Indian Roads Thread

Discussion in 'Politics & Society' started by Daredevil, Jun 28, 2009.

  1. Daredevil

    Daredevil On Vacation! Administrator

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    India eyes huge rise in road building

    By Joe Leahy in Mumbai

    Published: June 22 2009 19:02 | Last updated: June 22 2009 19:02

    India’s Congress party-led coalition government is planning to invite foreign investors to participate in an ambitious move to increase road construction 10-fold as the country seeks to boost much-needed infrastructure development.

    Kamal Nath, India’s new road transport and highways minister, said he planned to set up a government “roads finance corporation” that would securitise its income and potentially list on the stock market to raise funds for his ambitious plan.

    “The roads are in a mess,” Mr Nath told the Financial Times in an interview.

    “At the moment, we’ve been struggling with [building] 2km a day – I’ve set a target for 20km a day ... we are going to work towards that.”

    Bureaucracy and land disputes have so far curbed India’s efforts to improve its crumbling road network, even as its neighbour across the Himalayas, China, has built super-highways criss-crossing the country.

    However, the return last month of the Congress party-led ruling coalition with an overwhelming majority has created the opportunity for an infrastructure programme of historic proportions, similar to the pre-war highway construction boom of the US.

    PwC, in a report titled “Infrastructure in India – a vast land of construction opportunity”, says India is targeting investment in roads of $92bn in the five years to 2012.

    The central government is inviting bids for more than 200 national highway projects, the equivalent of 13,000km of road.

    About one quarter of these projects, with an aggregate length of 3,000km, were already at the pre-qualification stage for tenders. In addition, state governments are planning to tender 4,500km of roads by 2010.

    Analysts said that, while the programme was laudable, the key was implementation.

    India’s road-building programme in recent times has been disrupted by factors such as frequent changes of leadership at the National Highways Authority.

    “They need to be ambitious and, more importantly, they need to focus on execution,” said Arvind Mahajan, infrastructure and government national industry director at KPMG.

    Mr Nath said the new roads finance company would be able to draw on the government’s Rs100bn ($2bn) in annual earnings from a tax on fuel sales as well as budgetary allocations of about Rs40bn and other income of about Rs60bn.

    He said the government would raise international financing for the corporation as well as investment from pension funds and others interested in the long-term returns offered by infrastructure.

    “I will do a roadshow in the next two months, all over the world, to attract funds for this,” he said.
     
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  3. NikSha

    NikSha Regular Member

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    What? They were sleeping up until now? F**ing corrupt politicians, steps like these should've been taken ages ago.

    But then again, ages ago there was Left controlling their every move so hard to tell what was going on.
     
  4. p2prada

    p2prada Stars and Ambassadors Stars and Ambassadors

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    Hope Kamalji will talk less and do more.
     
  5. Daredevil

    Daredevil On Vacation! Administrator

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    If the UPA govt. pulls this off, it will be a massive stimulus to the domestic growth of our country by providing employment opportunities to millions of people and also improve our surface transport conditions both passenger as well as goods.
     
  6. Rage

    Rage DFI TEAM Stars and Ambassadors

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    I believe this is the key:


    Here's a supplementary article from the India-Briefing blog:


    India Road Infrastructure to Develop Tenfold, Foreign Investment Welcome


    [​IMG]


    Jun. 25 - Kamal Nath, the recently appointed as minister of road transport and highways, has publicly acknowledged that India’s roads are a mess says that opening up the sector for massive investment and infrastructure spending as a key area for development.

    Noting that currently India builds just two kilometers of highway every day, Nath has set a target to increase this to 20 kilometers a day and has established a new financial body, the Roads Finance Corporation, to increase road construction through securitizing the required income and possibly list on the Bombay Stock market to raise funds. The new government has earmarked US$92 billion for road and highway construction with immediate effect until 2012, while the government is inviting bids for over 200 national highway projects covering over 13,000 kilometers of road at this moment.

    The Indian government intends to finance the construction of India’s new roads and highways by raising financing from the overseas, including pension funds and long term investors, in addition to opening up the sector to foreign development and participation. Funding from India’s road tax and fuel sales taxes, in addition to budgetary allocations would also assist the construction. The scheme has been likened in size to the post-World War II highway construction boom that occurred in the United States.


