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October, 2010

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 (kms). 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.

The Ministry of Road Transport and Highways has constructed the highest length of National Highways (NH) in 2009-10 since the inception of NHDP. It has completed 5,010 km at the rate of 13.81 kms per day. While in 2008-09, 4,490 kms (12.31 km per day) of NH was constructed, the same was 3,683 kms in 2007-08 and 2,386 kms in 2006-07.

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 (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.

Private Sector Investments

Foreign funding will account for about 20 per cent of the total private sector investment in the construction of NH, according to Mr Kamal Nath, Union Minister for Road Transport and Highways. During an industry event on July 5, 2010, Mr Nath said the estimated total spend in the road sector in next five years would be about US$ 90 billion, half of which would come from the private sector.

  • 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.