THE year: 2010. The place: a six-lane expressway somewhere between Mumbai and Delhi. You are cruising in your luxury car at 120 km an hour. The road is as smooth as silk, the overhead signs are clear, there are no demonic trucks roaring towards you, and you are not worried about traffic bottlenecks or having to frequently hit the brakes. You are probably whistling a tune.
Sounds like a scene from a Hollywood movie transplanted in India? It would be a reality if the government goes ahead with its plan to construct a cross-country high-speed, toll-paid, access-controlled, six-lane expressway spanning 7,000 km running from Kashmir to Kanyakumari and from Silchar to Saurashtra at a projected cost of Rs 28,000 crore.
Forget driving pleasure, Prime Minister Atal Behari Vajpayee's dream project, when completed, will revolutionise road transport in India, spur other infrastructure, spark off small business along the route, create millions of jobs and change parts of rural India forever. In fact, the expressway project, a concept new to a country which still only has a handful of national highways, has the potential to put India on that elusive 10 per cent growth path.
Vajpayee will lay the foundation stone for the project in Bangalore on December 30. To be built on international models away from town traffic, the expressways will offer alternative routes between important towns. They will be access controlled, which means that entry into these would be strictly controlled, ensuring a smooth, congestion-free and non-accident-prone driving zone and cutting driving time by 30 per cent.
Work on the project is slated begin simultaneously in 20 centres, the names of which will be finalised at a meeting of the task force on infrastructure on November 28. The National Highways Authority of India (NHAI) would be the nodal body to carry out the project at the operational level. A National Expressway Authority of India may also be set up.
At its last meeting on November 16, the task force set up a committee comprising finance secretary Vijay Kelkar, secretary in the PMO, N.K. Singh, and Infrastructure Development Finance Corporation chairman Deepak Parekh to work out the modalities of the project. A tentative list of 40 locations has been made on the recommendations of the ministry of surface transport, comprising state capitals, important towns and business hubs, and the "Golden Quadrangle" of the four metros. A parallel plan to construct five international airports beside the expressways is also under consideration. Says a top official in the surface transport ministry: "All through the Eighth Plan, the stress was on connectivity, without any attention to the quality of roads. Now that connectivity has been solved to some extent, quality will be the focus, and this can't be done without the private sector."
The project couldn't have come at a better time. Roads account for over 80 per cent of passenger traffic and over 60 per cent of freight traffic today. Since 1951, the average annual growth of road traffic has been about 8-12 per cent. While India's road network has grown almost seven times, motor vehicles population has grown 100 times to over 30 million. The pressure has resulted in acute traffic congestion, high levels of pollution and fuel wastage, increase in accidents and long delays.
Says surface transport minister M. Thambidurai: "The situation warrants some serious thinking. What is the point of allowing luxury cars if there are no fast lanes or proper roads to drive them in? There is no point redeveloping the overburdened highways and existing roads. Development of expressways on a priority basis is the only solution. That has been the solution the world over." Trucks, for instance, barely manage to travel 180-200 kms a day. On expressways, they can easily cover between 700 and 800 km.
That the government is serious about the project is clear from the attractive compensation packages it's ready to offer for acquiring land, the single most important hurdle in road projects. Says Thambidurai: "We are even ready to provide employment to these people apart from compensation. We want this to work, and fast."
BUT the cost factor could become a serious worry. Roads have attracted little private investment so far because of the long gestation period of the projects and uncertainty of returns. Not this time, says Thambidurai. "In the absence of the expected response for BOT (build-operate-transfer) projects, we have decided to offer 100 per cent equity as well as give private entrepreneurs a free hand in toll collection. Other incentives are also being worked out." The Centre may also allow development of real estate, commercial complexes and petrol pumps alongside the expressway to make the package more lucrative.
Even as the high-powered committee has been asked to explore innovative financing avenues, the government plans to get budget support to finance a major part of the project. Another funding source is the road development cess, which has already been levied on petrol and may be extended to diesel. That could well yield a substantial Rs 3,000 crore every year. There's also a plan to tax land developers who might want to promote real estate close to the expressways, as well as the automobile sector. Bonds can be issued at a later stage.
The involvement of the state governments is also not ruled out. Says Thambidurai: "The states collect road and motor vehicle tax but the money never comes back to the sector. We will instruct the states to allocate more funds for the projects and put these collections to good use." The government has already asked the World Bank and the Asian Development Bank—the latter is already involved in many Indian road projects—for help.
Despite the multi-pronged plan, experts worry the project may not prove financially viable. Says former director general, roads, A.D. Narain: "The entire economics is wrong. Worldwide, the paradigm 'Roads first, economy later' is followed. Not here. Internationally, the GDP to transport sector growth ratio is 2:1; here, transport grows at 10-12 per cent a year, the GDP staggers at around 5-6 per cent."
It's quite possible that the government has not done its homework well. While even a developed country like France could manage to link only about 5,500-6,000 km in 20 years, India is ambitiously going ahead with 7,000 km to be completed in 10 years. Says an expert from the NHAI, which has apparently not been formally told about the project that they will be executing: "Given the state of government finances, it is difficult to say how the project will take off. Mere promises of toll collection will not work as paid roads are still a grey area in India. The private sector will not come in unless returns are assured."
Maintenance of the expressways is another tricky issue. Says Narain: "The minimum traffic required to maintain an expressway through tolls is about one lakh passenger car units (PCUs) per day. In India, despite free roads, it is less than 30,000 PCUs. Expecting returns on this is out of question." He also feels that the government is grossly underestimating the cost of the project. "The average cost of constructing an expressway is Rs 10 crore to Rs 12 crore per km, while we have taken a cost of only Rs 4 crore per km in a country where land acquisition, rehabilitation and environment clearances lead to cost overruns," he says.
Finances apart, the government could be trying to bite off more than it can chew with a first-of-its-kind project. Work on an expressway between Durgapur and Vadodara, proposed last year, has yet to begin and is now being worked into the current scheme. But once the initial hiccups are sorted out, the expressways might well become India's much-awaited high-growth path.
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