National Highways

Development Project Phases

INTRODUCTION
The global phenomenon of rapid
industrialisation and liberalisation has
boosted the need for infrastructure
projects viz. Highways, Airports, Power
Projects etc.


Indian Infrastructure Scenario
3.2 million kilometres of Roadway
63,200 kilometres of Railway
Over 150 Seaports
12 International Airports and
Over 90 Domestic Airports
Modal Shift Share
About 65% of freight and 80%
passenger traffic is carried by the
roads.
National Highways constitute only
about 2% of the road network but carry
about 40% of the total road traffic.
Number of vehicles has been growing at
an average pace of 10.16% per annum
over the last five years.
Indian Road Network
Type of Road Length (Km.)
Expressways 200
National Highways 66,590
State Highways 1,28,000
Major District Roads 4,70,000
Rural and Other Roads 26,50,000
Total Length (second
largest in the world)
33.4 Lakhs Km. (Approx.)
Indian Infrastructure Investments
India needs about Rs. 27,60,000 crore of
investment in infrastructure developments
over the next 10 years.
As per the recent Assochams report on
Infrastructure: The $150-billion Growth
Story, in the coming six years, India shall
be investing Rs. 3,20,000 crore for the
development of infrastructure projects viz.
Highways, Ports and Airports.

Fund for infrastructure revised to
$475 b: FM (ET_19-08-07)
India will need an investment of $475 billion
during the 11th Plan ending 2012 to upgrade
infrastructure so as to sustain an economic
growth of nine per cent every year,
The Finance minister P Chidambaram said. The
challenge of infrastructure is huge... the
Committee on Infrastructure (CoI) has revised
funds required for infrastructure during 11th plan
from $320 billion to 384 billion at 2005-06 prices,
which means $475 billion at current prices, he
said.
The bottlenecks in infrastructure were pulling
down GDP growth by one to two per cent every
year.
National Highways Authority of India
(NHAI)
Constituted by an Act of Parliament-
National Highways Authority of India
Act, 1988.
Responsible for Development,
Maintenance and Management of
National Highways.
Operationalised in February-1995.

National Highways Authority of India
(NHAI)
India's Largest ever Highways Project
World class roads with uninterrupted
traffic flow
NHAI is responsible for implementing
on National Highways of length
around 24,000 Km.
National Highways Development
Project (NHDP)
The Govt. of India under the aegis of
NHAI initiated the National Highways
Development Project (NHDP);
Under the first two phases of the
project i.e. NHDP Phase-I & NHDP
Phase-II, about 14,279 km length of
National Highways are proposed to be
upgraded to 4 or 6 lane at a total
estimated cost of Rs.64,639 crore.
National Highways Development
Project (NHDP Phase-I and II)
The Golden Quadrilateral (GQ) Project
connects high density metro corridors of
Delhi, Mumbai, Chennai, Kolkata and
Delhi with a total length of 5846 Kms;
The North-South (N-S) Corridor
(Srinagar to Kanyakumari, including
Kochi-Salem spur) and East-West (E-
W) Corridor (Silchar to Porbander) with
a total length of 7300 Kms;
National Highways Development
Project (NHDP Phase-III)
NHDP Phase-III that was launched in 2005,
includes upgradation and 4 laning of 12,109
km of national highways on BOT basis at
an estimated cost of Rs 80,626 crore.
In addition to implementation of NHDP, the
NHAI is also responsible for implementing of
other projects on National Highways (mainly
road connectivity to major ports in India) at an
estimated cost of Rs. 4,000 crore
National Highways Development
Project (NHDP Phase-III-A_III-B)
NHDP Phase III-A: The Government has
approved 4/6 laning of 4000 km on BOT
basis and preparation of Detailed Project
Reports (DPR) of the balance 6000 km in
1
st
Stage and targeted to be completed by
Dec 2009 is in progress.
All the stretches ranging from 11 km to
300 km under the project will be executed
on build, operate and transfer (BOT) basis.
National Highways Development
Project (NHDP Phase-III-A_III-B)
The authority recently awarded a contract
for four and six-laning of 29-km highways
to Jaiprakash & Associates. The project is
expected to cost Rs 295 crore (ET_10-09-
07).
NHDP Phase III-B: In the 2
nd
Stage, 4/6
laning of balance 6000 km will be taken up
and completed by Dec. 2012
National Highways Development
Project (NHDP Phase-III-A_III-B)
The present phases under Phase I, II and
IIIA envisage improving more than 25,785
km of arterial routes on national highways
to global standards.
While NHDP Phases I and II are likely to
be completed by December 2008, Phase
IIIA is expected to be completed by 2009
end.
National Highways Development
Project (NHDP Phase-V)
NHDP Phase V: Under NHDP Phase V,
NHAI has awarded the contract for six-
laning of 148 km.
Other Phases viz. NHDP IV, VI and VII,
are in the planning stage.