    India Road Infrastructure to Develop Tenfold, Foreign Investment Welcome | India Briefing News
     
  7. ZOOM

    ZOOM Founding Member

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    We have set a target of investing upto $500 billion in overall Infrastructure of our country. Because of Economic downfall, it is highly difficult to pieace together a kind of a fund which is half of the countries GDP, as many Private and Public companies are finding it difficult to raise the fund through conventional means. Although our capital market is now in a bull phase, but still many companies in infrastructure space are still fearfall of committing massive fund for any infrastructure project. Government need to amend various provision which can enable this companies to raise a necessary fund either by changing some provisions in capital market or giving Tax rebates to this companies to give them a breather in case of economic downsizing.
     
  8. fateh71

    fateh71 Regular Member

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    Historically roads have been path to progress. Even though its a pity that we have not gone all out on the road to infra development when right next door (south east asia, china, korea, taiwan, japan etc) they did it for decades and decades and enjoyed instant fruits.

    Our responsibility too to spread awareness about it among our countrymen.
     
  9. Yusuf

    Yusuf GUARDIAN Administrator

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    I just read a report a few days back that the govt has set a target of investing $500 billion on infrastructure development. The icici chairman put it at $750 billion.

    That kind of investment will see India do what China did and that has taken them places.
    It is the best stimulus for the economy. Infact it's more than a stimulus. It will be kind of a revolution.
     
  10. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    zoom, i was recently listening to mr narseemonjee and he was pointing out that the infrastructure sector is seeing adequate funds for projects which have been well planned, and implemented and there are only some 15-20% of the projects that have seen the rough road since they were ill conceived and are now finding it difficult to make the ends meet, though the interviewer did not get into specifics so i cant get into details.

    five years of t r ballu were a total disaster for the sector when hardly any work was done and this came out as a major hindrance in the getting over with the massive bottlenecks which exist in the sector and it was high time to get a person at the helm of affairs who could get the things moving and kamal nath does present hope just the way kapil sibal has come as a fresh breeze of air for the education sector. kamal nath did decently well for the commerce and trade the results of which we saw with the exports of india growing almost four fold in the last 5years which certainly argues well for him since the challenges that await him in getting the road network moving in the country are huge. if he can pull this off well then i am sure growth rate of 10% and more is not far off and may be if the things improve on the international level we could see the same by 2011 and beyond.
     
  11. Pintu

    Pintu New Member

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    That is surely a great news , and will be very pleasant when the plan materializes in time , the transport infrastructure , specially Road Transport infrastructure , needs a huge upliftment to make our country rule the world economically.

    Regards
     
  12. Yusuf

    Yusuf GUARDIAN Administrator

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    The whole gamut of infrastructure is important. World class Roads, ports, airports, rail network, urban infrastructure etc.. It has a ripple effect on the whole economy. Jobs, ancillary industries etc adds to the economy. We can easily grow at 10% if there is sustained development of infrastructure.
     
  13. Arjak

    Arjak Respected Member

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    Talking bout infrastructure,the wb govt offered us wide footpaths in kolkata and suburbs surrounding it at many places.......but after 1 yr we have all kinds of hawkers occupying them,even small sheds for people to live in there and what not.......which again leaves people to walk on the main road,which congests city traffic........we are again back to where we were 5yrs ago........not that there's no development,but still.......,..
     
  14. p2prada

    p2prada Stars and Ambassadors Stars and Ambassadors

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    We have to primarily work on our power sector. The rest will fall in place if we have enough or even surplus power. Generating enough power will attract huge FDI in manufacturing.

    If we have infrastructure, then we can grow beyond 10%. Our agriculture sector will itself get a big boost if they get uninterrupted power the entire day rather than the 17 hours of power cut everyday. Right now, the agri growth is less than 4%. Pushing it past 8% will........
     
  15. Yusuf

    Yusuf GUARDIAN Administrator

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    Yes, i forgot to mention power there when it's the key. Yes we can grow well beyond 10 if we can put in all our energy to develop infrastructure.
     
  16. Daredevil

    Daredevil On Vacation! Administrator

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    India Plans to Build 12,000 Kms of Highway This Year

    MUMBAI -- India's federal government expects to invest 1 trillion rupees ($20.61 billion) to build 12,000 kilometers of highway in the year through March 2010, Minister of Road Transport and Highways Kamal Nath said Friday.

    Mr. Nath said the government will also seek to raise $10 billion from overseas investors over the next 30 months to build roads and highways.

    He, however, said the National Highways Authority of India - the state-run agency that runs the highway building program - doesn't plan to borrow this fiscal year, as it is adequately funded.

