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Roads

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Roads

May, 2011

Sector Structure/Market Size

India has the world's second largest road network, aggregating over 3.34 million kilometers (km), as per the National Highway Authority of India (NHAI). About 65 per cent of freight and 80 per cent passenger traffic is carried by the roads.

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.

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 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.

Also, the World Bank has approved US$ 350 million loan to India to accelerate the development of Karnataka’s core road network through the Second Karnataka State Highway Improvement Project (KSHIP II). The Government of Karnataka has identified about 25,000 km of the most important traffic corridors and designated them as the state’s core road network.

The World Bank has pledged US$ 1.72 billion in loans to India, mainly for building 24,000 km of roads in rural areas. "It is the largest roads project to be approved by the bank," said Robert Zoellick, President, World Bank after a meeting with Mr Pranab Mukherjee, Union Finance Minister in Delhi. The global lending agency also pledged US$ 255 million to the first phase of a project that aims to mitigate effects of cyclones.

In what could come as a boost for construction companies, the road transport ministry plans to award projects covering 10,000 km of highways in 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,” said Mr C P Joshi, Minister of Road Transport and Highways.

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.

Road infrastructure in four districts of Arunachal Pradesh– Changlang, West Kameng, East Siang and West Siang – is up for a boost as the ministry of Development of North Eastern Region (DoNER) has sanctioned funds worth US$ 15.69 million for development of road network in the districts.