- Dec 23, 2009
NEW DELHI: Eight years ago, the headline story from Bihar was the gruesome murder of IIT-Kanpur engineer Satyendra Dubey, who blew the whistle on corruption in road projects.
Today, the same state is attracting private funds in the same sector, a complete turnaround after six years of Chief Minister Nitish Kumar's rule.
These investments are even more remarkable because two of these projects will be toll roads, where the operator has to be confident of his ability to collect toll, a confidence that was lacking during Lalu Yadav-led RJD's 15-year reign.
That's not all. Officials of the Bihar State Road Development Corporation now keep tabs on how projects are progressing using smartphones running Google's Android OS, from their offices in district headquarters. Bihar is the first state in India to put mobile technology to this use.
Of the two private road projects, the first is a Rs 1,602-crore project to build a 5.5-km bridge across the river Ganga, connecting Bakhtiyarpur with Shahpur along with a four-lane 45.5 km approach road. The second is a Rs 917-crore project to widen the twolane road between Ara and Mohania into a four-lane one.
"These two projects will substantially improve connectivity in the state," Bihar Deputy Chief Minister Sushil Kumar Modi told ET.
"Bihar isn't what it used to be," said Ullhas N Bhole, vicepresident, Atlanta Infrastructure, which has bagged the Ara-Mohania project.
Bihar has constructed 23,606 km of roads since 2006-07, apart from augmenting and repairing 1,657 km of national highways. All these projects involved annuity payments because private builders were not ready to build toll roads, fearing they wouldn't be able to collect fees from users. "The law and order situation is good and we do not see any problems in collecting toll," said Bhole.
"The Public-Private Partnership Approval Committee under the finance ministry has given its nod to the Ganga project," a finance ministry official said. The project had to be approved by the finance ministry as it needed some viability gap funds from the Centre.
North Block will cough up Rs 277 crore for the Ganga bridge project. The request for quotation floated by the Bihar State Road Development Corp had received just four proposals in 2008. But this time, 16 private companies were willing to take up the project.
Data from the Central Statistical Organisation shows Bihar's GDP grew by 11.03% between 2004-05 and 2008-09. The state announced a new industrial policy and has decided to restructure the state electricity board. Under Kumar's administration, investors are queuing up to make the most of the growth story that's being scripted through better governance and law and order.
"There is a lot of investor interest in projects. The plan is to ensure that Patna, the state capital, can be reached in not more than six hours by road from any place in Bihar," said state road construction Secretary Pratyaya Amrit.
Developers are confident of being able to collect tolls and Bhole said lenders are excited about the project and more than willing to arrange the funds. The Ganga bridge project, being built by the Navyuga Group of Hyderabad, has achieved financial closure.
The massive effort to build and improve roads is reckoned to be one of the main reasons behind the landslide victory of the JD(U)-BJP coalition in last year's assembly elections. The improvement in law and order has helped restore business confidence in the state.
So far, most investments have come from state funds. In the current fiscal too, the state plans to spend Rs 3,550 crore on road development.
Between 2003 and 2008, the length of roads has grown at an annual clip of 8.8%, more than double the national average of 4.1%.
Fertiliser major Indian Potash has decided to build a Rs 300-crore sugar plant in Muzaffarpur district and cigarettes-tohotels conglomerate ITC has set up a dairy project in Munger. Nearly 30 food processing units, including three biscuit units of Britannia, Parley and Anmol, are ready to begin production.
The state has unveiled a new policy, 'Aao Bihar' (Come to Bihar), to make sure businesses do not run into land issues.
Developers, investors queuing up to make the most of the growth story in Bihar