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Road Infrastructure in India

October, 2013

Introduction

India’s road network, spanning across 4.69 million km, is the third-largest road network in the world, next in line only to the US and China. The country relies heavily on its robust road network that carries almost 65 per cent of freight and 80 per cent of passenger traffic. National Highways (NH), under the jurisdiction of National Highways Authority of India (NHAI), constitute for almost 2 per cent of the network but carry about 40 per cent of the total road traffic.

Thus, India relies heavily on roads to move freight in the most cost-efficient and effective manner. The Indian Government intends to earmark US$ 1 trillion for infrastructure development over next five years. To speed-up the same, it is also trying to rope-in private investments through public-private partnerships (PPPs). The Government has been tweaking its policies to make the sector more investor-friendly.

Key Developments and Investments

Foreign Direct Investment (FDI) received in construction development sector from April 2000 to July 2013 stood at US$ 22.44 billion, according to Department of Industrial Policy and Promotion (DIPP).

  • Road development is a major priority in Northeast India. An investment of Rs 33, 688 crore (US$ 5.47 billion) has been earmarked for construction of 6418 km of roads in the region during the 12the plan period under the special accelerated road development programme (SARDP-North East) and Prime ministers package for Arunachal Pradesh. Mr Oscar Fernandes, Union Minister for Road Transport and Highways, has recently assessed the progress of National Highway works and has stated that around 2000 km of roads are sanctioned for 2013.
  • IL&FS Transportation Networks Ltd has recently bagged US$ 300 million-contract to build a six-lane highway that will connect an eastern industrial zone to mining districts such as Dhanbad, the nation's coal capital. The link is expected to help in effective evacuation of resources. The deal also marks private players’ faith in public works as the Indian Government has been implementing new policy measures, including a strategic shift in how projects are financed.
  • Meanwhile, Bihar State Road Development Corporation (BSRDC) has awarded a major road project for construction of 12km-long 4-lane elevated road corridor between AIIMS and Digha in Patna to a construction major. Once completed, the road will ease the traffic conditions in the region. The project was awarded to M/s Gammon India Ltd out of eleven bidders.
  • India and China have signed a bilateral pact on co-operation in the road transportation sector. The scope of the agreement includes management of road infrastructure technology, standards for highway construction and maintenance, road safety intervention strategies aimed at reducing death and injuries resulting from road accidents, etc. India also seeks assistance from China regarding how they deal with contractual issues and financing of highways build in public private partnership mode.