ROADS AND HIGHWAYS

  • Expand all
SUMMARY
  • India has the second largest road network in the world. It measures 58,97,671 km. 1
  • The National Highways/ Expressways measure 1,32,500 km and State Highways measure 1,56,694 km as on 31st March 2019. 2
  • The implementation agencies of the Ministry of Road Transport and Highways include: 3
    • National Highways Authority of India
    • State/Union Territories Public Works Departments
    • National Highway and Infrastructure Development Corporation Limited
    • Border Roads Organization
    • Indian Academy of Highway Engineers (IAHE)
  • Historically, investments in the transport sector have been made by the Government. However, to increase private sector participation, the Ministry has laid down comprehensive policy guidelines for private sector participation in the development of National Highways. 4
REASONS TO INVEST
  • The Government offers various incentives to attract Private Investment and Foreign Direct Investment in the roads and highways sector.
    • The Government bears the following costs:
      • Project Feasibility Study
      • Land for the right of way and wayside amenities
      • Shifting of utilities
      • Environment clearance, cutting of trees, etc.
      • Subsidy up to 40 % of the project cost to make project viable
      • 100% tax exemption in any consecutive 10 years out of 20 years after commissioning of the project
      • Duty-free import of high capacity and modern road construction equipment
  • About US$ 1.4 Tn will be invested on infrastructure in India from 2020 to 2025. The National Infrastructure Pipeline (NIP) set up by the government unveils the infrastructure projects across various states which will receive this funding. To build domestic capacity and enhance execution by private sector participants, NIP promotes collaborations and joint ventures with strong global infrastructure developers. Roads and Highways will receive total funding of about US$ 26.9 Bn under the NIP projects. About 39 of these projects are proposed to be implemented by the private sector. 5
  • The Government of India is in the process of implementing various roads and highway projects. Some of the projects that have been implemented/are being implemented are as follows: 6
    • Bharatmala Pariyojana: The Bharatmala Pariyojana is the country’s largest ever highways development programme. It aims to optimize the efficiency of road traffic movement across the country by bridging critical infrastructure gaps. Multi-nodal integration is one of the key focuses of this programme. “Bharatmala Pariyojana Phase-I” has been approved by the Cabinet Committee on Economic Affairs for construction/ up-gradation of National Highways of 34,800 km length over a period of 5 years (2017-18 to 2021-22) at a cost of about US$ 71.33 Bn.
    • Setu Bharatam: The Ministry of Road Transport and Highways has envisaged a plan for replacement of Level Crossings on National Highways by ROBs/ RUBs under a scheme, Setu Bharatam. About 174 ROBs/ RUBs which are to be constructed under this scheme to ensure safe and smooth flow of traffic.
    • Highways Projects in the North-East: Projects worth US$ 25.33 Bn have been sanctioned for the construction of roads for over 12,000 km in the North East region.
    • Components under Bharatmala Phase 1 are: 7
      • Economic Corridors Development: Length - 9,000 km Investment Outlay: $17.2 Bn
      • Inter-corridor and feeder roads - Length: 6,000 km Investment Outlay: $11.4 Bn
      • National Corridors Efficiency Improvements Length - 5,000 km Investment Outlay: $14.3 Bn
      • Border and International Connectivity Roads: Length - 2,000 km Investment Outlay: $3.6 Bn
      • Coastal and Port Connectivity Roads Length - 2,000 km Investment Outlay: $2.9 Bn
      • Expressways Length: 800 km Investment Outlay - $5.7 Bn
  • The government has taken many e-initiatives such as Bhoomi Rashi Porta, Enterprise Resource Planning (ERP) Project eDISHA, Project Monitoring Information System (PMIS), INAM-Pro+, Electronic Toll Collection (ETC) to simplify the processes in the roads and highways sector and bring transparency to it.
STATISTICS
  • 10,855 km of National Highways have been constructed in 2018-19, as against 9,829 km during 2017-18. 8
  • The number of road accidents has fallen from 480,652 in 2016 to 464,910 in 2017.9 
  • The number of fatalities has fallen from 150,785 to 147,913.10
  • More than 52,000 km length of road projects, costing more than US$ 77.33 Bn are in progress as of March 2019.11
  • Under the Setu Bharatam scheme, out of the 174 ROBs/RUBs which are to be constructed, 91 have been sanctioned with an estimated cost of US$ 947.30 Mn. 12
  • With the introduction of Electronic Toll Collection (ETC) system, banks have collectively issued 45.55 lakh FASTags with 8.66 lakhs average daily ETC transaction as on 31st March 2019. 12
FDI POLICY
  • 100% Foreign Direct Investment (FDI) is allowed under the automatic route in the road and highways sector, subject to applicable laws and regulation. 13
SECTOR POLICY
  • Development and maintenance of road infrastructure is a key Government priority, the sector has received strong budgetary support over the years.
  • Standardised processes for PPP and public funded projects and a clear policy framework relating to bidding and tolling have been developed over the years.
  • Major policy initiatives undertaken by the Ministry of Road Transport and Highways (MoRTH) are:
    • Provision of funds to the State Government for development of state roads as per the Central Road Fund Act 2000, amended by Finance Act from time to time.
    • Introduction of Electronic Toll Collection System, FASTag by MoRTH. 
    • Implementation of Value Engineering Programme in 2017 to promote use of new technologies, materials and equipment in highway projects executed either under PPP or public funding mode.
    • Automation of Regional Transport Offices under Transportation Mission Mode Project. It envisages creation of a consolidated transport database. The two flagship applications under the project are VAHAN (Vehicle Registration, Taxation, Permit, Fitness and associated services) and SARATHI (Driving License, Learner License, Driving Schools and related activities).
    • To fast track approval process, enhanced powers to NHAI, specifically for EPC (Engineering, Procurement and Construction) and PPP (Build-Operate-Transfer) projects where no Viability Gap Funding is involved.
    • Project Monitoring Information System introduced by NHAI for tracking the status of all projects, preparation of reports and online upload of important project documents like DPRs and contract documents, etc.
FINANCIAL SUPPORT