    NHAI chairman Brijeshwar Singh said the agency is planning to invite bids worth 605 billion rupees over the next six months for building 6,563 kilometers of highway.

    India has earmarked big ticket spending to develop its potholed roads and clogged ports to aid the economy gallop back to an at least 9% annual growth rate.

    India's gross domestic product grew 6.7% in the financial year ended March 31, falling from an average of more than 9% in the previous three years.

    Mr. Nath said the government will focus on the toll model for these projects and the "(ministry's) objective is to be able to build up specialized tolling companies, like in Western companies."

    "Sixty percent of the total road projects will be on toll basis and the first preference for all road projects will be for ones with toll models," Mr. Nath said.
     
  17. ZOOM

    ZOOM Founding Member

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    As far as track record is concerned, it is highly unlikely that India would be able to achieve some uphill task. One of the most biggest constraint in any of such project is of pieacing togther enough fund and aquisition of proper land which often subject to Environmental clearance and rehabilition of effected people. Even Private companies are reluctant to take the project despite having enough liquidity to undertake a project. In a previous financial year, out 60 project for bid, only 22 project were approved to be undertaken by Private devlopers, as many back off from undertaking any of such project because of uncertainEconomic environment.

    Building 12000km road in a single year translate into target of building upto the lenght of 32km of Road everyday which is highly unlikely to be achieved. What is need of hour is to carry on existing ongoing project and bring them towards the target of completion before committing such over ambitious task.
     
  18. vish

    vish Regular Member

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    Does this not create employment opportunities for many?
     
  19. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    zoom,

    india will not be adding additional 12,000kms of road network this fiscal but this will be an upgrade of state highways to national highways and addition as in new roads built, together that will account for the figure – source ET.

    india effectively will be doing some 36,500kms in the next 5yrs which would mean something like an addition of 20kms/day, the pace of which will pick in the latter half of the upa regime. the present rate that we are doing is 2kms/day and as per kamal nath on ndtv, he does not expect any big jump to this rate with in this fiscal.

    this is seriously a herculean task ahead for which kamal nath and his team are into a planning mode right now where timelines for land acquisition, bidding and building targets are being set on individual heads, sources from where money needs to be generated is being looked into for which he plans to do road shows all over the world (he is heading to hong kong, singapore, the us and europe). all this is unlike previous years where there was only intent and no thorough plans, checks and counter checks put in place.

    i am sure they would be working more corporate like, that is what kamal nath sounded like and if he and his team can pull this off, then he and his team would have done the nation a great service, and seriously all this is by no means is impossible, the only thing that needs to be in place till the very last is the resolve of achieving what they have set out to do, and just in case they fail in achieving the target of 20kms/day still they would have raised the bar because what we are pointing out to is an average of 20kms/day and to achieve that, in the latter days of the present govt the per day figure should be much higher than 20 which in it self would be a big achievement, which would be a great stepping stone for the the next incumbent.

    in case we are able to do the targeted figure, just that alone would add more than 2% to the annual growth rate figures as per kamal nath, which means if we were doing say 8%, we could jump to 10% real growth rate.

    ----------------------------------------

    there is another news related to infrastructure, on sea ports : Top global firms eye India port plans: Secretary- Infrastructure-Economy-News-The Economic Times

    finner points:

    1 India would build 50 new ports over the next five years

    2 India has 12 major ports, where ships load and unload three-quarters of the country's annual traffic of 723 million tonnes. The rest is handled at 200 smaller ports

    3 Cargo traffic at major ports in India rose 2.1 percent in 2008/09 to 530.4 million tonnes, compared with a 13.9 percent rise a year earlier when external trade was booming

    4 foreign investment in the sector was $493 million in 2008/09, nearly half of the flow in the previous year, a recent government report said

    5 country would double port capacity to 1.5 billion tonnes by March 2012, when cargo traffic would also have doubled to 1 billion tonnes.

    6 shipping ministry has said six port projects worth 33.2 billion rupees, which will increase capacity by 31.2 million tonnes, are set to be awarded

    7 the government would spend about 450 billion rupees on fleet expansion and inland waterways by March 2012

    8 Shipping Corp of India's plans to buy 32 vessels this fiscal year
     
  20. Energon

    Energon DFI stars Stars and Ambassadors

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    There's one extra aspect I'd like to add here which I wish would also become a part of the larger debate. In addition to merely facilitating the construction of vast road and highway (R&H) networks, there has to be serious consideration given to the ecological impact of the various projects.

