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HECTIC activity is being witnessed in the roads sector involving not just the Central and State governments, but also the industry, financial institutions, engineering and financial consultants and so on. New and innovative ways of undertaking road projects are the order of the day, and, while much remains to be done, one could say that the sector is on the move.
How has all this come about? To begin with, there is the perception that roads constitute a vital infrastructure without which growth beyond 6 per cent would not be possible. This perception found its voice in the political will to provide resources in the form of a cess of Rs.1 a litre on diesel and petrol. The revenues generated from the cess provided the means to undertake the National Highways Development Project (NHDP), fulfil a commitment to connect the country with an all-weather road within a given time-frame, the Pradhan Mantri Gram Sadak Yojana, and finance the States to improve and upgrade their State highways and major district roads.
The success achieved in various areas emboldened the government to seek parliamentary approval to increase the cess by 50 paise so as to enlarge the programme and achieve the goals faster. The success achieved is in no small measure owing to the progress of the National Highways Authority of India (NHAI) in implementing the NHDP. With the quick and early implementation of the programme, people have begun to see their dream of a good system of highways becoming a reality.
The implementation of the NHDP was no simple task. When the programme was announced in 1998-99, the NHAI was a nascent organisation with only a handful of officers. Although the legislation to set up the NHAI was enacted in 1987, it was only in 1995-96 that the Authority was made operational with the appointment of a Chairman. In the beginning, the NHAI was asked to handle an Asian Development Bank (ADB) project, which involved work on about 300 km of national highways. The real challenge came, however, with the announcement of a project for the four-laning of around 14,000 km at a cost of over Rs.65,000 crores, to be completed in 10 years. The government provided the requisite tools to the NHAI - money, authority and power - to undertake the task. The effort was so successful that the Rs.30,000 crores required for the first phase of the 6,000 km of the Golden Quadrilateral was organised in a very little time. Furthermore, in a significant procedural change, the Central government approved an annual programme instead of approving individual projects. Thereafter, the NHAI had full powers to award contracts.
The NHAI Chairman was also given the powers to create posts up to the level of general managers and make recruitments. People were taken on deputation from the Ministry of Road Transport and Highways, the State public works departments (PWDs) and other public sector organisations. Despite these powers it was well nigh impossible to recruit adequate number of persons for managing such a large programme. It was therefore decided to outsource as many functions as possible. Thus, project preparation and construction supervision were outsourced while the construction contracts were awarded to outsiders.
Finally, when the build-operate-transfer (BOT) projects were undertaken, apart from the procurement of concessions, the entire activity of design, construction, operation and maintenance was transferred to the private sector. This was a unique model of public-private partnership, perhaps attempted for the first time in the country on such a large scale.
A major problem in any project of this magnitude is the acquisition of land, shifting of utilities and the removal of trees. Since the NHDP involved so many States, the NHAI had to rely on the support and assistance of the State governments. Some of them were initially reluctant to help claiming that it was the NHAI's responsibility. Soon, however, when the sheer magnitude of the programme became apparent, the Chief Ministers themselves took interest and directed the Chief Secretaries and District Collectors to provide all possible assistance. State and district-level committees were set up to review and speed up the project.
Another issue was the capacity of the domestic construction and engineering industry to undertake such a gigantic task. While the NHAI invited international companies to participate in all its projects, it was clear the programme could succeed only on the basis of the ability and strength of the domestic industry. Prior to this, there was hardly any road construction industry, or modern equipment for road building, and the civil engineering community was fast disappearing. The NHDP changed all that. With some import duty incentives from the government and equipment advanced by the NHAI, the industry modernised itself completely and became conversant with modern techniques of highway construction.
Although some problems remain, the groundwork has been done for much faster progress in the subsequent phases. The industry is now geared fully to undertake bigger tasks. BOT projects have created a buzz in the market and funding for these projects is now available in plenty.
Deepak Dasgupta is former NHAI Chairman.
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