Pradhan Mantri Gram Sadak Yojana

The Government of India launched the Pradhan Mantri Gram Sadak Yojana (PMGSY) with an aim to provide connectivity to unconnected habitations as part of a poverty reduction strategy.14

About US$ 2.6 Bn has been allocated to Pradhan Mantri Gram Sadak Yojna in the Union Budget 2020-21.15

 

Key Highlights of the Union Budget 2020-21

  • The union budget allocation towards the Ministry of Road Transport and Highways is US$ 12.24 Bn.16

The revenue expenditure stands at US$ 1.26 Bn and the capital expenditure stands at US$ 10.93 Bn.17

  • The total budget allocation towards the National Highways Authority of India stands at US$ 5.67 Bn.18
INVESTMENT OPPORTUNITIES

The investment opportunities in the sector include:

  • Vadodara-Mumbai Expressway: A road length of 360 km through Kim, Talasari, Vasai and Thane to be developed. Work has already been awarded for a stretch of 124 km for Vadodara-Kim sector and bids invited for 151 km between Kim and Talasari. 19
  • Multi-modal logistic parks: 35 Multinodal Logistics Parks have been identified for development in Phase-1 of Bharatmala Pariyojana. 20
  • Toll-Operate-Transfer Model: The Ministry is monetizing road assets constructed using public funds by way of the Toll-Operate-Transfer (ToT) scheme. The scheme proposes bidding of bundled national highways for a concession period of 30 years. 21
FOREIGN INVESTORS
  • CIDBI Malaysia (Malaysia)
  • ERA-SIBMOST (Russia)
  • Essel Infra & CR-18 Consortium (China)
  • Gamuda Malaysia 0 WCT Malaysia (Malaysia)
  • GMR-Tuni-Ankapalli Express Ltd (Malaysia)
  • Hindustan Construction Company Ltd-Laing Sadbhav Consortium (UK)
SOURCES
  1. “Ministry of Road Transport and Highways”, Annual Report 2018-19, https://morth.nic.in/sites/default/files/Annual_Report_English_2018-19.pdf
  2. “Ministry of Road Transport and Highways”, Annual Report 2018-19, https://morth.nic.in/sites/default/files/Annual_Report_English_2018-19.pdf
  3. “Ministry of Road Transport and Highways”, Annual Report 2018-19, https://morth.nic.in/sites/default/files/Annual_Report_English_2018-19.pdf
  4. “Ministry of Road Transport and Highways”, Annual Report 2018-19, https://morth.nic.in/sites/default/files/Annual_Report_English_2018-19.pdf
  5. National Infrastructure Pipeline, Report of the Task Force, Department of Economic Affairs Ministry of Finance, http://164.100.117.97/WriteReadData/userfiles/DEA%20IPF%20NIP%20Report%20Vol%201.pdf
  6. “Ministry of Road Transport and Highways”, Annual Report 2018-19, https://morth.nic.in/sites/default/files/Annual_Report_English_2018-19.pdf
  7. “Ministry of Road Transport and Highways”, Annual Report 2018-19, https://morth.nic.in/sites/default/files/Annual_Report_English_2018-19.pdf
  8. “Ministry of Road Transport and Highways”, Annual Report 2018-19, https://morth.nic.in/sites/default/files/Annual_Report_English_2018-19.pdf
  9. “Ministry of Road Transport and Highways”, Annual Report 2018-19, https://morth.nic.in/sites/default/files/Annual_Report_English_2018-19.pdf
  10. “Ministry of Road Transport and Highways”, Annual Report 2018-19, https://morth.nic.in/sites/default/files/Annual_Report_English_2018-19.pdf
  11. “Ministry of Road Transport and Highways”, Annual Report 2018-19, https://morth.nic.in/sites/default/files/Annual_Report_English_2018-19.pdf
  12. “Ministry of Road Transport and Highways”, Annual Report 2018-19, https://morth.nic.in/sites/default/files/Annual_Report_English_2018-19.pdf
  13. Consolidated FDI Policy, https://invest-india-revamp-static-files.s3.ap-south-1.amazonaws.com/2020-04/FDI%20Policy%202019%20revised_19%20April%202020.pdf
  14. Pradhan Mantri Gram Sadak Yojana, Online Management, Monitoring and Accounting System (OMMAS), http://omms.nic.in/
  15. Expenditure Profile (Centrally Sponsored Schemes), India Budget website, https://www.indiabudget.gov.in/doc/eb/stat4a.pdf
  16. Budget Highlights (Key Features), India Budget website, https://www.indiabudget.gov.in/doc/bh1.pdf
  17. Expenditure Profile (Expenditure of Ministries and Departments), India Budget website, https://www.indiabudget.gov.in/doc/eb/stat3a.pdf
  18. Expenditure Profile (Central Sector Schemes), India Budget website, https://www.indiabudget.gov.in/doc/eb/stat4b.pdf
  19. Annual Report 2018-19, Ministry of Road Transport and Highways,  https://morth.nic.in/sites/default/files/Annual_Report_English_2018-19.pdf
  20. Annual Report 2018-19, Ministry of Road Transport and Highways,  https://morth.nic.in/sites/default/files/Annual_Report_English_2018-19.pdf
  21. Annual Report 2018-19, Ministry of Road Transport and Highways,  https://morth.nic.in/sites/default/files/Annual_Report_English_2018-19.pdf
HAVE A QUERY? CONNECT WITH US
  • Print