- May 19, 2017
- Posted by: admin
- Category: Indian Infrastructure Series, Research Reports
Prime Minister Narendra Modi has always been with the mission of eliminating poverty from the country. To achieve the same, along with a double-digit growth, the infrastructure has to be augmented in an integrated manner. The government has been constantly focusing on developing a strong network of waterways, railways and roadways. Out of these three, the roadways having the most significant importance can be shown by one out of many facts: The road sector; which is classified into National Highways, State Highways, Rural Roads, Urban Roads, Project Roads and other PWD Roads; actually influences the pace and structure of the development of a nation.
The major difference between the transportation charges clearly shows how much in demand the roadways are. The cost of transportation of vehicles per km through the roads is Rs. 1.25, which is 317% more than that of the charge for waterways.
Road to Growth
The Road Network is vital to every nation’s economy. So it is for India, as it facilitates the country’s transportation. The road sector contributes about 2% to India’s GDP and 50.9% to the sector’s (transportation) GDP.The gross value added of the road sector is at 3.64% at 2011-12 prices.
Out of all the types of roads, the National Highways, maintained and managed by the National Highways Authority of India, is the backbone of the road infrastructure. These roads constitute for about just 1.7% of the road network in India but the traffic they carry is huge, which is 40%.
The amount of compensation paid by the NHAI for land acquisition has been increasing every year and is a clear indication of how important these highways are.
In the FY14, Rs. 7793.55 cr was spent by the then government for acquiring 8655 hectares (Rs. 0.90 cr per hectare), whereas, it rose to a spending of Rs. 9097.88 cr for 6733 hectares (Rs 1.35 cr per hectare) after the Modi government took over. From FY15 to FY16, the compensation paid for per hectare of land shot up to Rs. 2.05 cr, which is a 52% hike over the previous year’s price. The land acquisition increased by 39% in FY16 from the previous year.
But this is not it, since the Ministry of Road Transport and Highways is also planning roadside amenities such as washrooms, drinking water outlets and multi-utility shops—ideally along with adequate parking facilities—every 25-50 km along the national highways. These plans would set the land demand by the road sector to increase even more. And more the demand for land, the more it is an indication of growth.
Taking the highway
The Modi Government took over the office in May 2014, and it has been constantly working on the grounds of growth. It can be seen by the bizarre amount of increase in the length that was awarded for construction of highways in FY15 by the Modi government.
It rose from 3169 kms in FY14 to 7980 kms in FY15, which is more than a 100% increase over the previous year. In just the 1st year of coming to power, the Government had buckled up and taken major actions. The figures for the subsequent years are given below:
Moving towards the goal, daily
There has been an increase in the daily length of highways being constructed, though the pace hasn’t been as high as it has been for the rest of the parameters.
The Ministry of Road Transport and Highways, led my Nitin Gadkari, had a set target of constructing 21 kms per day for FY17, which it could almost achieve. In FY17, nearly 20 kms were constructed per day.
However, for the current year FY18, the target is set at 41 kms per day.
The bigger picture..!
A lot of figures have spoken for the pace of development carried on by Modi Sarkar and of the significant importance that the highways hold.
Now, let’s have a look at the number of projects that have been awarded to the NHAI by the Union government, the states where these projects are allocated and the companies that have been given the contracts.
In FY15, i.e., the first ruling year of the Modi Government, a total of 35 projects were given by the Government in regards with the National Highways. The projects were distributed across the entire country, covering all the regions. However, the maximum concentration of the projects was in the state of Odisha, with 7 projects.
Here is the list of the top 10 companies those were awarded the maximum number of projects, value wise:
|Company||No. of projects||Amount (Rs cr)|
|Larsen &Tourbo Ltd.||5||4038.11|
|G R Infra Projects Ltd.||2||3669.65|
|IRB Infrastructure Developers Ltd||2||3264.34|
|IRCON International Limited||2||1653.26|
|Corson CorviamConstruccion S.A||2||1563.88|
|TRIL Roads Pvt. Ltd.||1||1388|
|DilipBuildcon Ltd – Varah Infra Ltd.||2||1214.6|
|IL&FS Engineering and Construction Company Ltd.||1||1027|
|Sadbhav Engineering Ltd||2||839|
|Dilip Buildcon Ltd||1||742.72|
In FY15, projects worth Rs. 22706.04 cr were awarded in total, out of which 85.44% were awarded to the above mentioned companies.
In FY16, a total of 79 projects were awarded by the govt., the maximum of which was awarded for the state of Uttar Pradesh, with 16 projects for it, followed by Maharashtra that was awarded with 12 projects.
Here’s the list of the top ten companies that gained the maximum during this year:
|Company||No. of projects||Amount (rs cr)|
|Larsen &Tourbo Ltd||8||5610.52|
|IL& FS Transporatation Networks Ltd||2||4173.92|
|Gayatri Projects Ltd||5||3965.26|
|PNC Infratech Ltd||3||3818.23|
|Jaiprakash Associates Ltd||3||3772.74|
|MBL Infrastructure Ltd||2||3111|
|Punj Lloyd Ltd||4||3101.89|
|Sadbhav Engineering Ltd||4||2720.15|
|G R Infra Projects Ltd||4||2249.67|
Out of Rs. 68397.68 cr worth of projects, 53% of the total worth of projects were allocated to just ten companies mentioned above.
In FY17, a total of 51 projects were awarded by the Government. Gujarat bagged the maximum number of projects, 11. Again, all the regions of the country were covered while allotting projects.
The top ten companies that were given the maximum projects as per the value are listed below:
|Company||No. of projects||Amount (Rs Cr)|
|IRB Infrastructure Developers Ltd||3||3515.87|
|Sadbhav Infrastructure Project Ltd||3||2711.95|
|Gayatri Projects – PTPS||1||2510|
|Larsen & Toubro Ltd||2||1700.12|
|BSCPL Infrstructure Ltd – KNR Constructions Ltd||1||1664.2|
|MEP Infrastructure Developer Ltd & San Jose India Infrastructure and Construction Pvt Ltd||2||1597.87|
|Chetak Enterprises Ltd||1||1583.18|
|Agroh Infrastructure & Developers Pvt Ltd||2||1553.61|
|Gawar Construction Ltd||5||1465.38|
In FY17, a total of Rs. 39499.12 cr worth projects were distributed for the, out of which 55% was given to the companies listed above.
In a nutshell…
It’s the fourth year since the Narendra Modi-led National Democratic Alliance government took over and there is no looking back since then.
In 2014, the revenue receipts were at Rs 13 lakh crore which scaled up to Rs 20 lakh crore during the three years of the present regime. The revenue receipts are expected to touch Rs 28-30 crore in the next two years, due to the post-demonetizationeffect and the upcoming GST regime.
There has been a constant steep increase in the development of highways (road sector), in fact the entire infrastructure, ever since the Government has been changed.
The NHAI is all packed with responsibilities and projects, one lined up after the other. If this pace of development continues, the day won’t be far when India would be one of the topmost ‘rich-in-infrastructure’ countries.
-Report by Prerna Pincha