Friday, May 01, 2015

Funds, land acquisition issues rock Modi's ambitious Bharatmala highway plan

By Our Representative
The Narendra Modi government has said that it will be spending Rs 14,000 crore for the Prime Minister’s "ambitious" plan to complete the Bharat Mala project, linking Gujarat in the west with Mizoram in the east, but even before it could kickstart, doubts have been expressed about its costs. Meant to “garland” the territory of India, a recent estimate suggests that it would cost at least 53,000 crore or $9 billion.
A top New York-based media group, in a recent expert analysis has called the project as “simply too ambitious”, pointing out, “Building one kilometre of highway in India, according to industry estimates, requires a minimum of about Rs10 crore ($1.5 million). By that measure, constructing 5,300 kilometres of new highway will cost the government, somewhere around Rs 53,000 crore ($9 billion).”
“Presumably, the government will reach out to the private sector for additional funding, but there might not be enough appetite in India Inc. for such a project”, article says, quoting a top expert with the consultants, Deloitte Touche Tohmatsu, as saying, “Most of the funding will have to come from the government itself,” said Vishwas Udgirkar, a partner at consultancy firm.
“These routes will not see heavy traffic and that would mean that the private sector does not see potential”, the expert has pointed out, adding, “Putting out that sort of money won’t exactly be easy for the government either, which has been struggling to cut expenditure, and restrain the fiscal deficit.”
Pointing out that India’s road sector has itself been in a “complete mess”, the article says, “Until January 2014, as many as 161 projects — worth some Rs 83,000 crore — out of a total of 220 projects awarded under the public-private-partnership (PPP) mode were unfinished.”
And, it says, “between April 2014 and January 2015, the road ministry completed construction of only about 3,038 kilometres of road against a target of 6,300 kilometres.” Yet, it wonders why is the Modi government going ahead with planning to complete “construction of 30 kilometres of road per day for the next two years.”
Quoting yet another consultant, Vinayak Chatterjee, chairman at Feedback Infra, the article says, “There is a huge agenda already pending before the road sector both at the central and state level, including challenging areas such as the borders. The announcement of such a project could improve greater confidence if accompanied by scientific traffic flow estimates on the proposed alignment.”
Things are going to be easy another count, the article says: “The Government of India will have to acquire an enormous ribbon of land that could stretch across as many as 13 states. After beginning in Gujarat, the Bharat Mala project will cut through Rajasthan and Punjab.”
Then, it says, the highway will “cover all the Himalayan states—Jammu and Kashmir, Himachal Pradesh, Uttarakhand—before moving to Uttar Pradesh and Bihar”, and “finally touch northeastern states of Sikkim, Assam, Arunachal Pradesh, Manipur and Mizoram.”
The article quotes state roads secretary Vijay Chhibber as saying, “Our idea is to plan for a structured programme for building roads along our borders, especially the northern borders.” But it comments, “Acquiring land across such an expansive stretch won’t be easy. For India’s National Highway Authority, the lead government organisation for road construction in India, the inability to acquire land has been a massive problem.”
“During the review meetings, it is observed that the land acquisition is one of the reasons for delay of completion of projects”, the article further quotes Pon Radhakrishnan, minister of state for roads, as saying last month, adding, “Over 600 road projects in India are currently delayed due to land acquisition problems.”

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