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Published:Tuesday, May 07, 2019 12:09 PM

Bharatmala Initiative – Success So Far

Bharatmala Initiative – Success So Far

After NHDP Program, Ministry introduced India’s biggest road development program under Bharatmala Pariyojna which includes previous NHDP work also. Bharatmala Pariyojna has 6 components of development. Bharatmala is the umbrella program for the highways sector announced in 2017-18 which aims to optimize the capacity of road traffic movement across the country by addressing critical infrastructure gaps.
 
The government’s growing road construction and focused development has transformed into increased budgetary allocations. During FY09 & FY19, the total budgetary allocation for road transport and highways had increased at a CAGR of 20.9%.
 
Through the revived policy support and quick reforms, the Government of India is working on reducing bottlenecks by pushing growth in the infrastructure sector and this trend is clearly visible in the road sector as well. With use of online systems for project monitoring and process automation, the implementation agencies shall ensure the use of online systems of various activities involved in preparation and execution of the projects under Bharatmala Pariyojna.
 
Bharatmala Pariyojna
 
Category
Description
Total Length (km)
Phase I (km)
National Corridors Efficiency Improvement
Lane expansion, de-congestion of existing National Corridors
13,100
5,000
Economic Corridors development
Connection of economically important production & consumption centres; 44 corridors identified
26,200
9,000
Inter-corridor and Feeder routes development
Inter-connection between economic corridors, first mile & last mile connectivity
15,500
6,000
Border and International Connectivity Roads
Connectivity to border areas and boosting trade with neighbouring countries
5,300
2,000
Coastal and Port Connectivity Roads
Connectivity to coastal areas to enable port-led economic development
4,100
2,000
Expressways
Greenfield Expressways
1,900
800
Total
66,100
24,800
 
 
Project Mode
Project Value
Approval Mechanism
EPC Projects
No limit
NHAI Board
PPP Projects
BOT (Toll)
NHAI Board if No VGF required
BOT (Toll) - VGF Required
As per DEA Guidelines
BOT (Annuity/ HAM) Upto Rs. 2000 Cr
  • Appraised by SFC chaired by Secretary, RTH
  • Approved by Hon’ble Minister RTH
BOT (Annuity/ HAM) > Rs. 2000 Cr
  • Appraised by PPPAC
  • Approved by CCEA
 
Proposed Outlay - Bharatmala Pariyojana - Phase I
 
Component
Length (km)
Outlay (Rs. Cr)
Economic Corridor Development
9000
120000
Inter-corridors and Feeder Roads
6000
80000
National Corridor Efficiency Improvement
5000
100000
Border & International Connectivity
2000
25000
Coastal & Port Connectivity
2000
20000
Expressways
800
40000
Sub-total (A)
24800
385000
Balance Road works- NHDP
10000
150000
Sub-total (A+B)
34800
535000
Roads under other existing schemes (LWE, SARDP-NE, NHIIP, Setu Bharatam, Char Dham)
48877
157324
Grand Total
83677
692324
 
Increased Road Construction Levels:
 
In FY19-20 the expenditure on national highways is likely to exceed Rs. 2 tn, of which about Rs. 1 tn will come from extra-budgetary resources and more than Rs. 700 bn through budgetary grants and tolls.
 
Construction of National Highways has more than doubled to over 27 kms a day vs 12 kms per day and the total investment in the sector has increased by 2.5x times. Highest ever constructions of over 28,531 kms of highways have been built so far in the current government’s tenure in aggregate.
 
Increasing Investment in the Sector
 
 
 
What we can expect
 
Bharatmala project and its robust execution is a sign of Government’s dedication towards building a world class infrastructure which helps in new employment generation as well. But we are still on the way to achieve 45km per day target and with current pace of construction it might take longer time than expected. Growing budgetary allocation and quick clearance process could bring new hope and growth to the sector this financial year.
 
If we talk about success of HAM (Hybrid Annuity Model), we can say HAM has become a preferred mode but now in awarding of projects it is losing its charm over EPC again. HAM constituted 46% of the total projects awarded in FY18 vs 8% in FY16. While we expect HAM to constitute a significant part, we believe, it will be tough to maintain the momentum considering the pace at which financial closures are done. Funding for highway road construction majority of funds are received through IEBR route by NHAI over the last five years and due to this overall debt level of NHAI increased significantly over the last few years which might not be a good sign. Under previous NHDP era, the main cause for delay was clearances which is somehow sorted out in Bharatmala project awards.
 

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