Interviews

We have managed to award 66 projects about 6,000 km of roads

October 2010

RPN Singh, Minister of State for Road Transport & Highways

According to Minister of State for Road Transport & Highways RPN Singh, last year 5,487 km of roads were completed, which works to about 13 km a day. And while the ministry continues to forge ahead and set new targets, he shares the government's plans and news about life in the fast lane in an exclusive interview with Pratap Vijay Padode. Excerpts....

Fast progress: In the past one-and-a-half years, we have made some really good progress despite facing several hurdles related to land acquisition, environmental clearances and utility shifting. The moment my senior minister and I took over the job, we embarked on a stupendous target of building about 20 km a day on an average. People thought that this would not be possible considering the work of the past three or four years before we joined. It was not that the ministry was doing badly but the overall economic situation in the world was at a critical juncture. We came in and incorporated several suggestions and our prime minister himself took the initiative to put the BK Chaturvedi Committee to help and improve the pace of road construction in the country. The recommendations of this committee have been incorporated in the concession agreement that has led to a great spurt of activity in this sector. To date, if you see our record, we have managed to award 66 projects, which is about 6,000 km of roads. In the past year, we completed 5,487 km of roads, which works out to about 13 km a day.

New targets: Our focus is to award more road projects and we cannot jump to 20 km a day overnight. To achieve this target, we need to have about 7,000 km of roads completed in a year. To do 7,000 km, we need to award 20,000 km of roads per year, which is humongous. But I think we can reach that target over a reasonable period of time. So far, contracts for a total length of 5,822 km have been awarded under Work Plans I and II. The award of contracts for building 23,744 km of roads under the National Highways Development Project (NHDP) by 2010-11 has been approved by the ministry.

Land in hand: Our major achievement has been on the land acquisition front. The National Highways Authority of India NHAI) has acquired about 22, 695 hectare in the first quarter of this fiscal combining different schemes while, last fiscal, we had acquired 39,000 hectare. The average of three years before we took over was about 12,000 hectare. So you can imagine the thrust we are giving this aspect to hasten overall progress. To expedite land acquisition, NHAI opened about 192 land acquisition units in several states, headed by an additional district magistrate (ADM) or sub-divisional magistrate (SDM), to liaise with NHAI through project directors. It cut the time taken for the land acquisition process to 11 months from 24 months.

The spend: To give you a better picture, the NHAI has spent over Rs 53,202 crore on road projects during the past three financial years. It incurred an expenditure of Rs 17,490.48 crore, Rs 17,756.37 crore and Rs 17,955.57 crore in 2007-08, 2008-09 and 2009-2010 respectively, on 256 highway projects. Of the 256 projects, 82 projects have been completed during the past three years and the balance work is under implementation. The Ministry of Road Transport and Highways plans to build 35,000 km of highways in five years. The NHAI has also restructured 47 schemes under the NHDP, mainly to increase their viability.

Getting the job done: First, we used to award the contract without acquiring the land. So sometimes projects got delayed and hence costs increased. Now, we don't award contracts unless and until we have 60 per cent of the land in possession. The rest gets acquired as this part is constructed in one or one-and-a-half years. According to the model concession agreement, work on any road project can start only after 60 per cent of the total land required for the project is acquired. We have also targeted completing all pending projects under EPC mode of past years by March 2012. We have identified over 100 projects that were delayed owing to different reasons and they will be completed.

On ROBs: One big stumbling block was the building of railway over bridges (ROBs), as we had to go to the Railway Ministry for approval of each project. We have incorporated a railway official on board for such projects and now we take permissions for all ROBs at one go. It is more a package kind of arrangement with options so the permissions we get are faster, quicker and more organised.

On SSAs: We have asked all states to sign the state support agreement (SSA) to help and improve the process of utility shifting in their respective areas. For example, if water pipes need to be shifted or electric poles have to be removed, such works are carried out by the states. This is important because we are also bound by the contract to give all possible support to the contractors. Through SSA, we bring states on board so that they too help us to speed up the pace of construction. We have already signed this agreement with 16 to 17 states.

On checking reckless bids: We came to see that a number of companies went overboard in bidding. You can take 10 contracts and not start the work, which automatically delays the project. We came up with a policy where the new financial closure clause will check reckless bids and divert developer attention from oncoming projects to focus on achieving closure in existing projects. So if you have more than three projects, you are required to have financial closure of at least three projects before you can bid for more. This new restriction will prevent a handful of contractors from hoarding a big chunk of projects, and speed up the projects awarded. The focus is that no private players overbid.

On quality contractors and works: We are always looking for quality contractors keeping in mind the pace and volume of construction we plan to undertake. We have quality contractors but we would be pleased to see all major infrastructure companies worldwide participating in this mega development. As we all know, constructing 20 km of road a day is not an easy task. The positive part is that there is great interest among the players. A lot of new players are entering this sector and now we get about 20 to 25 players bidding for a project. Thus there is very healthy competition. There is no complaint on quality of work as a number of checks and balances are in place. There is an independent consultant that looks after the project. Our people monitor the projects and the contractors know they will be blacklisted for poor quality.

On combining real estate with road projects: Yamuna Expressway is a state project and nothing to do with NHAI. We follow a very different model where the roads themselves should generate enough value for the stakeholders. In my personal opinion, there will be problems if you go about making roads in any other way.

On a structural revamp for NHAI: It is always our endeavour to further improve the functioning of our ministry. Keeping in consideration our targets, we are looking for more people and have advertised for the same. Also, we have come up with a policy to ensure a longer term for senior functionaries of NHAI for better coordination.

On mega projects and expressways: We are already working on three mega road projects involving investment of Rs 5,000 crore or above and covering nearly 500 km. As per the plans, NHAI will invite bids for nine mega road projects, entailing an investment of around Rs 5,000 crore each. As far as expressways are concerned, we have identified four expressways under NHDP that are at different stages of planning. One is Vadodara to Mumbai, the second is Bengaluru to Chennai, the third is Delhi to Meerut, and the last is Kolkata to Dhanbad. All feasibility reports will be with us by the end of this year.

On rural roads: The Bharat Nirman Yojana was established to make good quality rural roads. This was one aspect but to have such roads, we need huge resources. This was the initiative of UPA-I. We got some really good roads but these are the roads that actually become ODR roads, then MDR roads, then state roads, and finally national highways. Also, seeing the growth rate of automobiles in rural India, we cannot say the roads are not there, though they need to be improved. But for that we need huge resources. Our prime minister spoke about inclusive growth in UPA-II and we are extremely focussed in taking these roads to those parts of India that were left behind in national connectivity. There are states like Bihar, where we have awarded lots of roads. Other states include West Bengal, Orissa, Uttar Pradesh, Jharkhand and Madhya Pradesh where road connectivity was not that evident.

Eco-friendly imperative: We appreciate the benefits of being environment-friendly. Environment concerns are well taken care of when projects are conceived. We do have some issues but we try and sort them out. For instance, we went ahead and built overpasses in some reserves, not for human beings or vehicles but elephants. We try to be eco-friendly as far as possible.

SMOOTH RIDE

In km  FY11P  FY12P
BOT (toll)  5,286 4,192
BOT (annuity)  4,645 4,000
EPC  1,161 1,000
Total  11,092 9,192
NHAI road project targets; between FY10-FY14, total target is 37,050 km Source: BK Chaturvedi Committee report, IIFL Research