Expressway Authority of India
(ET_31-08-07)
THE government is planning to set up
Expressway Authority of India on the
lines of National Highways Authority of
India (NHAI) for faster development of
rapid transit system.
The proposed authority would develop
about 15,000 km of expressway in the
country on build, operate and transfer
(BOT) basis over a period of 10 to 12
years.
Expressway Authority of India
(ET_31-08-07)
The CoI headed by the prime minister
had indicated to set up a separate
authority for expediting the
construction of expressways in the
country.
Expressways would increase the
average distance travelled by goods as
well as the passenger to over 500 km
per day against the present average
distance covered by long-haul vehicles
in the region of 250-300 km a day.
BOT Projects
The NHAI has so far taken up 32 projects
valued about Rs. 4692.31 Cr. on Build
Operate and Transfer basis (Toll based
projects).
Out of this, 22 projects have been
completed and 10 numbers of projects are
in progress.
The BOT Toll-Based Scheme
The toll based on the various studies
conducted by IRC has been recommended
as:
Rs. 0.40 per km. for cars,
Rs. 0.7 per km. for light commercial
vehicles and
Rs. 1.4 per km. for trucks and buses.
The BOT Annuity Scheme
The agencies unwilling to burn their
fingers through the toll system, the
annuity-based scheme is proposed.
Here, the private operator enters in to
a concession agreement with
Government and builds, operates the
project; the Govt. collects the toll and
it pays private operators a regular
amount for the concession period.
The NHAI SPV Scheme
Twelve projects valued about Rs.2266 Cr.
have been identified under SPVs funding.
Five projects amounting to Rs. 923 Cr.
have been completed so far under SPVs.
Seven numbers of projects valued about
Rs. 1343 Cr. are in progress on SPVs
funding basis
Under this scheme, the NHAI puts in a
certain amount of equity into the SPV with or
without a partner and uses this equity to raise
money from market. The money is to be paid
back from the future toll revenues.
Encouragement for Private
Sector Participation
Tolls rates indexed to whole-sale price
index;
Government/National Highways Authority
of India authorized to provide capital grant
up to 40% of project cost to make the
project viable. However, the quantum of
the grant would be decided on case-to-
case basis;
10 years of corporate tax holiday to be
availed of in 20 years of commissioning of
the project;
External commercial borrowings up to 35
% of the project cost permitted;
Encouragement for Private
Sector Participation
Import of modern high capacity road
construction equipments exempted from
payment of customs duty;
Foreign Direct Investment up to 100 % allowed
(with foreign equity up to Rs.1500 Cr.);
Development of Build Operate and Transfer
(BOT) on Government to Government basis
agreed in principle;
Model Concession Agreements have been
released for projects costing more than Rs.100
Cr. as well as less than Rs.100 Cr. to be taken
up under BOT scheme. A concession
agreement for BOT projects under Annuity
Payment Scheme has also been finalised etc.
Encouragement for Private
Sector Participation
Amendment of National Highway Act for
expeditious land acquisition, procedural
change for environmental clearance,
enhanced delegation of power to Ministry for
expeditious clearance of the projects.
As per Central Road Fund Act 2000, the
distribution of total of 100% cess on petrol and
50% cess on diesel would be: 57.5% for
National Highways, 30% for State roads and
12.5% for road over/under bridges and safety
works on Rail-Road Crossing. The remaining
50% of the cess on diesel is to be used to
develop rural roads.
Negative Grants
NORTH KARNATAKA EXPRESSWAY LIMITED
Case Example
Belgaum-Maharashtra Border Road Project
(Km. 515.000 to Km. 592.240 of NH-4)
KM 515 + 000
KM 592 + 240
K
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Y

P
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Major Components of this Project:

2 Lane rigid pavement (concrete) - 92 kms
2 Lane flexible pavement (asphalt) - 62 kms
Major Bridges - 06 Nos.
Minor Bridges - 12 Nos.
Grade Separators - 07 Nos.
Pedestrian Underpasses - 01 No.
Vehicular Underpasses - 06 Nos.
Cattle Walk, Cart Track - 11 Nos.
Cattle Walk cum Train - 15 Nos.
Bus Lay-byes - 15 Nos.
Traffic Safety Measures - Guard Rails on major open
intersections and high embankments.
Belgaum-Maharashtra Border Road Project
(Km. 515.000 to Km. 592.000 of NH4)