National Highways Development Project: An Overview


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LOK SABHA SECRETARIAT
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REFERENCE NOTE .
No. 23 /RN/Ref./August/2013

For the use of Members of Parliament

Not for Publication

National Highways Development Project: An Overview

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The reference material is for personal use of the Members in the discharge of their Parliamentary duties, and is not for publication. This Service is not to be quoted as the source of the information as it is based on the sources indicated at the end/in the text. This Service does not accept any responsibility for the accuracy or veracity of the information or views contained in the note/collection.

National Highways Development Project: An Overview
INTRODUCTION
Road network provides the arterial network to facilitate trade, transport, social integration and economic development. It facilitates specialization, extension of markets and exploitation of economies of scale. It is used for the smooth conveyance of both people and goods. Transportation by road has the advantage over other means of transport because of its easy accessibility, flexibility of operations, door-to-door service and reliability. Consequently, passenger and freight movement in India over the years have increasingly shifted towards roads vis-à-vis other means of transport.
The total road length in India increased more than 11 times during the 60 years between 1951 and 2011. From 3.99 lakh kilometer as on 31 March 1951, the road length increased to 46.90 lakh kilometers as on 31 March 2011. Concomitantly, the surfaced road length increased both in absolute and relative terms. The length of sufaced roads which was 1.57 lakh kilometers (39.35 per cent of total road length) as on 31 March 1951 increased to 25.25 lakh kilometers (53.83 per cent of total road length) as on 31 March 2011 as shown in the diagram below1:
Total and Surface Road Length in India: 1951-2011
1 India. Ministry of Road Transport and Highways, Basic Road Statistics of India, 2008-09, 2009-10 and 2010-11, August 2012, p. (i)

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The road network of 46.90 lakh km. has road density of 1.43 km per square km2. It consists of National Highways, Expressways, State Highways, Major Districts Roads, other Districts Roads and Village Roads with the following length distribution3:-

National Highways / Expressway State Highways Other Roads

79,116 km 1,55,716 km 44,55,010 km

National Highways in terms of width is as under:

Single Lane/Intermediate Lane Double Lane Four Lane/Six Lane/Eight Lane

19,330 km (24%) 40,658 km (52%) 19,128 km (24%)

(Source: Ministry of Road Transport and Highways, Annual Report, 2012-13, p. 7)
In India, Road infrastructure is used to transport over 60 per cent of total goods and 85 per cent of total passenger traffic. The Ministry of Road Transport and Highways encompasses within its fold Road Transport and Highways which includes construction and maintenance of National Highways (NHs), administration of Motor Vehicle Rules 1989, formulation of broad policies relating to road transport, environmental issues, automotive norms, fixation of user fee rate for use of National Highways etc. besides making arrangements for movements of vehicular traffic with neighbouring countries4.

NATIONAL HIGHWAYS AUTHORITY OF INDIA (NHAI) - ESTABLISHMENT
"The National Highways Authority of India was constituted by an act of Parliament, viz. the National Highways Authority of India Act, 1988.5 " It is entrusted with the responsibility of implementing a greatly expanded National Highways

2 epaper.timesofindia.com dated 2.7.2013, by Dhananjay Mahapatra, NDA put NHs on fast track 3 India. Ministry of Road Transport and Highways, Annual Report 2012-13, p. 7 4 Ibid, p. 7 5. lbid, p.8

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Development Project (NHDP) spread over seven phases with an estimated expenditure of Rs.4,71,975 crores6 and envisages the improvement of more than about 54,500 km of arterial routes of National Highways network to international standards7
NATIONAL HIGHWAYS DEVELOPMENT PROJECT (NHDP)  NHDP's prime focus is on developing International standard roads with facilities for uninterrupted flow of traffic with : 8  Enhanced Safety Features  Better Riding Surface.  Better Road Geometry  Better Traffic Management and Noticeable Signage.  Divided Carriageways and Service Roads  Grade Separators  Over Bridges and Underpasses  Bypasses  Wayside Amenities
Advantages of having a well developed network of world class highways, for a nation like India - poised to surge ahead are: 9
 Savings in vehicle operating costs  Faster, comfortable journeys  Reduced fuel consumption  Safer travel  Benefits to trade especially in movement of perishable material  Reduced maintenance costs  Safer travel  All round development of areas
Components of NHDP The Government of India has launched major initiatives to upgrade and
strengthen National Highways through seven phases of National Highways Development Project (NHDP), the main components of NHDP are as under10 :
6 Ibid, p. 14 7 India. Ministry of Road Transport and Highways, Outcome Budget 2013-14, p. 1 8 http://www.nhai.org 9 Ibid 10 op.cit., Annual Report 2012-13, pp. 17-18

