Tuesday, October 29, 2013

Passage to India’s heart

By Neeraj Mahajan

Haryana today, is not a state – but real estate. Why? Well, the simple answer is that Haryana is closest to Delhi and envelops Delhi on three sides with well defined roads, rail, national, international airports and other infrastructure. Almost 29 national highways covering over 1461 km, 2,494 km long state highways and South Asia’s oldest major road Grand Trunk (GT) Road pass through the state. Gurgaon is today the hottest, fastest growing and most talked about business hub with the highest concentration of multi-national corporate offices. It is soon going to have the Rs. 1,000 crore Rapid Metro Rail —India’s first wholly private (IL&FS 74 percent equity share and DLF 26 percent) railway project.

Traditionally Gurgaon overshadowed areas like Faridabad, Sonepat, Panipat, and Karnal. This hierarchical imbalance is not going to last long. Even many insignificant and relatively unheard of places like Kondli, Manesar, Rewari, Hissar, Palwal, Bhiwani, Bahadurgarh, Jhajjar and Bawal are queuing up to break the economic glass-ceiling. The effect of all this, is a feverish pitch to acquire land, identify new areas for infrastructure development -- to meet the needs of 
the growing population for luxury, economy and low-cost housing, commercial and entertainment centers, public utilities, parks, and other urban civic facilities.
The biggest blockbuster of course is the 1483 KM long Delhi-Mumbai Industrial Corridor -- a mega USD 90 billion infra-structure project connecting Delhi and Mumbai -- the political and business capitals of India with Japanese financial and technical aid. The highlights of this project include a Golden Quadrilateral National Highway and a Multi-modal High Axle Load Dedicated Freight Corridor (DFC) running parallel to each other between Delhi and Mumbai. Starting from Dadri in Delhi NCR these would pass through six states of U.P, Delhi, Haryana, Rajasthan, Gujarat and terminate at Jawaharlal Nehru Port in Mumbai. Over 60% area of Haryana is directly or indirectly influenced by DMIC. Several top-of-the-line industrial estates, clusters, industrial hubs and investment regions like Sonipat-Kundli, Manesar-Bawal are being developed along this corridor with the help of grants and loans from Indian and Japanese government as well as investment by Japanese and Indian firms. The project area of this ambitious DMIC project extends up to 150 km on both sides of the Delhi-Mumbai Dedicated Freight Corridor and opens floodgate of opportunities along NH-8, NH-2, NH-1 and NH -10 for industrial, urban and supporting infrastructure. Already Bawal has evolved as a mega industrial hub with a large numbers of multi-national companies lining up to set up their manufacturing bases. Besides these, two investment regions at -- Manesar-Bawal-Nimarana and Kundli-Sonepat as well as two mega industrial areas are coming up at Faridabad-Palwal and Rewari-Hissar to capitalize on the locational advantages.
A 135.6 km long Western Peripheral Expressway or Kundli-Mansear-Palwal (KMP) Expressway is going to connect Kundli, Sonipat, Manesar, Gurgaon, Faridabad and Palwal. It will cross NH-1 near Kundli, NH-2 at Palwal, NH-8 at Manesar and NH-10 at Western Bahadurgarh. Many investors are investing in residential and commercial projects on both sides of the expressway. Since the commencement of work

on the Expressway land prices in Kundli have increased from Rs 25 lakh per acre to Rs 1.5 crore per acre.  Almost 242.55 acre land from 14 villages has been acquired for Dwarka Expressway also called Northern Express Road or Northern Peripheral Road which will cut down travel time between the Delhi, Gurgaon and Manesar.  This is going to be the lifeline for major housing projects in Gurgaon-Manesar. Almost 26 new sectors (99 to 115 and 58 to 67) are being developed along this Expressway. Phase III of Metro rail on this route will link IGI Airport and Dwarka. Apart from this twelve specialized hubs, including education city (5,000 acre), Sample township (8,401 acre), cyber city (470 acre), bio-sciences city (1,370 acre), Jahangirpuri-badli township (14,226 acre), fashion city (544 acre), entertainment city (346 acre), world trade city (650 acre), dry port city (1,770 acre), leather city (691 acre) and leisure city (1,853 acre) would be developed along the KMP Expressway. Both Southern Peripheral Road and Northern Peripheral Road (Dwarka Expressway) will form a ring around Gurgaon allowing long distance inter-city and inter-state vehicular traffic to bypass the current Gurgaon expressway (NH8).

That’s not all, on the anvil are a Delhi Gurgaon expressway with the largest 32 lane toll plaza in Asia on NH8, a 8 lane flyover on Badarpur- Faridabad stretch of Mathura road and a 4 lane highway in Yamuna Nagar and Panchkula – connecting Haryana to Chandigarh (without entering Punjab). Haryana already has Metro Rail connecting Gurgaon, Faridabad and Bahadurgarh to different parts of Delhi. Many universities and colleges are coming up in Khanpur, Murthal, Karnal, Mewar and Faridabad. A Women’s university and Rajiv Gandhi University on the pattern of Oxford University in Sonipat, a central university in Mahendragarh, Lala Lajpat Rai University of animal sciences in Hisar and the first defense university in Gurgaon should transform Haryana into an international commercial and educational hub in 5-7years.  Half of Haryana’s over 20,412 sq km are – equal to Delhi, UP and Rajasthan combined forms part of NCR India's largest and world's second largest agglomeration with a population of 22,157,000. Haryana also takes pride in the fact that large part of its area is covered under the NCR for which NCRPB is providing soft loans upto 75% of the project cost. 

