NHAI to have new wings for global projects, e-ways: Nitin Gadkari

Nitin Gadkari, the Union minister of road transport and highways, and shipping, says he would like to speed up the pace of work in the government. So, while he talks to Megha Manchanda & Jyoti Mukul  for an interview, he keeps a meeting of officials going simultaneously. What he shares is a lunch and the news that his ministry is set to enter the Guinness Book of Records for awarding 16,800 km of projects in a year. Edited excerpts:

Has there been enough investment pick-up in the highways sector? What would be the focus?

This is a record in itself, that we awarded 16,800 km of highway contracts till March. Second, road construction that was in the range of two km a day has been increased to 23 km a day. Currently, the total length of roads in the country is 5.2 million kms. Of this, 96,000 km are highways or two per cent of the total; 40 per cent of the country’s traffic is on this two per cent. We plan to take this 96,000 km to 200,000 km; of which, which 170,000 km have been declared national highways and the rest is under process. The aim is to have a four-lane road wherever the traffic is 10,000 PCU (passenger car unit) and a six-lane highway wherever it is 20,000 PCU. 

We have also decided to construct 13 expressways — we hope to inaugurate the Eastern Peripheral Expressway (EPE) this August 15. The expressway would bring down Delhi’s pollution and congestion by half. The other expressways include Delhi-Meerut, Mumbai-Vadodara, the Dwarka  Expressway (from Delhi), Bengaluru-Chennai and Delhi-Jaipur.

What happened to the earlier proposal for a separate Expressway Authority? 

Not an authority — we are thinking of setting up two subsidiaries of NHAI (National Highways Authority of India) — Express Highways and NHAI International. Many countries, including Sri Lanka and Nepal, have approached us for construction of highways in their countries. Within the Authority, we can have various Special Purpose Vehicles, on the lines of NHIDCL (National Highways and Infrastructure Development Corporation). NHAI International would execute projects in Sri Lanka, Nepal, Bangladesh, Iran and even some African nations. 

Indian Port Rail Company (IPRCL) is our entity for constructing port-rail and road-rail connectivity. The company executed projects worth Rs 30,000 crore in 2016-17 and by the end of the current financial year (2017-18) is likely to do another Rs 35,000- 40,000 crore. We are also doing about Rs 1 lakh crore worth of projects for the railways.

How much economic activity has been generated with these works? 

Our target is to award Rs 25 lakh crore worth of projects that would result in creating 25 million jobs. We have also designed a scheme which would provide employment to the local population where the project is being developed. We would provide Rs 10,000 (monthly) stipend to them; the contractor who would conduct their exam would also provide them with a sum.

Is land acquisition still a challenge?

As far as the Jaipur highway is concerned, the project was stuck for a while, which I cleared after several consultations with the banks. To complete work there, NHAI would provide Rs 400 crore but the NoC (no objection certificate) from the banks was pending and was granted only 10 days ago. We are hopeful that before December this year, the project would be completed; 85 per cent of the work is already done. Land acquisition being a challenge is a perception in the media. In reality, landowners are being given Rs 1.5 crore for land worth Rs 1 crore. The rates have increased under the new law and so people have queued up to sell their land to us.

The government has planned 13 expressways, which require fresh alignment and larger stretches; therefore, more for compensation. With land cost going up, how do you plan to bring down the construction cost?

We are working at reducing the cost of construction by bringing down the interest cost on loans, currently in the range of nine to 10 per cent, to five-six per cent. In the ports sector, we are constructing the JNPT (Navi Mumbai) to Panvel container traffic corridor; for that, we took a loan at 2.25 per cent from DBS Bank Singapore and SBI Capital Markets. Higher land compensation can be offset by reduced cost of construction, by way of reduction in interest cost. 

How much expenditure was made by the government towards land acquisition in the past financial year?

We must have spent about Rs 30,000 crore. This fiscal year also, about Rs 35,000 crore would be spent on that. About Rs 20,000 crore is still with the states that is yet to be disbursed for acquisition.

There was a general slowing in the sector, due to which private companies were not willing to participate. Has this improved with introduction of the hybrid annuity (HAM) model?

Yes. We saved the banks from massive NPAs (non-performing assets). 

Do you see more private investment coming? What would be the mix between EPC (engineering, procurement construction) and HAM projects?

The companies were tired of PPP (private-public partnership) agreements; therefore, we got HAM. Companies are coming up for this model but EPC is still the preferred mode, since that brings in liquidity to companies. So, for the next six months, EPC would be important. Under the hybrid-annuity  model, we have already awarded works for over Rs 70,000 crore. 

There was a proposal that commuters will have to pay toll per kilometre on the highways. What is the status?

It would be done on a pilot basis in Delhi on the EPE, where CCTVs would be used to establish how many kilometres a vehicle has travelled.

Is enough investment coming in the maritime sector?

More than Rs 4 lakh crore investment is envisaged in port-led development and modernisation. We are developing six new ports, automobile and leather clusters alongside ports; these would invite Rs 12 lakh crore investment. We have completed Rs 6 lakh crore of work and have a target of Rs 25 lakh crore by the end of 2018-19.

Growth in ports and highways was hampered due to lower traffic volumes. Has this improved?

That was not the reason. It was lack of decision making during the UPA (earlier government) rule. Delayed environment clearance hampered the progress of projects.  

What is the status of the proposed multi-purpose berth at the Chabahar Port in Iran?

The tender is out, civil work is done. We hope to make it operational by December. It is economically viable for us. It has a lot of strategic importance. 

What is happening on road safety?

This is one area I am very unhappy about. There has been a four per cent rise in road accidents since I took charge of my office. We’re now spending Rs 11,000 crore on 786 ‘black spots’.  We are working on a war-footing to reduce road accidents by 50 per cent by the end of our five-year term. 

When do you see the Motor Vehicles Bill getting cleared? 

It has been passed by the Lok Sabha and as soon as the monsoon session of Parliament begins, it would be cleared by the Rajya Sabha. It is a major reform for the sector. The states are on board to implement it.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel