66,100 km of national highways to be constructed
India with a total road network of 5.5 mn comprises of national & state highways and urban & rural roads. National highways account for 2% of the total road network and carry over 40% of total traffic.
The construction of highways reached 9,829 km during 2017-18, with an all-time high average pace of 27 km per day. This represents 20% growth over 2016-17, when 8,231 km of highways were constructed. During 2017-18, 17,055 km road length was awarded as against 15,948 km in the previous year. The construction of national highways entailed an expenditure of $ 18 bn during 2017-18.
India has a well-developed framework for Public-Private-Partnerships (PPP) in the highway sector. Asian Development Bank ranked India at first spot in PPP operational maturity and also designated India as a developed market for PPPs.
The Government of India (GoI) is planning to expand the national highway network to over 200,000 km. The Government launched the Bharatmala Pariyojana, which aims to build 66,100 km of economic corridors, border and coastal roads, and expressways to boost the highway network. It is envisaged that the programme will provide 4-lane connectivity to 550 districts, increase the vehicular speed by 20-25% and reduce the supply chain costs by 5-6%. The first phase of the programme will bring in $ 82 bn investments by 2022 for the development of 34,800 km of highways.
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Avg. highway constructed per day
National highway construction
% of GDP on logistics & transportation
Projects awarded under PPP
$ 82 bn to be invested by 2022 under Bharatmala Pariyojana
Highest ever construction of 133 km per day of rural roads in 2016-17
National highways construction in India is targeted at 40 km a day in 2018-19
The government plans to invest $ 22.4 bn towards road infrastructure in the North-East region of India during 2018-2020.
The market for roads and highways is projected to exhibit a CAGR of 36.16% during 2016-2025, on account of growing government initiatives to improve transportation infrastructure in the country. Almost half (742) of the 1,531 PPP projects awarded in India until March 2018 were related to roads.
The highways sector in India has been at the forefront of performance and innovation. The government has successfully rolled out over 60 projects worth over $ 10 bn based on the Hybrid Annuity Model (HAM). HAM has balanced risk appropriately between private and public partners and boosted PPP activity in the sector.
Asset recycling, through the toll-operate-transfer (ToT) model has been taken up by the National Highways Authority of India (NHAI) for 100 highways. The first bundle of 9 highways with an aggregate length of about 680 km was monetized successfully for an investment of $ 1.45 bn.
$ 100 bn allotted for infrastructure in budget 2018-19
Length of national highways to reach 200,000 km
Production of all vehicle segments reached 26 mn
Standardizes process for bidding and tolling
Spanish infrastructure firm Abertis Infraestructuras SA has agreed to buy two operational toll road assets in south India from Macquarie Group Ltd for about $ 150 mn
A consortium of investors led by Goldman Sachs Inc has agreed to invest $ 220 mn in Essel Highways, the road infrastructure holding company of Subhash Chandra controlled Essel Group.
Brookfield Asset Management made its first significant investment in Indian infrastructure, buying six roads and three power projects from Gammon Infrastructure Projects Limited for $ 1 bn.
I Squared acquired 100% of Jaipur Mahua Tollway Pvt Ltd (JMTPL) from Malaysia-based IJM Corporation for about $ 85 mn.
66,100 km of national highways to be constructed
Hybrid Annuity Model (HAM), Toll-Operate-Transfer (TOT)
NHAI facilitating the availability of FASTags for electronic toll collection
To improve more than 49,260 km of arterial routes of NH netw…
Bharatmala Pariyojana is a new umbrella program for the high…
National Highways Authority of India (NHAI) is monetizing pu…
Ministry of Road Transport and Highways has taken up an ambitious Special Accelerated Road Development Programme (SARDP-NE) for development of road network in the north eastern States of the Country. This programme envisages providing road connectivity to all the district headquarters in the north eastern region by minimum 2 lane highway standards apart from providing road connectivity to backward and remote areas, areas of strategic importance and neighbouring countries.
The Ministry of Road Transport and Highways, Government of India plans to implement 'Value Engineering Programme' in order to promote use of new technologies and material in highway projects being executed in India.
Government of India has set up the India Infrastructure Finance Company Limited (IIFCL) to provide long-term funding for infrastructure projects. IDF income is exempt from income tax. In May 2018, IIFCL Mutual Fund launched infrastructure debt fund (IDF) scheme with Corporation Bank, Oriental Bank of Commerce & IIFCL as investors and Canara bank & HUDCO as strategic investors.
Companies enjoy 100 per cent tax exemption in road projects for five years and 30 per cent relief over the next five years.
Companies have been granted a capital of up to 40 per cent of the total project cost to enhance viability. The GST on construction equipment has been reduced to 18 per cent from 28 per cent, which is expected to give a boost to infrastructure development in the country. Infrastructure finance companies, such as India Infrastructure Finance Corporation (IIFCL), National Highways Authority of India (NHAI), Housing and Urban Development Corp (HUDCO), Power Finance Corporation (PFC) and India Railway Finance Corporation (IRFC), have been permitted to issue tax-free bonds for a total value of $ 3.27 billion for FY15, promotion of infrastructure debt funds is the top agenda.
The Prime Minister’s Gram Sadak Yojana (PMGSY) is a scheme for development of rural roads in India. The Government of India has succeeded in providing road connectivity to 85 per cent of the 178,184 eligible rural habitations in the country under the scheme. All villages in the country are expected to be connected through a road network by 2019, as against 2022 previously, under the PMGSY.