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NHDP Phase – I and II
NHDP Phase I and II Comprises of the development of National Highways to 4/6 lane standards of the following routes;
(a) Golden Quadrilateral (GQ) connecting 4 major metropolitan cities viz. DelhiMumbai-Chennai-Kolkata-Delhi
(b) North South and East West Corridors (NS-EW) connecting Srinagar to Kanyakumari and Silchar to Porbandar with a spur from Salem to Cochin.
(c) Road connectivity of major ports of the country to National Highways.
(d) Other National Highway stretches
NHDP Phase I which was approved by Cabinet Committee on Economic Affairs (CCEA) in December 2000 at an estimated cost of Rs.30,300 crore (1999 prices) comprises 5,846 km of Golden Quadrilateral, 981 km of NS-EW corridors, 380 km of Port Connectivity and 315 km of other National Highways, a total of 7,522 km. During the year 2012-13, 22.39 km was completed upto December 2012.
NHDP Phase II which was approved in December 2003 at an estimated cost of Rs.34,339 crore (2002 prices) comprises mostly NS-EW Corridor (6,161 km) and other National Highways of 486 km length, the total length being 6,647 km. during the year 2012-13, 44.07 km was completed upto December 201211.
NHDP Phase-III
The Government has approved 4/6 laning of 12,109 km of National Highways on Build, Operate and Transfer (BOT) basis at an estimated cost of Rs.80,626 crore under NHDP-III. The phase has been approved in two parts i.e. Phase-III A consisting total length of 4,815 km at an approved cost of Rs.33,069 crore and Phase-III B, consisting total length of 7,294 km at an approved cost of Rs.47,557 crore. The scheduled date of completion of NHDP Phase-III is December 2013. Under this phase, the stretches have been identified as per the following criteria:
i) High density traffic corridors not included in Phase I & II
11 Ibid, p. 17

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ii) Providing connectivity of state capitals with NHDP (Phase I &II) iii) Connectivity of centers of tourism and places of economic importance Against 12,109 km, a length of 4602 km has already been four laned up to 31 December 2012 and a length of 5734 km is under implementation. During the year 2012-13, 958.99 km has been completed upto December 201212.
NHDP Phase-IV This Phase envisages upgradation of about 20,000 km of National Highways to
2-lane with paved shoulders on Public Private Partnership (PPP) basis. Till December 2012, a length of 62 km has already been four/two laned and a length of 4320 km is under implementation13.
NHDP Phase- V Six laning of 6,500 km of existing 4 lane National Highways under NHDP
Phase-V on Design – Build – Finance – Operate basis (DBFO) has been approved in October 2006 at an estimated cost of Rs.41,210 crore (at 2006 prices). Six laning of 6,500 km includes 5,700 km of GQ and 800 km of other stretches. Against 6500 km, a length of 1276 km has already been six laned up to 31 December 2012 and a length of 2804 km is under implementation. During the year 2012-13, 365.86 km has been completed upto December 201214.
NHDP Phase- VI NHDP PHASE- VI envisages development of 1,000 km fully access controlled
expressways under Public Private Partnership (PPP) model following DBFO approach. The Phase VI of NHDP has been approved at an estimated cost of Rs.16,680 crore in November 2006 (at 2006 prices).
The total fund required for this phase is Rs.16,680 crore, out of which Rs.9,000 crore will come from private sector and the balance Rs.7,680 crore will be Government
12 Ibid 13 Ibid, p. 18 14 Ibid

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funding for bridging the viability gap as well as meeting the cost of land acquisition, utility shifting, consultancy, etc15.
NHDP Phase- VII
The Government has approved construction of stand alone Ring Roads, Bypasses, Grade Separators, Flyovers, Elevated Roads, Tunnels, Road Over-bridges, Underpasses, Service Roads etc. on BOT (Toll) mode under NHDP Phase VII in December 2007 at an estimated cost of Rs.16,680 crore (at 2007 prices). 36 stretches in different States have been identified under NHDP Phase-VII16.
The project-wise details of all the Phases of NHDP and other NHAI Projects are given at Annexure-I and State-wise distribution of National Highways are given at the Annexure-II.
National Highways Development Project is being implemented in all Phases except Phase VI (Expressways) at present. The present phases are aimed at improving more than 49,260 km of arterial routes of NH Network to international standards17.
For expressways, the Government of India has not yet been able to identify a suitable funding model for the projects, while the cost of building expressways has escalated significantly over the years. At present, many experts estimate the cost of constructing expressways to be Rs. 500-800 million per km, as against Rs. 200 million per km estimated by NHAI in 2010. As arranging the funds required to build expressways is a challenge for the Government, it has envisaged developing these projects on a Public-Private Partnership basis and is mulling alternative financial models. Besides, the ministry came up with a project report to formulate a master plan aimed at constructing 15,600 km by 2022, marking the end of the Thirteenth Five-Year Plan.18
15 Ibid 16 Ibid, p. 18 17 http://www.nhai.org 18 The Hindu Business Line dated 15.7.2013, by Abhaya Agarwal, Is India ready to drive on the expressway?

