Roads and Highway

India, having one of the largest road networks of 42.4 lakh km, consists of National Highways, Road Highways, Expressways, State Highways, Major District Roads, Other District Roads and Village Roads with the following length distribution:

National Highways/Expressways

70,934 km

State Highways

1,54,522 km

Major and Other District Roads

25,77,396 km

Rural Roads

14,33,577 km

Source: Annual Report 2010-11, Ministry of Road Transport and Highways, Government of India

Investment Incentives

The following provisions have been listed with a view to attract private investment and for facilitating public-private partnership in National Highways:

  • Simplified policies with transparent procurement procedures
  • Model Concession Agreement (MCA) standardization
  • Foreign Direct Investment (FDI) up to 100 percent is allowed in the road sector
  • Viability Gap Funding up to 40 percent of project cost based on competitive bidding for each project
  • Tax concessions-complete tax holiday for any 10 consecutive years out of 20 years of the concession period.
  • Retention of toll by concessionaire for BOT (Toll) projects
  • Duty free import of high capacity and modern road construction equipments
  • Greater Equitable allocation of risk
  • Better clarity in the defining of rights and obligations of the parties.
  • Strong dispute resolution mechanism
  • Robust Institutional and legal set up comfort to the investors
  • Revenue sharing in the form of negative grant and concession fee.
  • Protection of the concessionaire from the risks of additional Toll way and competing roads. \
  • Investment Opportunities
  • Roads, Bridges and Bypasses
  • Consultancy Services
  • Major Highway Contracts under International Competitive Bidding (ICB)
  • Collaborations for Equipment Manufacture
  • Equipment Leasing
  • Design Engineering
  • New Technology
  • New Management Techniques

SWOT ANALYSIS OF INDIAN ROAD NETWORK 

Strengths1. India has a large road network of over 3.314 million kilometers of roadways (2.1 million miles), making it the third largest road network in the world2. At 0.66 km of highway per square kilometer of land the density of India’s  highway network is higher than that of the United States (0.65) and far higher than that of China's (0.16) or Brazil's(0.20)3. The National and State Highways form the economic backbone of the country.4. It helped development along the route, and many towns have sprung up along major highways. State Highways and Major District Roads constitute the secondary system of road infrastructure of India.5. By acting as the link between the rural and urban areas, the State Highways and Major District Roads contribute significantly to the development of the rural economy and industrial growth of the country.6. It is estimated that the secondary system carries about 40 per cent of the total road traffic and comprises about 20% of the total road length.

Weakness1. As of 2002 only 47.3% of the network consisted of paved roads2.the funds set aside for the maintenance and expansion of the road network have beeninsufficient3. National Highways represent only 2% of the total network length; they handle about 40% of the total road traffic.4. Presently, lane capacity is low and only about 16% of India's roads are four lanes or above5. Approximately a quarter of all India’s highways are congested, in some cases reducing truck and bus speeds to 30-40 km/h (19-25 mph).6. Road maintenance remains under-funded, and some 40 percent of villages in India lack access to all-weather roads.7. Due to decades of bureaucratic and procedural difficulties, the road network has suffered longdelays.8. Transparency International estimates that truckers pay annually $5 billion in bribes.

 

Opportunities

To modernize the country's road infrastructure and India plans to spend approximately $70Billion USD over the next three years2. India will need to spend $1.7 Trillion USD on infrastructure projects over the next decade to boost economic growth3. to accomplish this, the Government of India is attempting to promote foreign investment in road projects by offering financial incentives such as toll rights to developers4. In general, roads inIndia are primarily bitumen-based macadamized roads but because bitumen is obtained mostly from imported crude oil, and due to other factors, concrete-based roads will prove to be more cost-effective in future.5. One also comes across unpaved dirt roads in the countryside, which is fast getting converted to paved roads.6. The main roads in India are under huge pressure and in great need of modernization in order to handle the increased requirements of the Indian economy.

Threats

1. As of 2002 only 47.3% of the network consisted of paved roads.2. As the funds set aside for the maintenance and expansion of the road network have been insufficient but India will need to spend $1.7 Trillion USD on infrastructure projects over the next decade to boost economic growth.3. Almost 80% of passenger traffic and about 65% of freight movement is handled by this vastnetwork4. National Highways represent only 2% of the total network length; they handle about 40% of the total road traffic.5. India's cities are extremely congested the average bus speed is 60.0 km/h in many large cities.6. Number of vehicles has been growing at an average pace of 10.16% per annum over the last five years.
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