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Published:May 7, 2019 12:09 PM
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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