals should include information on the types of commodities and their estimated quantity that is likely to be generated from economic zones, clusters or ports.

“Analytical substantiation of reduced logistics cost, estimated traffic likely to be induced along with probable traffic distribution and its impact on NH corridors (on corridors being discussed in NPG and other adjacent NH corridors) also needs to be included,” it added.

The ministry has emphasised on including such details in project reports of NH proposals by detailed project report (DPR) consultants. Besides, the consultants may be requested to provide these details for projects on which DPRs have been prepared and will be presented to the NPG for consultations.

Inducing growth

Welcoming the development, Jagannarayan Padmanabhan, Director and Practice Leader, Crisil Market Intelligence and Analytics, pointed out that around 85 per cent of toll revenue is contributed by the freight segment on national highways. By providing granular information on the type of commodity and economic impact that NH will have, the confidence of investors on the stretch and bid goes up manifold.

“Whenever a transportation linkage gets established, it always results in induced growth to the economy through which it passes. Calling this out at the time of project implementation gives more clarity and the indirect and allied infra and industries can also be planned in advance,” he added.

For instance, Padmanabhan says, if there is an expectation that warehousing can get a boost because of NH connectivity getting established, it can then lead to development of other support services in the area like third party logistics providers, freight forwarding and clearing house agents.

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