    Just to give you one anecdotal example...I was recently doing some rain forest treks in Costa Rica and had an opportunity to see the wonders that country has done with eco tourism despite having meager resources. The government of Costa Rica after having secured soft loans from the US built a few highways back in the 80s. By the late 90s when an eco friendly wildlife recovery program was in full flow it was discovered that the only way to conserve this vast wealth of biodiversity and the massive tourism industry it supports was by linking various (rapidly shrinking) bio reserves to one another through "corridors". The highways as it turns out had effectively cut many of these priceless ecosystems in to detached sections making them vulnerable to a cataclysmic collapse. They hence had to retroactively transect parts of the highway systems and create low lying corridor systems for the animals to pass. This took up quite a bit of time and a lot of money. But the government of Costa Rica has taken up this project in earnest and will undoubtedly reap the benefits. The ecotourism industry in that nation has risen exponentially since 1994 and has surpassed the agricultural sector (with a turbulent history of cash crop production) to become the greatest source of foreign exchange, foreign investment and overall GDP.

    The only advantage of not having an infrastructure worthy of mention is that you can learn from others and not repeat their mistakes when you do build one.

    India despite having a far more impressive ecosystem than Costa Rica (which it seems intent upon ignoring into oblivion) may never go on to rely upon ecotourism to that magnitude. It can nonetheless invest in this sector to a great degree and enjoy its returns. However in order to attain this goal successfully, they have to show great foresight now and take into account ecological preservation before building an infrastructure as opposed to salvaging it at a later date and losing a priceless natural resource in the bargain.
     
  21. Rage

    Rage DFI TEAM Stars and Ambassadors

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    Let’s have our decade of infrastructure, Nath says

    In his new job, Nath also wants to be seen as a go-getting minister.
    So he was forthright in laying out the vision for his ministry


    Samar Srivastava


    New Delhi: With infrastructure being a key roadblock in India’s quest to achieve rapid economic growth, Kamal Nath, minister for roads and highways, knew investors would be keeping a close eye on his session at the India Economic Summit on India’s New Highways.

    Nath didn’t disappoint. Making good use of his plain-speaking skills—which were put to ample use in his last job as minister for commerce and industry—he was blunt in stating the challenges he faces. “We’re not only the world’s largest democracy. We are also the rowdiest,” he said.


    [​IMG]
    Plain-speaking: Kamal Nath at the India
    Economic Summit. Ramesh Pathania / Mint



    In his new job, Nath also wants to be seen as a go-getting minister. So he was forthright in laying out the vision for his ministry.

    “We had our decade of information technology, now let’s have our decade of infrastructure,” he said.

    As a first step, Nath wants to make sure he achieves his target of building 20km of roads per day. It’s an ambitious target as by Nath’s own admission, his predecessor only managed to lay between 2km and 2.5km a day. Nath says he’s already started making progress and should get to his target by March. For him to achieve his aim of building 7,000km of roads by the end of next year, his ministry needs to have 20,000km as work in progress.

    To get there, the ministry plans to award $20 billion (Rs93,600 crore) worth of contracts for national highways across the country in the next eight-nine months, 85% of which would be given to concessionaries in the private sector.

    Among the many problems that trip up the timely completion of road building projects is land acquisition, and Nath said he’s moved to put in a system that has reduced the time taken to buy land from 18 months to eight.

    He’s also moved to stop awarding projects where less than 80% of land has been acquired by his ministry.

    Panellists sharing the dais with Nath noted that he’s managed to get things moving again. “The minister has been able to bring an attitudinal change,” said Harpinder S. Narula, chairman, DSC India, an infrastructure firm.

    Still, there are several issues that could trip up this expansion in India’s highway network.

    Termination clauses in contracts have been amended.

    Project costs are often inaccurately estimated. Nath noted that he has made his displeasure known to the consultants who made these assessments.

    “There are huge risks for developers. All that’s needed is a gentle tweaking of agreements to set the balance right,” said David Birch, managing director, Halcrow Consulting India Pvt. Ltd, which advises on highway design.

    Dispute resolution is often a problem. It’s a long and arduous task but Ajit Gulabchand, chairman of Hindustan Construction Co. Ltd, noted that the private party usually wins against the government in such cases.

    With road building identified as a key thrust area for the United Progressive Alliance government, Nath knows he has much ground to cover. “Wealth does not create roads, roads create wealth.”


    Let?s have our decade of infrastructure, Nath says - Economy and Politics - livemint.com
     

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