Our highest priority is to revive Road Sector: Gadkari
To begin with please accept NBM&CW's heartiest congratu- lations as the new Union Minister for Road Transport, Highways and Shipping. After having a successful stint as Maharashtra PWD minister where you initiated many important infrastructure projects in the state; what are your top priorities to revive the ailing road sector's projects in the country and take forward the vision of Prime Minter for building world-class highways network across the country?
Thanks for your greetings and the kind words about my past performance in Maharashtra.
As you know we have inherited the legacy of an unfavourable environment for economic growth and neglect of the road sector in the last 10 years of the Congress led UPA government.
The Narendra Modi government has already initiated urgent measures to undo the damage and the Finance Minister Arun Jaitley's budget has clearly spelt out this commitment, especially a boost to the infrastructure sector, promoting investment, both private and public and removing obstacles blocking growth.
We are according top priority for revival of the ailing road sector projects and have already prepared a time-table to take forward Prime Minister Narendra Modi's vision of building world-class highways across the country.
The projects undertaken by the NDA under Prime Minister Atal Bihari Vajpayee's leadership, which recorded a tardy progress are being strengthened with a focused effort backed by investment of Rs.37,000 crores to achieve target of 8500 kms of highway development in the current fiscal.
"Our Government is committed to bringing about complete accountability and transparency through e-governance and e-tendering in all segments of governance, including the road and highway sector."
Our commitment to provide improved connectivity to the North-East is underscored by earmarking an amount of Rs.3,000 crores for this region.
We plan to develop expressways alongside the industrial corridors. The first step would be to prepare projects and we will spend Rs.500 crores on it.
Let me tell you that the Cabinet Committee on Economic Affairs (CCEA) has already cleared seven ambitious road projects. These include: Development of four laning of Kazhkkoittam-Mukkola section of national highway NH-47 in Kerala;
Building of four laning of Ambala-Kaithal section of National Highways 65 in Haryana.
Construction of four laning of Yadgiri-Warangal section of national highway NH-163 (old NH-202) in Andhra Pradesh;
Expansion into four laning of Sultanpur-Varanasi section of national highways NH-56 in Uttar Pradesh;
Development of four laning/two laning with paved shoulders of Bikaner-Phalodi section of national highway NH-15 in Rajasthan;
Development of four laning of Ghaghar bridge (Indo-Nepal border)- Varanasi section of national highways NH-233 in Uttar Pradesh, and
Development of Delhi-Meerut expressway and other connecting roads including 6/8 –laning of national highway NH-24.
We are seriously considering plans to transport gas, power and information (IT) side-by-side highways, preferably through underground optic fibre and gas pipelines.
We are also keen on developing cement-based roads as they are four percent cheaper and maintenance-free for a long time.
Under your supreme guidance, the ministry of road transport has identified key issues that have blocked road construction projects and has also prepared a policy document. In making this policy note, one hopes that the concerns of all stakeholders must have been taken into consideration. How have issues like MCA, lack of project implementation details and existing exit policy affected the growth of road and highways sector? Would you like to elaborate on the policy note addressing these among other issues for the benefit of our readers?
Some of the key issues that blocked road construction projects in the past ten year have been identified in a white paper published by the NHAI recently. These include: undue importance to award of projects, without considering project preparedness. Pressure was brought to bear on NHAI to award projects even when the land was not acquired to the required extent, environment and forest clearance was not in place, other clearances were under process. Besides, lesser attention was given to working out a strategy to enable timely completion of projects. Slippage started to occur. When project execution suffered continuous slippages, stress on the sector became very high.
NHAI had to go into a firefighting mode fighting a losing battle, the developers lost opportunities and suffered under-utilization of deployed resources, lenders had to cope with defaults in debt servicing, requests for debt restructuring, non-performing assets etc. The public could not avail the benefits of completed roads and the government itself lost enormous revenue which it could have received had the projects been timely completed and stakeholders received their just dues. Some important ministries whose contribution was integral to the timely completion of projects went about their task unmindful and unconcerned with the crisis they were creating due to delayed clearances/sanctions, since the system demanded no accountability from them.
We are trying to get together all the stakeholders to resolve these disputes and minimise delays due to land acquisition, forest clearance and dispute between state governments at the earliest and finish the projects worth Rs.40,000 crore.
"I expect to add 30 km a day on an average after resolving all the delays in two years. I have already held several rounds of talks with all the stakeholders including bankers, developers, state government's representatives and department officials to find ways to resolve the delays in projects by Aug 25, 2014."
Sir, you were one of the founding fathers of NHAI. How, over the years, has NHAI performed? What are its strengths, weaknesses, threats, and opportunities? What are your plans to strengthen NHAI to enable it to deal with slow moving road projects and fast track PPP projects in the road sector? Also a word about the formation of Expressway Authority of India to deal exclusively with Expressways projects, since NHAI has not been able to deal with such projects?
When we formed the NHAI during the NDA regime as an authority for the development, maintenance and management of national highways, functional autonomy was granted to this prestigious body to act on business principles. It was formed with the objective to ensure that all contract awards and procurements conform to the best industry practices with regard to transparency of process, adoption of bid criteria to ensure that the best company gets to execute the contract, implementation of projects conform to best quality requirements and the highway system is maintained to ensure best user comfort and convenience.
Unfortunately, the functional autonomy aspect was diluted during the UPA regime and the central government assumed the role of decision-maker, intervening in many of the decision makings which are in the domain of NHAI.
