PM Urges States to Formulate Highway Development Programme for Cooridnated and time Bound Developmnt of Roads

Prime Minister, Dr. Manmohan Singh has said that good roads are essential element of infrastructure for providing industry and agriculture with the connectivity to markets for growth in production and trade, and more generally for improving the quality of life of citizens. Delivering the inaugural address at the “Conference on Public Private Partnership in National Highways : Challenges & Opportunities” organized by the Ministry of Road Transport and Highways with the assistance of the Planning Commission here today, he said that they are crucial not only for accelerating the growth rate, but also for making whole growth process more socially and economically inclusive.

Dr. Manmohan Singh said that financing an ambitious highways programme will no doubt require substantial resources. Some parts of the network can only be developed through public investment. There are however areas where private investment can be invited, based on affordable user charges with some capital subsidy as necessary. The Twelfth Plan strategy calls for exploring the scope for such Public Private Partnership as much as possible. I have often said Public Private Partnership is private profit in service of public at large, Shri Singh added.

The Prime Minister said that our country has been successful in attracting large volumes of private investment in this sector. Contract awards exceeded about 4,800 km in the last financial year and the Road Transport & Highways Ministry is well poised to award 7,300 km this year, to fulfill government’s resolve to build 20 km a day. The National Highways Authority, which deals with the roads that can attract private capital, has made PPP the preferred mode for most of its projects. PPP projects take much less time to complete and the Government does not have to bear cost overruns. This will not only enable us to leverage our limited public resources but also improve efficiency of service delivery.

Dr.Singh expressed his happiness that India has attained the second rank in the world among developing countries in attracting private investment for infrastructure projects and for this he complimented the Ministry of Road Transport and Highways and the concessionaires of the road sector for contributing a significant chunk of this investment.

The Prime Minister said that State Governments have a very crucial role to play in the road sector. While all roads, beginning from rural roads to state highways lie entirely in their domain, the support of state governments is absolutely essential for development and operation of the national highways as well. He urged the State governments to formulate their respective State Highway Development Programmes for a coordinated and time-bound development of roads in their respective States. He urged the States to work closely with the Central Government so that a modern road network can be developed in each State.

Union Minister for Road Transport & Highways Dr. C.P. Joshi said that our National Highways Development Programme had grown many fold. Our Public Private Partnership (PPP) projects had attracted very strong interest from the private sector and had become a favored destination for investors – domestic and foreign alike. He said that we had taken several steps to improve the enabling environment for private participation. All our concession agreements, bid documents and specifications had been standardised. They were fair, transparent and competitive and had been received well by all the stakeholders. As a result, our PPP programme in highways is the largest in the world.

He emphasized that PPP projects were public projects where public interest must always take precedence. Shri Singh said ,“Focus was on providing high standards of service and our toll rates are among the lowest in the world. Renewed efforts had been made to increase transparency and promote competition. The success in getting robust bids had shown what good governance could do. In the first four months of the current year, PPP projects with an investment of over Rs. 21,000 crore had been awarded. The bids received were far better than the estimated bids for these projects. This would give additional revenues of more than Rs. 10,000 crore. He hoped that this trend would continue in future too.”

The Minister said that out of 71,000 kilometers, projects for about 16,000 kilometers had been completed so far and about 15,000 kilometers were in different stages of implementation and award. This leaves about 40,000 kilometers which continue to suffer from neglect. In particular, 20,000 kilometers comprise single lane roads which are mostly in the less developed regions. The Ministry has decided to develop all these roads to two-lane standards and they would be built through turnkey EPC contracts in order to ensure timely construction without cost overruns. He hoped that this programme would be taken up with full vigour under the Twelfth Plan and would make sure that the fruits of development were shared by all regions of the country.

Referring to the six-laning of the Golden Quadrilateral which connects the metros of Delhi, Mumbai, Kolkata, Chennai and Bengaluru, Dr. Joshi said that Concessions for nearly half the length had already been awarded and the balance would be awarded within the next corridors. The Ministry is in dialogue with potential investors and the concerned State Governments to find innovative ways of financing these expressways.

Dr. Joshi expressed his concern on the difficulties associated with land acquisition and hoped to resolve the issue by building consensus. He also showed his commitment to the use of IT based systems in the functioning of highways sector. He said that a number of States had adopted the PPP mode for developing their State highways and so far, 77 projects for a length of 7,801 kms had been taken up. He requested the Planning Commission to work closely with the States so that our entire road network becomes world-class.

In his address the Deputy Chairman of Planning Commission, Dr. Montek Singh Ahluwalia drew attention of the participants to the constraints in carrying out expanded infrastructure development programme for the 12th Plan. He said that public funding would have to focus on programmes where private sector participation was unlikely. Thus to achieve goals of making one trillion investment in infrastructure during 12th Plan period, around 50% will have to come from private sector. He said that public sector funding in infrastructure will have to concentrate on N-E and PMGSY. He said that the development of infrastructure will play key role in the Nation’s effort to achieve a target of 9% growth during 12th Plan.

Shri Jitin Prasada, the Minister of State for RT&H in his address said that the investment in National Highway Development has increase manifold and private sector can also play a very important role in highways development. The Minister of State for RT&H, Dr. Tusharbhai A Chaudhary in his concluding remarks welcomed the active participation of private sector in the infrastructure development in the country.

The Conference provided a forum for sharing the knowledge and experience of the various stakeholders in the road sector with a view to improving service delivery. It deliberated on issues of critical relevance for attracting private investments in building National Highways. It also provided an opportunity to all stakeholders to gain insights into the policies and initiatives being articulated for building National Highways through PPP. This conference was of immense importance not only to the Government Departments but also to Road Development Agencies, Infrastructure Developers, Investment Banks, Private Equity Funds, Infrastructure Funds, Construction Companies, Investment Authorities and Legal/Consulting firms. A number of Central and State Ministers, top government functionaries, MD’s and CEO’s of top private sector infrastructure companies participated in it. It provided an opportunity to the private players to articulate their concerns, views and expectations directly to the policy makers and enable the Governments at the Centre and in the States to implement the necessary policy correctives.

The central theme of the Conferencewas to have an optimum level for all stakeholders by increasing private sector participation in the highways sector through attractive business opportunities for the private players, leading to accelerated economic growth of the country aided by improved infrastructure and world class highways for the citizens.

The road network of India is the second largest in the world, next to that of the United States of America. Roads have advantages over other modes of transport because they provide access to the last point of destination. In order to build world class highways in the country, the Ministry of Road Transport and Highways has initiated a time-bound action plan to build National Highways at a pace of 20 km per day i.e. 7300 km per year; bring all the single / intermediate lane National Highways to the minimum two lane level; and-take up a programme of 1000 km expressways.