Which is the largest NH in India

Road construction
Ambitious infrastructure plans

Kamal Nath, Indian Minister for Roads and Transport, has set himself the goal of building 7,000 kilometers of motorway in India every year. For comparison: Germany's highly developed motorway network covers a total of 11,000 kilometers.

In addition to the National Highway Development Program (NHDP), which aims to build 20 kilometers of freeway a day, a separate Expressway Authority of India has been set up to take over the development of almost 17,000 kilometers of expressway in India. The figures show that with a seven percent increase in traffic and a twelve percent increase in sales in the automotive industry, road construction is one of the fastest growing sectors in the Indian economy. The ambitious infrastructure plans of the Indian government also include the construction of bridges and overpasses as well as the creation of upscale megastructures and sea connections.


These projects take into account the increasing urbanization of India. Like other infrastructure projects, they face a number of challenges. The financing of the infrastructure projects in India is one of the biggest problems: The core infrastructure sectors, which include not only road construction, but also rail and air traffic as well as gas and electricity supply, but also irrigation, see themselves in the current five-year plan of the Indian company Government (Eleventh Plan Period) faced a funding deficit of $ 150 billion to $ 190 billion. This deficit corresponds to about 35 percent of the planned investments in this sector. The daily construction of 20 kilometers of freeway alone requires a total investment of 80 billion US dollars, which will have to be raised over the next three to five years.

Delays increase project costs
Project implementation also has considerable potential for optimization. Indian engineering, procurement and construction companies often find it difficult to take advantage of opportunities to save time and costs through more effective procurement and planning processes. These inefficiencies cause an average of 20 to 25 percent time and cost overruns for projects, in some sectors even more than 50 percent. The partially restricted access to modern materials, equipment and technologies also plays a role here. Despite the good training of Indian designers and engineers, differences sometimes arise in cooperation that lead to modifications to ongoing projects. These in turn often cause disputes and thus delays, which ultimately also affects the project costs.


Delays are caused by a bureaucracy that is still somewhat cumbersome in some cases: Infrastructure projects in India require a large number of official approval procedures - which in very few cases have a fixed time frame. Another very common problem in India is the procurement of building land. As is customary in worldwide practice, the land to be built should be completely owned by the building authorities before the tendering process. This is not always the case in India. Projects are often put out to tender when a part of the land has been bought, sometimes less than 30 percent of the entire area to be built on. The late acquisition of the required building land then also causes project delays - and is one of the greatest challenges in road construction projects.

Indian government takes remedial action
The Indian government has remedied this with the ambitious National Highway Development Program. In order to ensure that building land can be procured quickly, the Indian government set up units at the state level. These country units are equipped with state-of-the-art technology that is used throughout the entire planning process. The technology also enables access to satellite maps. Using satellite photos, maps for the procurement of building land are created before the planning and the land procurement is clarified in advance.


The National Highways Authority of India (NHAI) itself is organized on a decentralized basis; more than ten regional approval offices and six managing directors at different locations ensure better coordination with the responsible government authority. Approval procedures are shortened and approvals are created more quickly. In order to make road development and maintenance as well as road operation attractive for private investors as part of a public-private partnership program, the Indian government created the legal basis for this. Thanks to this amendment to the law, it is now possible for private investors to collect taxes and fees from users of the roads or bridges. Since the amendment and the establishment of a Public-Private Partnership Appraisal Committee in January 2006, the agency has approved 116 projects with project costs of US $ 23.9 billion, which guarantees part of the funding.


The Indian government put together a comprehensive package of measures that will facilitate the development of large infrastructure projects and remove possible obstacles. With these regulations, for example, the Golden Quadrilateral project - a motorway network that connects the four megacities of Delhi, Mumbai, Calcutta and Chennai - was almost completed in December of last year. Under the direction of the NHAI, an almost 6,000 kilometer long four- or six-lane motorway network, including the associated building infrastructure, was built here. Since this network went into operation, less than two percent of India's road network has accounted for almost 40 percent of all car traffic in India.


author


Olaf Hoffmann

CEO

Cod group

Offenbach am Main

[email protected]


IHK WirtschaftsForum
June 2010