road infrastructure

8/22/2019 Road Infrastructure

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School of Petroleum Management

Road Infrastructure

Projects in India

A Research Report

By:

1. Akanksha Kumari2.

Nishit Jain

(MBA Energy & Infrastructure)

School of Petroleum management

Gandhinagar, Gujarat

6/18/2013


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Table of Contents:

Executive Summary

A. Introduction

B. Current Scenario

C. Financing road infrastructure projectsSource of Investment, PPP Model, Investment analysis, Issues and challenges

D. Social cost benefit analysis of road infrastructure projectsBenefits & Costs of Indian Roads

E. Government Role & SupportNational Highway Development Project (NHDP)

F. Research & Development in Road InfrastructureEmerging technologies- Eco-friendly products, Recycling, Flexible concrete pavement

technology, Jute Geo Textile, Impacts

G. Yamuna ExpresswayStudy reportObjectives, Developer, Financing the project, Boost to real estate, Expressway

advantages.

H. Major Setbacks and Future Scope

I. References

J. Appendix


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EXECUTIVE SUMMARY

The purpose of this report is to understand the importance of road infrastructure in India and to

highlight the progress and initiatives that are being taken by the government to improve the

current road model. The focus of the report to is to examine the current methods being adopted

by the government to improve the road infrastructure in India and the difficulties and setbacks

being faced by them in the implementation of their plan.

The report examines the current scenario of roads in India and the mechanism involved in

financing a road infrastructure project. The public-private partnership used for construction of

road project is analyzed to look into the merits and demerits of the model. A Social cost benefit

analysis of roads is also done to highlight the importance of roads for overall development of the

country. Various initiatives taken by the government in the field of road projects and the progress

made in the research and development for road construction is highlighted in the report. A

currently concluded public-private partnership project, Yamuna Expressway, connecting

Greater Noida to Agra has also been studied to showcase the importance of the road

infrastructure for the Indian economy.

From this research report it is concluded that to have a continuous and compounding growth ofour Nation, it is very essential to build, develop and foster our Infrastructure sector, especially

Roads, as they carry the seeds for running the economy. Investing in Road Infrastructure seems

promising with fruitful gains, so with creative investment tools, strategic plans and robust

reforms, there is no stopping for India to become the most progressive-economically developed

nation.


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A. INTRODUCTION:India has one of the largest road networks in the world of 4.2 million km at present. Roads carry

about 65% of freight and 85% of passenger traffic in the country. The countrys road network

consists of expressways, national highways, state highways, major district roads and rural roads.Road infrastructure plays a key role in reducing the poverty of the people living in the country. A

road provides connectivity to markets, schools, healthcare facilities etc. which results in

economic and social growth of the country. An investment in roads not only provides cheaper

and more efficient movement of people and goods across cities but also affects the distribution of

economic activity across cities. Roads alone account for 7% of the growth in total output of rural

areas. Roads and highways are the lifeline of the country and their development is crucial for the

social and economic transformation of the country.

B. CURRENT SCENARIO:The total length of expressways and national highways constitute about 3% of the total road

network in the country while the state highways, major district roads and rural roads

constitute remaining 97% of the road network. Indias national highway network which was just

23,000 km in 1947 has tripled to 70, 934 km in 2012. The private sector participation which was

just 5% in 2004 has increased to 34% during the five year plan of 2007-2012.An increase in

participation by private sector would mean a huge investment by the private players in roads and

highways sector under the public-private partnership.

Courtesy: Mercator Global Figure 1

Indias road network is 3rd largest after U.S &China

National Highways are 2% of the network butcarry 40% of the total traffic.


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The ministry of Road Transport and highways which is responsible for the development and

maintenance of national highways in the country are continuously working on improving the

growth rate of roads and to reduce the wide gap between the between the demand and supply of

road services in the country.

C. FINANCING ROAD INFRASTRUCTURE PROJECTSAcknowledging the fact that the Infrastructure sector forms the arteries and veins of a growing

country like India, it is very important to build, develop and sustain the Infrastructure sector. To

do that, it is crucial to strategically formulate an investment plan that will benefit the

Government, the financers and the society in large. Road infrastructure projects are inherently

capital intensive due to the risks it carries throughout the project execution, namely, land

acquisition, tax, inflation, delays in approvals etc.

Pre 1991, the Government tried its best efforts to build a sustainable Infrastructure plan. But with

the continuous growth of the country and India emerging as a fastest growing economy , it

realized the need of back up and support from public and private firms. Since the economic

liberalization of 1991, India has started to privatize government-owned businesses and to make

space for Public-Private Partnerships (PPPs) in the provision of infrastructure.

