Roads and highways are one of the more likely routes good days will take to come to the country, for every rupee spent here gives a magnified fillip to economic growth and employment. It is no surprise therefore that the Prime Minister has put his might behind it, egging on the transport ministry to plan investments of Rs 1.10 lakh crore this financial year, more than twice the amount last year.
That is expected to create 2.14 billion days of employment, direct and indirect. Besides, according to a Planning Commission study, a 1.2% increase in road traffic adds a whole percentage point to economic growth.
As growth declined during the last years of the UPA, road construction fell to a mere 5 to 6 km a day. The NDA government, since coming to power last May, has managed to raise it to 14. The target is to do 30 km a day in two years.
Allotment of projects is the key to road construction. The internal target this year is to allot 15,000km in projects. Just 1,919km of national highways were awarded in 2012-13 and 3,621 in the following year, UPA’s last. The new government raised it to 8,000 km in 2014-15.
Significantly, only 40% of the planned investments are to come from the government’s budget.
The rest will come from the private sector and markets.
Private sector interest in road projects has perked up because of faster clearances, announcement of big projects like Bharatmala, which seeks to build the missing links in the highway network along the borders and coastlines. The government’s decision to take on the job of building ticklish and expensive patches like railway overbridges – it is building 150 of those under project Setu Bharatam -- eases many pains. There is now a new model for public-private partnership, with the government shelling out 40% of the project cost, and an all-new, benign approach to private developers.
“Everyone talks about the ease of doing business between companies and government. To me, the real change has been in the ease of doing business within the government,” said Rohit Kumar Singh, joint secretary in the ministry of road transport and highways. Singh’s ministry is reviewed by the Prime Minister every month.
Earlier, all projects of more than R500 crore went to the cabinet for approval. Prime Minister Narendra Modi raised this threshold to Rs 1,000 crore. Many road projects eat up more than Rs 500 crore and used to get caught up in approvals. Preparing a cabinet note and its clearance would take up two and a half months even if everything was in order. Within the ministry, they get cleared within a week to 10 days. Road transport and highways minister Nitin Gadkari, in his first 75 days or so, cleared 90 projects that had been stalled for up to a year and a half.
Thirty-seven out of 80 stalled projects have been restructured with their promoter exiting after paying the minimum penalty. In 16, the National Highways Authority of India is putting in the money required to complete them. The authority will be repaid from the toll collected, with interest.
“The previous government was only patiently hearing us out. Execution and getting things notified is where this government has helped. They have helped many stalled projects get a new life,” said a spokesperson for GMR Transportation, which has seven highway projects across India.
PM Modi is behind the quick clearances. Early on in his tenure, he set up a Group on Infrastructure consisting of the ministers of environment, defence, civil aviation, and railways, with Gadkari at its head. These ministries have to agree for a road project to go ahead. In one stroke, all began to come under one roof regularly.