The Confederation of Indian Industry (CII) organised a national conference on Road Infrastructure-Creating Demand: Stimulating Growth on 25 March 2021. The Roadways sector plays a very significant role in the growth of economy as around 64.5 percent goods in India are transported via road and around 90 percent passenger traffic uses road networks to commute. 

 

The conference highlighted emerging trends and new opportunities in road development, and the impact of road infrastructure on economy, and strategies and solutions to fast-track project execution and implementation on ground.

 

The conference graced participation of eminent speakers – Nitin Gadkari, Union Minister for Road Transport & Highways & MSME; Deepak Shetty, CEO and Managing Director, JCB India; Krishna Prakash Maheshwari, CEO, Adani Road Transport; Sudhir Rao Hoshing, Joint Managing Director, IRB Infrastructure Developers; Nitin Agarwal, Managing Director, Prakash Asphalting’s & Toll Highways (India);  Suresh Goyal, Managing Director & CEO, National Highways Infra Investment Managers; Rajesh Kemprai, Commissioner & Special Secretary (Road), government of Assam;  Nitin Ramesh Gokhran, Principal Secretary (PWD), government of Uttar Pradesh, among others.

 

The key focus areas of the conference included initiatives taken by the government of India to accelerate road infrastructure and opportunities to collaborate; emerging trends and new opportunities in road development and the impact of road infrastructure on economy; identifying strategies and solutions to fast-track project execution and implementation on ground; driving road asset monetisation through public private partnership (PPP); challenges and opportunities for stimulating road infrastructure development in states; and project financing in roads infrastructure and the way forward.

 

Nitin Gadkari, Union Minister for Road Transport & Highways & MSME, noted that recent noteworthy strides in infrastructure projects aptly capturethe reason why the government of India has been giving the highest priority to infrastructure development in the country. The increased investment in infrastructure is the need of the hour to overcome COVID-19 slowdown. The Centre has taken up several measures in the recent past to provide flipto infrastructure development, particularly in road construction. 

 

The road infrastructure has both direct and indirect effect on overall development of the country, resulting in enhancing movement of goods and creating job opportunities. 

 

The National Infrastructure Pipeline (NIP) which will provide world-class infrastructure has been expanded to cover more than 7,300 projects with an investment of Rs 111 lakh crore by 2025. Of this, projects worth Rs 44 lakh crore are under implementation, while projects worth Rs 34 lakh crore are under conceptualisation stage and projects worth Rs 22 lakh crore under development stage. 

 

Moreover, for 2021 the Centre has raised Y-o-Y capital expenditure by 34 percent to Rs 5.54 lakh crore. Also, in the Union Budget 2021, the Centre has made the highest-ever allocation of Rs 1,18,000 crore to the Ministry of Roads, Transport  and Highways (MoRTH). Of this, Rs 1.8 lakh crore is for capital expenditure. Apart from this, the pace of construction of highways has reached a record level of 35 km per day and it is likely to go up to 40 km per day post-March 2021. 

 

The Ministry has also launched Bharatmala Pariyojana which envisages development of 34,000 km highways at Rs 5.35 lakh crore. So far, the contract has been awarded for 13,521 km and DRP for 16,400 km is in the pipeline, while tenders have been issued for 4,800 km roads. 

 

The Ministry has removed the requirement of EMD for bidding new tenders to enable new players to participate in highway construction. Another initiative by the government is the launch of the National Asset Monetisation Pipeline and Monetising Operating Public Infrastructure Assets. The government has set the target of monetising around 100 assets in the Oil, Gas, Ports, Airports and Power sectors. 

 

The Roadways Ministry through the Nation Highways Authority of India (NHAI) is planning to raise Rs one lakh crore through monetisation of highway toll operate transfer (TOT) mode in the next five years. In a move to catalyse long-term investment in infrastructure, the government is in the process of setting up new Development Finance Institutions (DFI) with a capital base of Rs 20,000 crore, with a lending target of Rs five lakh crore in three years. 

 

At the same time, the most important sector related to the transport sector is the Automobile sector. Presently, the turnover of this sector is Rs 7.50 lakh crore and the government is planning to move towards the alternative fuel i.e. Ethanol, Methanol, Biodiesel, Hydrogen Fuel Cell, CNG and Electric Cars. It is encouraging to move to alternative fuels as the country’s import is worth Rs seven to eight lakh crore for crude oils. The Ministry is also working to develop metal-ions such as Aluminium-Ion, Steel-Ion, Zinc-Ion, etc. Also, experiments are oninHydrogen Fuel Cell. The Centre is also focusing on development of Waterways. 