The Indian government realizes that there is a significant gap between the investment needs and

the government funding, and this gap cannot be filled by assistance from the multilaterals, like

the World Bank, alone.

SOURCES OF INFRASTRUCTURE INVESTMENT IN INDIA

Broadly, the sources of Investment in Indian Infrastructure can be classified as Equity & Debt.

Keeping these two as the threshold, the financial resources can be of two nature- Domestic or

External.

Domestic resources may include-

Domestic investors Public Utilities


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Dedicated Government Funds Institutional investors Domestic Commercial banks ( 3-5 year tenor) Domestic term lending institutions ( 7 -10 year tenor) Domestic bond markets ( 710 year tenor) Specialized infrastructure financing options such as infrastructure debt funds

External resources may include-

Foreign investors Equipment suppliers ( in collaboration with domestic or international developers) Dedicated infrastructure funds Other international equity investors International Commercial banks (7-10 year tenor) Export credit agencies ( 7 -10 year tenor) International Bond markets ( 10 - 30 year tenor) Multilateral agencies ( With more than 20 year tenor)

PPP MODEL- AN UNDERSTANDING

Governments typically have a number of objectives when building infrastructure: getting good

value for money, timely delivery, meeting public needs and so on. PPPs have shown their

potential as an important tool to meet these objectives and address infrastructure shortages. For

example, they provide new sources of capital for public infrastructure projects. Shifting the

responsibility for arranging the financing to the private partner can help deliver infrastructure if a

public entity is unwilling or unable to shoulder the full debt or the associated risk of the project

at a certain point in time.

A public-private partnership, or PPP, refers to a contractual agreement formed between agovernment agency and a private sector entity that allows for greater private sector participation

in the delivery of public infrastructure projects. In some countries involvement of private

financing is what makes a project a PPP. PPPs are used around the world to build new and

upgrade existing public facilities such as schools, hospitals, roads, waste and water treatment

plants and prisons, among other things. Compared with traditional procurement models, the


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private sector assumes a greater role in the planning, financing, design, construction, operation,

and maintenance of public facilities. Risk associated with the project is transferred to the party

best positioned to manage it. Some of the most common PPP models are described below.

A. Design-Build (DB): Under this model, the government contracts with a private partner todesign and build a facility in accordance with the requirements set by the government.

After completing the facility, the government assumes responsibility for operating and

maintaining the facility. This method of procurement is also referred to as Build-Transfer

(BT).

B. Design-Build-Maintain (DBM): This model is similar to Design-Build except that theprivate sector also maintains the facility. The public sector retains responsibility for

operations.

C. Design-Build-Operate (DBO): Under this model, the private sector designs and builds afacility. Once the facility is completed, the title for the new facility is transferred to the

public sector, while the private sector operates the facility for a specified period. This

procurement model is also referred to as Build-Transfer- Operate (BTO).

D. Design-Build-Operate-Maintain (DBOM): This model combines the responsibilities ofdesign-build procurements with the operations and maintenance of a facility for a

specified period by a private sector partner. At the end of that period, the operation of the

facility is transferred back to the public sector. This method of procurement is also

referred to as Build-Operate- Transfer (BOT).

E. Build-Own-Operate-Transfer (BOOT): The government grants a franchise to a privatepartner to finance, design, build and operate a facility for a specific period of time.

Ownership of the facility is transferred back to the public sector at the end of that period.

F. Build-Own-Operate (BOO): The government grants the right to finance, design, build,operate and maintain a project to a private entity, which retains ownership of the project.

The private entity is not required to transfer the facility back to the government.

G. Design-Build-Finance-Operate/Maintain (DBFO, DBFM or DBFO/M): Under thismodel, the private sector designs, builds, finances, operates and/or maintains a new

facility under a long-term lease. At the end of the lease term, the facility is transferred to

the public sector. In some countries, DBFO/M covers both BOO and BOOT.


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In India, for example, the private financing of NHDP under PPP frameworks takes place as per

Build Operate and Transfer (BOT)-Toll/Design Build Finance Operate and Transfer (DBFOT),

BOT (Annuity) and Special Purpose Vehicle (SPV).

INVESTMENT ANALYSIS

So Far

In eleventh plan, a total investment of Rs. 27 lakh crores (eleventh plan 2011/12 prices) was

made towards infrastructure development. This investment at 7.22 percent of GDP (average)

represents a significant shift from 5.02 percent of GDP (average) invested during tenth plan1.

