Date : 27/11/2023

Relevance: GS Paper3: Economy- Physical Infrastructure

Keywords: Pradhan Mantri Gram Sadak Yojana (PMGSY), National Highways (NH), National Highways Authority of India (NHAI), PPP Model

Context-

India ranks second globally in total road length, with a CAGR of 3.64% from 1991 to 2019. In contrast, the CAGR from 1951 to 1991 was 4.50%, albeit on a smaller base. The growth in road infrastructure has been remarkable, adding approximately 40 lakh km over the last 28 years, compared to about 19 lakh km in the preceding 40 years.

Notably, National Highways (NH) have seen the highest CAGR since 1991 at 5.02%, followed by rural roads at 4.67%. As of March 31, 2023, the figures stand at 1,44,955 km of NH and 1,67,079 km of SH.

India has prioritized improving penetrative connectivity in rural areas by implementing the Pradhan Mantri Gram Sadak Yojana (PMGSY) since 2001. This initiative has significantly enhanced access and spurred development. Rural roads, which make up more than 70% of India's total road network, have been a focal point of this effort.

Evolution of Road Development in India:

In the recent three decades, the emphasis has been more on quality, leading to better speeds and all-weather connectivity. Various organizational innovations and technologies have enabled this.

Pre-liberalization focus:

• Before liberalization, road development in India [Nagpur Plan (1943-1963), Bombay Plan (1961-81), Lucknow Plan (1981-2001)], was closely linked to generating direct employment.
• This emphasis on labor-intensive construction methods limited road quality until the late 90s when capital-intensive, high-tech equipment was introduced.

National Highways Authority of India (NHAI):

• NHAI was established in February 1995 to directly oversee the development of national highways (NHs). It was always said that 2% of India's roads (essentially the NHs) carried 40% of the traffic.
• Prior to NHAI, NH development, and maintenance were the responsibility of individual states with central funding. NHS carried a significant portion of the country's traffic.

Introduction of Public-Private Partnerships (PPPs):

• Initial discussions on PPPs began in 1996, but early concession agreements were skewed in favor of the government, deterring private investment in financing, construction, and operation and maintenance (O&M) of roads.
• PPPs were initially limited to low-traffic segments like bypasses and road overbridges.

State-Level Road Development Corporations:

• As NHAI gained momentum, many states established dedicated road development entities, such as the Maharashtra State Road Development Corporation Limited (MSRDCL) in 1996.
• These corporations encouraged PPPs and the development of expressway-standard roads, with Uttar Pradesh leading the way.

National Highways Development Project (NHDP):

• NHDP, initiated in 1998 under NHAI, included seven phases covering 49,260 km of the NH network.
• Phase 1 focused on four-laning the Golden Quadrilateral (GQ), connecting major metro cities, while Phase 2 expanded to connect the north-south and east-west corridors.
• The remaining NHDP works were incorporated into the Bharatmala Pariyojana in 2018.

Pradhan Mantri Gram Sadak Yojana (PMGSY):

• This successful project focuses on rural road development, with its achievements attributed to objective-based village selection, oversight by independent agencies (including the World Bank), and its placement under the Ministry of Rural Development rather than the Ministry of Road Transport and Highways (MoRTH).
• PMGSY has led to spin-off projects like the Mukhya Mantri Gram Sadak Yojana (MMGSY) in states looking for faster rural road development.

Viability Gap Funding (VGF):

• The NHAI introduced VGF as a bidding criterion with a 40% project cost cap, spurring interest among bidders and encouraging PPP projects in subsequent NHDP phases.
• The VGF model has been adopted in other infrastructure sectors

Evolution of the Model Concession Agreement (MCA):

• The road sector's first MCA was introduced in 2000. Over the past decade, various aspects of risk allocation between PPP players and authorities have been addressed, promoting continuous improvement.
• These changes encompassed revenue sharing, site handover, state support agreements, and standards compliance.

Focus on Expressways:

• India's journey in constructing access-controlled expressways began with the Mumbai-Pune Expressway in 2002. Although expressway development had a slow start, significant progress has been made over the last decade.
• As of August 2023, India boasts around 5,000 km of operational expressways, with an additional 9,000 km under construction. Ambitious plans propose an additional 20,000 km of expressways.

New Contracting Models:

• India has adopted innovative models over the past decade. The Hybrid Annuity Model (HAM) offers better risk allocation to private players, with the authority contributing 40% of the capital cost and the remaining 60% paid to the private entity over 30 years.
• The Toll, Operate, and Transfer (TOT) model allows private entities to collect tolls and maintain built roads during the concession period. Asset monetization is facilitated through Infrastructure Investment Trusts (InVIT).

Specialized Organizations:

• Apart from NHAI, specialized organizations have been established to achieve specific objectives. The Indian Highways Management Company Limited (IHMCL) was formed in 2012 for electronic tolling.
• The National Highways and Infrastructure Development Corporation Limited (NHIDCL) focuses on road development projects in border states, while the National Highways Logistics Management Limited (NHLML) was established in 2020 for Multi-Modal Logistics Parks (MMLPs) and port connectivity projects.

Road-Making Technologies:

• Over the years, we have learned to increase the rate of road surface construction (including setting records in the Samruddhi expressway), construct better bridges at a lower cost, and tunnel through mountains and environmentally sensitive areas.
• New and environmentally sustainable materials are being experimented with and used where they are found acceptable.

Electronic Toll Collection (ETC):

- Slow initial adoption, with 5% penetration in 2017, increasing to 96% by 2022.
- Average daily ETC of Rs 90 crore in 2021-22 through 55 lakh transactions.
- Evolve ETC technology to enable seamless, high-speed electronic payments, eliminating the need for vehicles to slow down.

Road Safety Focus:

- Inadequate road design and construction practices contribute to road accidents.
- Lack of buffer lanes for right turns and at entrances and exits.
- Need for improved crash barriers and immediate replacement.
- Low-quality roads for traffic diversion during construction leading to congestion.
- Insufficient scientific signage for visibility and to prepare drivers for speed changes.
- Unregulated roadside parking.

Lane Kilometres vs. Road Kilometres:

- Emphasize the measurement of lane kilometers over road kilometers to reflect both access and capacity.
- Include lane information in road maps for better decision-making by road users.

Coordination with PPP Players:

- Resolve disputes efficiently between PPP players and authorities to prevent project delays and inconvenience to road users.
- Overcome contractual conflicts that hinder the expansion of two-lane highways into four-lane roads.

Conclusion:

In conclusion, India's road infrastructure has made significant progress over the years, with a focus on quality, connectivity, and innovation. The introduction of new contracting models, specialized organizations, and road-making technologies has transformed the sector. However, challenges remain, particularly in enhancing road safety, addressing urban road needs, and improving coordination with PPP players. To further advance, the evolution of electronic toll collection and the emphasis on lane kilometers, along with the continued expansion of expressways, will be essential. Overall, India's road infrastructure continues to play a pivotal role in the nation's economic development and social inclusion.

Source- ORF