 

The Ministry has undertaken a project to develop elevated road bridge starting from Chennai to Madurai, and it has now been decided that the route at the ground level will have six- to eight-lane road, the first and second level will see construction of a flyover, and the third level will be public transport system utilising the state-of-the-art technology. The same system will be seen in Pune to Shirur route. 

 

Apart from this, the authority is planning to make Mumbai-Delhi Expressway as electric expressway which will see sustainable change in the cost. The Ministry will also take up roadside amenities, logistics parks and bus ports which will see huge employment potential. It will also see development of smart villages. The Central government aims to create rural economy of Rs five lakh crore and create employment opportunities for five crore. 

 

Currently, the GDP growth from the Agriculture sector is eight to 10 percent and the Centre targets to take it up to 20 percent, while the Manufacturing sector contributes 22 to 24 percent and targets to raise it to 35 to 24 percent, and the Service sector contributes 50 to 56 percent to the GDP. 

 

Krishna Prakash Maheshwari, CEO, Adani Road Transport, highlighted some of the steps taken up by the Ministry and NHAI such as monthly interim payments to contractors and concessioner for HAM and EPC projects, instead of milestone payments, reducing the requirement of bank guarantees, extension of time. NHAI has been pushing for pond ash for construction; however, the company is still finding it difficult for timely and adequate availability of pond ash in a number of states, which is affecting the projects. He requested for a renewed push from the Ministry’s side towards addressing the problem. He also requested for a complete relook at the office of independent engineers and officers whose roles and power should be restructured. A large number of issues will be streamlined due to this. 

 

Sudhir Rao Hoshing, Joint Managing Director, IRB Infrastructure Developers, stated that as per the rating system that happened recently, of the first 10 projects nine were BOT projects and the first four projects were by IRB Infrastructure Developers. One of the good things that happened recently is the bid security being removed and also the loading of technical requirements to qualify for projects. He also mentioned that there has to be projects based on financial capabilities one can win or execute at a time in a year. The company is looking forward to the recently announced wayside amenities projects. He also supported the GPS-based toll plaza system which was announced, and currently 90 percent is electric tolled-based system. 

 

Suresh Goyal, Managing Director & CEO, National Highways Infra Investment Managers, noted a few points regarding asset monetisation. The asset monetisation has never been attempted as a national mission. The government is looking in a structured way of doing monetisation as it is very important for stakeholders, debt providers, developers, etc. The government has taken specific input from stakeholders in a very structured mannered to get new ideas, improve the process, etc. Some of these are under process and will be unveiled soon. This could include issues related to how DPRs are prepared, certain sections of the concession agreements, time allocated for various parties, etc. 

 

NHAI has been a drawcard of asset monetisation as it has experience of more than a decade of engaging with developers, banks and institutions. As much as Rs 17,000 crore have been raised under the TOT model in the last three years. There are developers who want to participate but do not have the capability to set up their own platforms or access professionals; the Infrastructure Investment Trusts (InvITs) plays a very crucial role in this. 

 

Kaushik Pal, CEO-Asia, Roadis, highlighted that Roadis is the only entity which has carried out monetisation plan in the US. Hence, its association has helped to understand the ways the monetisation process happened across the globe. The company also has experience in the service-level based various shadow tolling projects in Europe. The company sees growth and prospects in the Highways sector, in terms of paradigm shift and the government stand in terms of bringing in long-term funds and the change happening from manual tolling to fast-track tolling and later to link-based tolling. 

 

The company sees an exponential growth in the Highways sector, as almost seven percent of the economic activity depends on one percent of highways. He also welcomed the steps taken up by the government such as monetisation process, international funds, providing tax incentives to sovereign wealth fund, automated toll collections, among others. 

 

Akilur Rahman, Chief Technology Officer, Hitachi ABB, mentionedwhat additional assets can be created with incremental investment to bring in technology which can be monetised and use it for O&M. With incremental investment, this can be used for energy corridors and also for telecommunication corridors. Looking at energy corridors and the road side along highways, some of the real estate areas can be used for developing solar PV projects and wind power projects. The government has also announced the Hydrogen Mission where hydrogen fuel cells can be used for energy generation. Hydrogen fuels require good logistics support, and highways will be the best route for transportation of the same. Moreover, micro-grid can be created alongside highways which can produce and store energy. 

