Business-Need to bolster private investment in highways; funds a major constraint for large projects: Survey

Terming highways as a catalyst for economic growth, the Economic Survey Thursday said private sector investments in the sector remained "tardy" as such investors are interested in putting their money on a short-term basis. Even though the investment in highways has grown more than three times to Rs 1.58 lakh crore in 2018-19 availability of funds for financing large projects remains a bottleneck, the key document said.

The survey also noted that the National Highways Authority of India (NHAI) and the National Highways and Infrastructure Development Corporation Ltd were looking for long-term investments as the gestation period of road projects is long. There are also the associated risks from the projected revenue streams not materialising from tolls because of the uncertainty of traffic, it said.

Roads are part of an integrated multi-modal system of transport which provides crucial links to airports, railway stations, ports and other logistical hubs and acts as a catalyst for economic growth by playing a critical role in the supply chain management, the survey document noted. "The major constraints faced are availability of funds for financing large projects, lengthy processes in acquisition of land and payment of compensation to the beneficiaries, environmental concerns, time and cost overruns due to delays in project implementation, procedural delays, lesser traffic growth than expected increasing the riskiness of the projects resulting installed or languishing projects and shortfall in funds for maintenance," it said.

This dominant mode of transportation in comparison with rail, air traffic and inland waterways and accounts for about 3.14 per cent of GVA (Gross Value Added) and 69 per cent and 90 per cent of the countrywide freight and passenger traffic respectively, the survey said. It budgetary support accounted for 48 per cent of the investments in 2018-19 and Internal and External Budgetary Resources (IEBR) accounted for 39 per cent with private investment accounts for only 14 per cent.

India has a road network of about 58.98 lakh kilometres as on March 31, 2017, with rural roads constituting 70.65 per cent and the national highways constituting 1.94 per cent. The Ministry of Road Transport and Highways (MORTH) has declared 2018-19 as the 'Year of Construction' and has been making constant efforts to expand and upgrade the network of the national highways in the country as a result of which road

construction in kilometres grew at 30 kilometres per day in 2018-19 as compared to 12 kilometres per day in 2014-15, the survey said. It said that the increase in the pace of construction was achieved by introducing proactive sector policy to respond to challenges faced by sector, including process streamlining indicating approval authorities with enhanced delegation of approval limits, putting in place mechanisms for inter-ministerial coordination, detailing steps to be taken for languishing projects and introducing innovative project financing for leveraging both private and public funding and streamlining land acquisition processes.

"Huge investments have been made in the sector with total investment increased more than three times from Rs 51,914 crore in 2014-15 to Rs 158,839 crore in 2018-19," it said adding the investments in roads have been financed from budgetary support, internal and extra-budgetary resources (IEBR) and private sector investment. The Central Road Fund (CRF) which is a major source of budgetary support for the Highway sector was also amended by the Finance Act, 2018, and replaced by Central Road and Infrastructure Fund (CRIF) wherein the fund now is to be earmarked for various infrastructure sectors such as transport, energy, water and sanitation, communication, social and commercial infrastructure, it said.

The survey said the major outcomes in the road sector during the period 2014-15 to 2018-19 were the construction of Eastern Peripheral Expressway, Delhi-Meerut Expressway and Dhola-Sadiya Bridge. Eastern Peripheral Expressway was constructed with the objective to decongest the national capital by providing an alternate route to the traffic not destined for Delhi.

Delhi-Meerut Expressway is the first national highway in the country with 14 lanes, dedicated cycle tracks and pedestrian paths with several eco-friendly features. Dhola-Sadiya Bridge connects Assam to Arunachal Pradesh and ensures 24X7 connectivity.

The Survey said the construction of national highways (NH) proceeded at a rapid pace with more than 20 per cent of the existing highway length of 132,000 km being constructed in the last four years alone. It added the infrastructure of the North Eastern states was a special focus and there has been a significant improvement in connectivity with the building of key bridges,

and the expansion of railways/highways. The 4.94 km long Bogibeel bridge in Assam was inaugurated in December 2018 and is the second longest rail-cum-road bridge in Asia.

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