Highway Development Plan has the Potential to Add 3% to GDP
Nitin Gadkari, Road Transport and Highways Minister
Oct 27, 2017 | Source: Economic Times
Is the construction industry equipped to undertake this enormous task? In last three years, I have already awarded works worth Rs 6 lakh crore in the road transport and highways ministry alone. My target is to award highway works worth Rs 15 lakh crore before we complete our five-year term in 2019. Today, the heavy equipment industry in this country doesn't have the capacity to provide the quantity that would be required. Construction companies, including cement and equipment companies, would see a 100% growth. I believe through highways sector only, we can add 3% to the nation's GDP.
What does the Bharatmala plan entail? Overall, we plan to build almost 60,000 km under Bharatmala at a cost of Rs 8 lakh crore. In phase one, for which we already have detailed projects ready, we'll build 34,800 km at a Rs 5.35 lakh crore. The remaining cost of 25,200 km would be taken up in phase II. We'll complete the phase I by 2022 and awarding of projects for the same should be done before 2019. After that we'll start awarding the projects under phase II.
The work on the expressways and the economic corridors would be taken up first on priority basis. We'll have around 50 economic corridors with a total length of 9,000 km. Around 550 districts will be linked to national highways as a result of Bharatmala programme against 300 districts at present. We have identified new corridors in a way that it saves 20-25% travel time for all road users. Bharatmala will also have a positive impact on the Logistic Performance Index (LPI) of the country.
Given that current highway construction pace per day has been 23 km per day, what's being done to meet the deadline? The National Highway Authority of India (NHAI) has been empowered to approve all EPC projects. The need of going to cabinet has been waived off for Bharatmala. Since a lot of these projects would be done on the government funding, it will take away the risk of delay in land acquisition and construction. My target would be to do more than 40 km a day.
As per government estimates, highway Rs. 1lakh crore would be projects worth ` taken up on public-private partnership (PPP) under Bharatmala. Will private companies be interested? As we've awarded more projects under engineering procurement and construction (EPC) model, the situation has gradually improved. Under the hybrid annuity model, which is also a PPP model, we have awarded projects worth ` .1 lakh crore in the last two years. So, by executing these projects successfully, companies would have enough confidence and finances available to come forward for BOT.