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January, 2011

Sector Structure/Market Size

As per the National Highway Authority of India (NHAI), the country has the world's second largest road network, aggregating over 3.34 million kilometers (km). About 65 per cent of freight and 85 per cent passenger traffic is carried by the roads. According to Crisil Research’s annual review of the roads and highways sector published in August 2009, the potential investment in the sector is expected to be to the tune of US$ 107 billion between 2009-10 and 2013-14.

Growth Potential

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.

This Ministry of Road Transport and Highways has constructed the highest length of National Highways in 2009-10 since the inception of NHDP. It has completed 5010 km at the rate of 13.81 km per day. While in 2008-09, 4490 km (12.31 km per day) of National Highway was constructed, the same was 3683 km in 2007-08, 2386 km in 2006-07 and 3778 km in 2004-05.

Further, The NHAI has completed 85 per cent (2693 km) of the total length of 3165 km of National Highways under NHDP targeted for completion in 2009-10.

The work on five major National Highway (NH) projects in Orissa, Bhubaneswar-Puri, Bhubaneswar-Sambalpur, Bhubaneswar-Chandikhole, Sambalpur-Bargarh and Remudi-Rajamunda (NH-215) will begin 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 Cabinet Committee on Infrastructure (CCI) has approved 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 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.

According to the Press Information Bureau, the Cabinet Committee on Infrastructure (CCI) on October 5, According to the Press Information Bureau (PIB), the Cabinet Committee on Infrastructure (CCI) on October 5, 2010 approved the implementation of the sub-project for the development of four laning of the 84 Kms. Along Panvel-Indapur Section of NH-17 in Maharashtra under NHDP Phase III in BOT (Toll) mode of delivery on Design, Build, Finance, Operate & Transfer (DBFOT) basis. The total project cost is estimated at US$ 212.4 million.

CCI also approved the implementation of the project of two laning of Aligarh-Kanpur Section of NH-91 in Uttar Pradesh under NHDP Phase IV A on DBFOT basis in (Toll) mode. The total project cost is estimated at US$ 165.5 million.

Rajasthan will get four new NH projects for a total length of 822 km with a total estimated cost of US$ 1.53 billion during the current year, stated Mr Mahadeo Singh Khandela, Minister of State for Road Transport and Highways, while addressing the press in Jaipur on September 15, 2010.

NHAI has approved the alignment of the proposed Vadodra-Surat-Mumbai Expressway passing through the State of Gujarat, Union Territory of Dadra & Nagar Haveli and the State of Maharashtra.

The National Highways Authority of India (NHAI) and the United Kingdom Trade and Investment (UKTI) have signed an agreement on Cooperation for Trade and Investment in the Roads and Highways Sector in India. The MOU envisages both the parties to work together on matters of mutual interest in road transport, highways and related services through consultation and exchange of information, best practices, sharing of technical expertise and experience and providing professional training on mutual basis in the field of motor vehicle testing, Driver training, delivering and maintaining highways network etc.

The Indian Roads Congress & the Ministry of Ecology, Energy, Sustainable Development and Sea, France have signed a Memorandum of Understanding (MoU) to promote international cooperation and to foster technical & scientific co-operation in the field of road policy, construction, maintenance and road transport.

Private Sector Investments

IVRCL Infrastructures & Projects Ltd (IVRCL) has bagged a toll road projects on the Goa-Maharashtra border from the NHAI. The project entails a total investment of US$ 659.1 million.

Ramky Infrastructure Ltd has signed a concession agreement for the US$ 248.3 million four-laning project in the Srinagar-Banihal section of the NHAI. The project is being implemented by a consortium comprising a joint venture between Ramky Infrastructure Ltd, which has 74 per cent stake, and Jiangshu Provincial Transportation Engineering Group Co Ltd, China, with 26 per cent.

Anil Dhirubhai Ambani (ADA) Group-promoted Reliance Infrastructure has won a road project worth US$ 197.3 million from the NHAI.