 

Another part is power transfer or energy transfer. For instance, along the highways cable transmission of high power can be effectively utilised to supply power to nearby areas, villages and towns. Since the country is now moving towards electric mobility, one can use highways and real estate to develop electric vehicle charging stations where there can be normal charging, fast charging and flash charging. This will help in achieving various missions such as electric mobility, hydrogen mission, carbon neutral, etc. Also, this can be used for running battery-operated trains for which authority will not have to lay the lines. 

 

An Internet of Things (IOT) platform and cloud platform can also be built which can have good real-time forecasting mechanism, integrated command and control centre which can be used for these utilities including transport, energy corridor, telecommunication, EV charging and at the same time it can be used for disaster management. 

 

Rajesh Kemprai, Commissioner & Special Secretary (Road), Government of Assam, highlighted the state initiative undertaken for road infrastructure development. Road structure in Assam accounts for 72 percent of freight movements. In terms of passenger movement, 90 percent is dependent on roadways. The government is looking to develop and improve state highways in the next 15 years to bring it on a par with the South East Asian countries. 

 

In a move to provide the quality road in linkage with national highways and rural networks and multi-modal transports, the government is taking up initiatives with funding from various institutions. The investment in this sector in 2018-19 to 2021-22 is expected to grow to Rs 8,200 crore and more later on. The state government is also planning long-term investment plans for road network, and maintenance plan is being prepared for the entire state. It is also focusing on internal connectivity for promoting trade and commerce. The state government is incorporating a programme for providing economic growth centre, business parks, multi-modal logistics parks, etc. The state is also utilising waste plastic technology on pilot basis for developing roads. 

 

Nitin Ramesh Gokhran, Principal Secretary (PWD), Government of Uttar Pradesh, highlighted that the state has one of the biggest road networks in the country. It has a road network of around 1.65 lakh km which is increasing by the day. In the last three years, the department has undertaken development of around 13,000 km new roads and 13,500 km existing roads expansions. 

 

In about two-and-a-half years, national highways authorities within the state of Uttar Pradesh have done Rs 25,000 crore land acquisition, out of Rs 60,000 crore investment it has planned for national highway network in the state. 

 

The Uttar Pradesh State Highways Authority (UPSHA) has been formed for strengthening state highways specifically for PPP projects. It is currently constructing roads using PPP and BOT. The authority is now looking at HAM model also. Three roads have been constructed by UPSHA. These include – Bareilly-Almora road (54 km); Varanasi-Shaktinagar road (115 km); and Muzaffarnagar-Saharanpur road (53 km). Work on Pukhraya-Ghatampur-Bindki road (SH-37) is under process. The first road stretch on Pukhraya-Ghatampur will be 82 km and the second road will be 89 km. Also, feasibility study on Sambhal-Gawaan-Anoopshahar to Bhimpur Chauraha road is in progress.  

 

The state government has taken up major road development projects with loan assistance from the World Bank. There are four PWD projects currently progressing under Phase-I. These include -- Garutha-Chirgaon road (SH-42) of 49.45 km with a sanctioned cost of Rs 227.17 crore. The project is almost complete and dedicated to the state. The others include -- Hamirpur-Rath road (SH-42) (74.44 km); Gola-Shahjahanpur road (SH-93) (57.30 km); and Badayun-Bilsi road (SH-51) (79.42 km). These projects are in advance stage and most of these projects will get completed by June 2021. Apart from this, there are six projects taken up under Phase-II of the World Bank loan and the work on these projects is also expected to commence from June 2021. 

 

Moreover, the nodal agency has also taken up district road improvement projects with loan assistance from the Asian Development Bank (ADB). Some of these include -- Hussainganj-Hathgaon-Alipur road (36 km) with a sanctioned cost of Rs 162.40 crore; Haliyapur-Kurebhar road (A & B) (96 km) at a sanctioned cost Rs 387.10 crore; Nanau-Dadaun road (30 km) with a sanctioned cost of Rs 124 crore, among others. Most of these projects will also be completed by June 2021.