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Major schemes under National Highway (Original) – NH (O) include Special programme for improvement of NHs to 2-lane standards following Corridor Development Approach, National Highway Interconnectivity Improvement Programme(NHIIP) under the proposed World Bank Loan Assistance, Private Sector Investment for Development of Non-NHDP National Highways, 4-Laning Projects under JBIC Loan Assistance, Maintenance of Balance 17,500 km of NHs not covered under any of the above.19

The stretch of NH-34 from Kolkata to Dalkhola has developed some distresses including potholes in isolated stretches due to inadequate existing pavement crust and heavy traffic plying through this NH. The stretch has been awarded for 4-laning on BOT (Toll) / (Annuity) basis. An amount of Rs. 50.00 crore had been allocated during 201112 by this Ministry for maintenance of the existing carriageway in traffic worthy conditions.20

TARGETS ACHIEVED BY NATIONAL HIGHWAYS AUTHORITY OF INDIA

The targeted and completed length under various schemes including Special

Accelerated Road Development Programme for North Eastern region (SARDP-NE) and

Left Wing Extremism (LWE) affected areas, since 2009-10 are as under:

Year
2009-10 2010-11 2011-12 2012-13

Target
5830 5534 5824 6092

Achievement
5145 4439 5013 5726*

Length

(in kms) constructed per
day
14.10 12.16 13.73 15.69*

(Source: Rajya Sabha Unstarred Question No. 3962 dated 02.05.2013)

Prime Minister, Dr. Manmohan Singh has already expressed concern over the tardy progress as the UPA Government in 2009 unveiled its ambitious target of building 35000 kms of highways in five years at the rate of 20 kms daily21.

19 www.pib.nic.in dated 20.2.2013. 20 Lok Sabha Unstarred Question no. 6104 dated 14.5.2012 21 The Pioneer, New Delhi, dated 4.2.2013, by Deepak Kumar Jha, ‗Highway Hit All Time Low‘

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The pace of progress of development of NHs has slowed down due to various problems, such as, delay in land acquisition, shifting of utilities, environmental and forest clearances, approval for rail over bridges as well as shortage of skilled / semiskilled manpower and the economic slowdown. In order to expedite implementation of the projects, Regional Offices (ROs), headed by Chief General Manager (CGM) have been set up by the National Highways Authority of India (NHAI). Powers have been delegated to the CGMs for expediting forest / environmental clearances and monitor land acquisition matters as well as implementation of projects. Special Land Acquisition units have also been set up to expedite land acquisition. The Chief Secretaries of State Governments have been nominated as Nodal Officers to expedite highway projects. Projects are also closely and periodically reviewed at Headquarters as well as field units22.

Expansion during Five-Year Plans

Plan-wise addition to NH Network

Period As on 01-04-1947

Length added (km.)

Pre First Plan (1947-1951

815

First Plan (1951-1956)

Second Plan(1956-1961)

1,514

Third Plan (1961-1966)

179

Interregnum Period(Rolling Plan) 1966-1969

52

Fourth Plan (1969-1974)

4819

Fifth Plan (1974-1979)

220

Interregnum Period(Rolling Plan (1979-1980

46

Sixth Plan (1980-1985)

2957

Seventh Plan (1985-1990)

1632

Interregnum Period (Rolling Plan Period)

77

(1990-1992)

Eighth Plan (1992-1997)

609

Ninth Plan (1997-2002)

23814

Total length (km.) 21,378 22,193 22193 23,707 23,886 23938 28757 28977 29023 31980 33612 33689
34298 58112

22 Lok Sabha Unstarred Question no.1106 dated 4.3.2013

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Tenth Plan (2002-2007)

9008*

Eleventh Plan (2007-2012)

10228

* 530 km length of National Highways of Madhya Pradesh has been de-notified

66590 76818

(Source: Ministry of Road Transport and Highways, Basic Road Statistics of India, 2008-09, 2009-10 and 2010-11, August 2012, p. vii.)

FINANCING OF NHDP PROJECTS

The NHAI is implementing the National Highway Development Programme (NHDP) and some other allied projects in accordance with the mandate approved by the Government. The development and maintenance of National Highways are financed by the following modes23:

a) Government of India‘s Gross Budgetary Support (GBS) and Additional Budgetary Support (ABS)
b) Dedicated accruals under the Central Road Fund (share in the levy of cess on fuel) allocated through Union Budget.
c) External Assistance in respect of International Institutions (World Bank; ADB; JBIC) funded projects allocated through Union Budget.
d) Ploughing back of toll revenue including toll collection, negative grant, premium and revenue share deposited by NHAI into Consolidated Fund of India and in turn equivalent amount released to NHAI for development, maintenance and management of National Highways entrusted to it.
e) Private financing under PPP frameworks (i) Build Operate and Transfer (BOT)-Toll/Design Build Finance Operate and Transfer (DBFOT)-Investment by private agencies and return through levy and retention of user fee;
(ii) BOT (Annuity)-Investment by private agencies and return through semiannual pre-determined payments from NHAI as per bid; and
(iii) Special Purpose Vehicle (SPV)-with equity participation by NHAI

23 India. Rajya Sabha, Department Related Parliament Standing Committee on Transport Tourism and Culture, 193rd Report of Ministry of Road Transport and Highways (DFG).
May 2013

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National Highways Development Project: An Overview