Roads in India

Further, the Government will undertake the upgradation of around 3,700 km of national highways (NHs) under the National Highways Interconnectivity Improvement Project (NHIIP) at a cost of about US$ 4.26 billion. According to official ministry sources, this project, to be executed by the Ministry of Road Transport and Highways, would involve double laning of single-lane highways in eight states in the next three years. Currently, about 30 per cent of the total NH network is still single-laned, 53 per cent double-laned and 17 per cent four/six/eight-laned.

NHAI has completed 99.2 per cent of construction work on the Golden Quadrilateral (GQ). Out of total length of 5,846 km of GQ project, 4 laning of 5,799 km has been completed. The target date for completion of GQ is December 2011.

Also, the World Bank has agreed to provide funds for the repair of four national highways, measuring 536 km, which pass through Bihar. The national highways which would be repaired using the World Bank funds are 177km-long NH-104 (Sheohar-Sitamarhi-Jainagar-Harhaia), 136km-long NH-106 (Bihpur-Birpur), 154km-long NH-98 (Anisabad-Aurangabad-Hariharnagar) and 69km-long NH-30A (Fatuha-Harnaut-Barh).

According to estimates, the road sector in India will require investments in the range of US$ 75-90 billion over the next five years.

India’s construction sector is expected to grow at about 35 per cent between 2008–09 and 2012–13. The private sector is expected to contribute 44 per cent of the total projected spend of US$ 100 billion on roads and highways over the Twelfth Five Year Plan period.

The Union Ministry of Road Transport and Highways plans to award projects covering 10,000 km of highways during 2011-12. About 80 per cent of these would be awarded on the build-operate-transfer (BOT) mode. “Our target is to award 59 projects covering 7,994 km on BOT (toll) mode. Another 1,000 km will be awarded on annuity and EPC and the remaining will be awarded by the state governments,” according to Mr C P Joshi, Union Minister of Road Transport and Highways.

The Indian government has launched the ambitious National Highway Development Programme (NHDP) involving a total investment of US$ 50 billion on concessions/contracts to be awarded by 2012.

Under this programme, a length of about 15,000 km has already been completed and about 10,000 km is under construction. Over the next three years, it is proposed to take up new sections of about 25,000 km, through a combination of PPP (Public Private Partnership) and EPC (Engineering Procurement and Construction).

To accelerate the pace of NHDP, the Union Government has entered into MOUs with some State Governments who will undertake PPP projects on behalf of the Union Government. A number of projects are in different stages of bidding and award. Based on competitive bidding, up to 40 per cent of the project cost is being provided as viability gap funding for National Highways Projects.

The work on five major NH projects in Orissa, Bhubaneswar-Puri, Bhubaneswar-Sambalpur, Bhubaneswar-Chandikhole, Sambalpur-Bargarh and Remudi-Rajamunda (NH-215) began in February 2011. The work is being taken up on the Public Private Partnership (PPP) mode and the cost assessment will be made by NHAI.

The government has also started the Bharat Nirman Programme that aims to cover every village having a population of over 1,000 or over 500 in hilly and tribal areas, with all-weather roads.

The Cabinet Committee on Infrastructure approves various road projects in the country. Some of the recent projects being approved by the Committee include:

• The project of four laning of Vijayawada-Machlipatnam section of NH 9 in Andhra Pradesh under NHDP Phase IV-A on DBFOT basis in BOT (Toll) mode of delivery. The total estimated cost of the project is US$ 149.8 million out of which US$ 26.5 million will be for land acquisition, resettlement and rehabilitation and pre-construction.
• Four/two laning with paved shoulder of Birmitrapur-Barkote section on NH23 in Orissa under NHDP Phase IV-A on DBFOT basis in BOT (Toll) mode of delivery. The total project estimated cost of the project is US$ 223.7 million out of which US$ 65.3 million will be for the land acquisition, resettlement and rehabilitation and pre-construction.
• The project for the development of four laning of 45.43 km long Nagpur - Wainganga Bridge section on National Highway-6 in Maharashtra under NHDP Phase III on Design, Build, Finance, Operate and Transfer (DBFOT) basis in BOT (Toll) mode of delivery. The total project cost is estimated at US$ 131.8 million under DBFOT pattern.
• The project for six-laning of the 122.88-km-long Barwa Adda – Panagarh section on NH-2 in Jharkhand and West Bengal in Design, Build, Finance, Operate and Transfer (DBFOT) mode. The total project cost is estimated at US$ 461.03 million.
• The implementation of the project for the development of four-laning of the Jabalpur-Lakhanadone section from 465.600 km to 546.425 km on National Highway 7 in Madhya Pradesh.
• The project for the development of four laning of Panikoili – Rimuli section on National Highway NH 215 in the state of Orissa under NHDP Phase III on DBFOT basis in BOT (Toll) mode of delivery. The four laning of the 163 Km. stretch of NH 215 will cost US$ 370.7 million.

According to the newer policy updates from DIPP, 100 per cent FDI under the automatic route is allowed for:

• Support services to land transport like operation of highway bridges, toll roads, and vehicular tunnels
• Services incidental to transport like cargo handling incidental to land transport
• Construction and maintenance of roads, bridges
• Construction and maintenance of roads and highways offered on build-on-transfer (BOT) basis, including collection of toll

Highway widening projects will now qualify for the 10-year tax break under Section 80 IA of the Income-Tax Act. The Central Board of Direct Taxes (CBDT) has clarified that widening of existing roads by constructing additional lanes as a part of a highway project, by an undertaking, will be regarded as a new infrastructure facility. This clarification will help highway developers receive tax deduction for a 10-year period under Section 80IA of the Income-Tax Act

Source: Consolidated FDI Policy, Department of Industrial Policy & Promotion (DIPP)