I believe that such interventions should be curtailed and NHAI should be given clear targets and empowered to chart its own course to achieve such targets.
"We are keen on developing cement-based roads as they are four percent cheaper and maintenance-free for a long time."
Moreover, domain knowledge is important for ironing out issues in the process of project execution. Changes in project documentation such as MCA, RFQ & RFP etc. should be left to the high-powered board of NHAI. Right now there is no proposal before the government for the setting up of an Expressway Authority of India to deal exclusively with Expressways projects.
Is there a need of a Regulator for the roads and highways sector for the sake of its seamless development?
I personally don't think we need a Regulator for the roads and highways sector. We are working on certain measures to ensure seamless development which are in pipeline and may be outlined sooner than later. Please give us time and we will deliver. I would not like to elaborate at this juncture.
What about your plans to bring complete accountability and transparency in the road and highways sector?
Well, the NDA government under the dynamic leadership of Narendra Modi is committed to bringing about complete accountability and transparency through e-governance and e-tendering in all segments of governance, including the road and highway sector.
My ministry is pursuing this commitment vigorously and honestly. Have faith in us. We will never falter on this count. Accountability & total transparency will be the hallmark of our government.
In the last 3 years private investment has almost dried up in the sector and without which it is difficult to implement the Government's ambitious Road Development Plans. What initiatives are you taking to attract more private investors and rejuvenating the PPP Model?
The Modi government's first budget has outlined a road-map for revival of the engines of growth. We are committed to promoting investment both private & public in the infrastructure sector including roads and highways.
Around 189 projects are stuck due to delays in completion road and highways causing huge built up of project non-performing assets (NPAs) worth crores of rupees where banks have participated or helped in financial closure. These banks are now under stress. The private contractors now want to exit these projects as there has been no progress for a long time.
This is one of the reasons why we are now planning to shift to EPC (engineering, procurement and construction) model of road development. The government proposes to develop upcoming highways projects for the coming two years under the EPC mode and try to resolve the issues surrounding earlier projects soon. The shift to EPC mode is due to the fact that PPP modes are economically not viable at this moment.
The EPC entails the contractor build the project by designing, installing and procuring necessary labour and land to construct the infrastructure, either directly or by subcontracting. However unlike PPP, the financing will be done by the government and not by banks or private equity funds through issuing of sovereign bonds or taking financial guarantees for the project.
The highway sector currently contributes around 4.5 percent to the GDP and is responsible for job creation and has a multiplier effect on the economy. However, delays due to land acquisition, forest clearance, and defence land handovers have stalled progress in the sector.
Industry estimates show that under the current dispensation of road development only three km of highways are added everyday from a target of 20 km.
I expect to add 30 km a day on an average after resolving all the delays in two years. I have already held several rounds of talks with all the stakeholders including bankers, developers, state government's representatives and department officials to find ways to resolve the delays in projects by Aug 25, 2014.
"The government proposes to develop upcoming highways projects for the coming two years under the EPC mode and try to resolve the issues surrounding earlier projects soon."
Finance Minister Shri Arun Jaitley in his budget speech has proposed to provide more than Rs.37,000 crore to highway development. The government is targeting to develop 8,500 km of highways in 2014-15. Industry estimates the cost of these projects which are worth Rs.60,000 crore to have escalated further.
Prime Minister Shri Narendra Modi has evinced keen interest in speedy development of the infrastructure projects and asked me to convene a monthly meeting with representatives of various ministries and departments including railways, defence, and environment and forests to resolve issues concerning road developments.
Our ministry is in touch with some foreign governments for getting long-term finances at attractively low interest rates by giving 26% equity stakes.
The financing is expected to be worth Rs.100,000 crore for upcoming projects. Under the patient fund scheme whereby long gestation infrastructure projects are financed.
"Our commitment to provide improved connectivity to the North-East is underscored by earmarking an amount of Rs.3,000 crores for this region. We plan to develop expressways alongside the industrial corridors. The first step would be to prepare projects and we will spend Rs.500 crores on it."
We understand that the road transport ministry is rolling out e-tags system for toll collection across all national highways very shortly. How many toll plazas are currently there in the country and how many of them will get e-tags initially?
The e-tags system for toll collection across all national highways is under active consideration of the government. Once agreed upon in principle, it may be introduced in phased manner.
The whole country in general and you in particular were saddened by the untimely demise of Munde ji in a road accident. Would you like to initiate a drastic overhaul of 26 years old Motor Vehicle laws with new one based on technology interventions to save precious lives? What would be the contour of new norms including important road safety and road design measures being incorporated in the new legislation?
My esteemed senior colleague and BJP's most popular leader in Maharashtra Shri Gopinath Munde's untimely death in tragic circumstances was a rude shock to the whole country and to me personally. The unfortunate road accident in New Delhi area undoubtedly raised the question of road safety in the capital.
"Our ministry is in touch with some foreign governments for gaining long-term finances at attractively low interest rates by giving 26% equity stakes. The financing is expected to be worth Rs.100,000 lakh crore for upcoming projects."
The NDA government is very serious about road safety. We are studying internationally laid down laws and norms and will adopt the best practices in amending the existing Indian laws.
With a view to modifying laws covering road safety, we are currently studying automobile laws of countries like Britain, US, Canada, Brazil, and Germany and safety aspects and other issues relating to Indian Motor Vehicle Act will be brought in for amendment in the next session of parliament.
The amendments are expected to include new policy for use of bio-fuel including ethanol in cars, public transport and to promote safety on roads.
NBM&CW August 2014