It is a pity… fourteen years after its launch the much touted Golden Quadrilateral (GQ) infrastructure project - connecting Delhi, Mumbai, Kolkata and Chennai - is running behind schedule. When the Manmohan Singh government took over almost 80% of the stretches were done. Since then things began to slow down and in the last seven years only 5% of the Highway Project could be completed. 
These delays are mainly due to land acquisition problems, delay in environment and forest clearance, approval for road over bridges and poor performance of some contractors due to cash flow constraints and law and order problems in some states.
On the other hand already there is talk of how this highway when completed will shorten the travel time. For instance, it will be possible to reach Kolkata in 36 hours instead of 48 hours. Already districts that lie between zero to 10 km on both sides of the Golden Quadrilateral network are experiencing substantial improvement in productivity and connectivity.
The overall length of the quadrilateral is 5,846km consisting of four / six lane express highways. The project was estimated to cost INR 600bn but was completed at half the cost INR 308.58 bn.
India has a large network of highways maintained by the National Highway Authority of India (NHAI). An efficient road network is essential for a large country like India to maintain national integration and socio-economic development.

These highways altogether account for just two percent of the country's total road infrastructure but they carry 40% of the total national traffic.

The Golden Quadrilateral has four sections. Section I is a 1,454km stretch of National Highway 2 (NH2) from Delhi to Kolkata. It runs through Delhi, Haryana, Uttar Pradesh, Bihar, Jharkhand and West Bengal and connects Delhi, Faridabad, Mathura, Agra, Firozabad, Kanpur, Allahabad and Varanasi. The 1,684 km long Section II from Kolkata to Chennai passes through West Bengal, Orissa, Andhra Pradesh and Tamil Nadu along NH6, NH60 and NH5. Section III is a 1,290 km long stretch from Chennai to Mumbai on NH4, NH7 and NH 46. It passes through Maharashtra, Karnataka, Andhra Pradesh and Tamil Nadu. Section IV is a 1,419km stretch between Mumbai and Chennai covering NH 8, NH 79A, NH 79 and NH 76. It passes through the states of Maharashtra, Gujarat, Rajasthan, Haryana and New Delhi.  

The project executed through a Public Private Partnership (PPP) between NHAI and contractors has been financed from taxes on petrol and diesel (Rs 200bn), external assistance (Rs 200bn), market borrowings (Rs 100bn) and private sector participation (Rs 40bn). To recover their cost the contractors are allowed to collect toll taxes for a specified concession period.

Though smaller in scale, this Highway Development Program is similar to the National Highway System in U.S. Under the program more than 20,000 miles of highways are being developed. The government is also planning to upgrade another 20,000 miles of highways besides building over 10,000 miles of expressways over the next decade.  
Most Indian cities lack even basic road network and other infrastructure. As a result there is traffic congestion and pollution on the city roads. Apart from this volume of goods is to be transported across the country to keep the wheels of the economy moving. Over the last few years India has emerged as the second fastest growing economy in the world as a result the demand for trucks, buses, and other commercial vehicles substantial has increased substantially. Bulk of the bulk of the commercial goods need to be shifted by road even though India has one of the world’s largest railway networks. The new highways constructed highways can accommodate large multi-axle tractor-trailers. Apart from this development in the building, construction and infrastructure have also accounted for the increase in commercial vehicles.

To ease traffic congestion in cities, modern buses offer a comfortable and safe journey to encourage commuters to switch from personal to public vehicles in cities. Migration of large number of labour to the cities and industrial belts has also pushed up demand for long distance buses. As long as people in villages and small towns migrate to the big cities there is a need for commercial transport services.

For long Tata Motors has been the uncrowned king of Indian roads with domination over nearly two-thirds of the market with the broadest dealer network and widest product range. Tata Motors has tied-up with Brazilian firm Marcopolo to build buses in India. In Thailand, the firm is marketing pickup trucks in collaboration with a local company having truck manufacturing facility in South Korea and bus and coach manufacturing unit in Spain.

Ashok Leyland is a distant second has nearly 13% market share in all commercial vehicles, including small goods carriers. Ashok Leyland is a market leader in buses and a leading vehicle supplier to the Indian armed forces. The company has recently tied up with Nissan for manufacturing light commercial vehicles and engines.

In the last decade several Japanese manufacturers have entered the Indian market with light commercial vehicles. But apart from Volvo which has gained market share in the bus and large truck segment most foreign manufacturers have met with limited success. German manufacturer MAN has tied up with Force Motors, Navistar of USA too has entered into partnership with Mahindra & Mahindra to launch large trucks in India.

The Golden Quadrilateral highway is running behind schedule. Large tracts of it are only single lane wide and need repairs. The infrastructure gap is one of the main reasons behind India’s  poverty and non realization of potential, even though India has one of the world’s most extensive and vast transport network. Only 20 percent of the national highway which carries 40 percent of traffic) is four-lane and one-fourth of the rural population does not have access to an all-weather road.
At this rate the transport sector alone will require an investment of nearly US$500 billion over the next 10 years.  
The 5800km long Golden Quadrilateral project is one of the largest public works in modern Indian history but not without its own share of bad-publicity. For instance a project director in Bihar who tried to raise a voice against corruption was done to death.
All this is part of a plan to integrate the country and siphon of wealth from the cities into the towns and villages. The Golden Quadrilateral will eventually connect all of the major points of India like Delhi to Kolkata, Kolkata to Chennai, Chennai to Mumbai, and Mumbai to Delhi.

The day is not far when Golden Quadrilateral will ferry more than 60% of the road passengers. A highway close to India’s heart, the Golden Quadrilateral – will transform travel and mobility in the next decade.