This sharp increase in total infrastructure investment was largely due to the rapid rise in

investment by the private sector especially in power and telecommunications.

Figure 2: Total Infrastructure Investment break up into public and private investment as pet 11th

Five Year

Plan

1Interim Report of the High Level Committee (Planning Committee)-Aug 2012


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Seeing the Future

Planning commission is targeting an investment of 51 lakh crores over the duration of the twelfth

five year plan which is almost double the amount proposed under the eleventh plan. While the

share of public investment is projected to decrease from 62% to a level of 53% in the twelfth

plan, the share of private investment is projected to increase from 38% (eleventh

plan) to 47% (twelfth plan) of the total investment.2

Planning commission is expecting private sector to play a key role in twelfth plan with an overall

investment growth of 131%. Private investment is projected to grow in all the infrastructure

sectors with a projected to growth of >100% in Road sector. Overall private sector investment

will be a key to success of infrastructure development under twelfth five year plan.

Figure 3: Projections of Investments in Infrastructure, for 12th

Year and Sector-wise

2Interim Report of the High Level Committee (Planning Committee)-Aug 2012


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FUNDING THE GAP

In twelfth five year plan, planning commission is projecting an investment of Rs.51 lakh crores.

About 53% of this is expected to be funded through budgetary support and rest will need to come

from private sector funding.3

Based on estimated funding flows from various sources and the incremental investment required,

twelfth plan will have a huge funding gap and will need to channelize an additional private sector

investment of about Rs.6.08 lakh crores over the duration of the plan. This is assuming that

budgetary support remains same. In the given macro-economic environment, this will be huge

challenge and wont be possible without the radical reforms.

Figure 4: Estimated funding gap

3RBI, Interim report of the High Level Committee (Planning Commission) - Aug 2012


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ISSUES AND CHALLENGES CONSTRAINING INFRASTRUCTURE FUNDING

Looking at the figures above of the projected growth of Road and Bridges projects in 12th

Five

Year Plan and the gap that needs to be bridged, one can easily state that the Indian Infrastructure

sector holds promising grounds for funding. This coupled with the reforms brought in by the

Government of India in recent times ensures that there is a huge potential in investing in this

country. It will encourage the private sector in taking on a larger and more diverse role from

being an infrastructure builder (under a publicly financed arrangement) to an infrastructure

developer (under PPP structures which include private finance).

But along with varied combinations of funding between Public and Private, comes a certain

degree of risk and challenge. The guidelines of FDI appear as opportunity and threat to the local

players.

Issues such as who is having more capital and better technical expertise can become quite a

challenging task for domestic players. But these days, even the domestic players are increasing

their competitive advantage and giving a fair fight to the foreign players. Hence, it is expected

that even if these potential bidders work collaboratively or individually, a good amount of fund

can be generated.

Other roadblocks could be delays in approvals, land acquisition, environment clearances, change

of Government, change in policies and reforms. Based on the Literature Survey, we have come

across the following issues and challenges that need to be addressed:

1. Limited access to bank finance2. Stringent guidelines towards investment in infrastructure bonds3. Statutory restrictions imposed by Government of India on infrastructure4. Limit from Equity market5. Growing perception among equity shareholders regarding termination of payment6. Restriction of inflow of fund as per PFRDA4 guidelines and Sovereign credit rating

4Pension Fund Regulatory and Development Authority


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D. ROAD INFRASTRUCTURESOCIAL COST- BENEFIT ANALYSIS

It is an established fact that road infrastructure is necessary for the development of the country.

Poor roads leads to loss to the economy, estimated to be Rs 20,000-30,000 crores annually. As

the national economy is growing at the rate of 7% per annum, it has become necessary for the

roads infrastructure to also grow at a minimum rate of 7% per annum. Considering the huge

capital involved in developing the roads, it becomes necessary to do a comprehensive project

evaluation to ensure benefits on the money spent.

Identification of Economic benefits and costs of Road projects:

The economic benefits and costs of the construction of roads in India require the identification of

changes it has brought to the society. These benefits and costs occur due to the changes in the

relative prices as the economy adjusts itself to the provision of public services, like roads. An

overview of social costs and benefits can serve as a basis for prioritizing separate measures when

making policy plans and deciding investment options. Social Cost benefit analysis will help in

identifying the relevant project impacts, the economic relevance of those impacts in order to help

in decision making of whether to go ahead with the project or not. Also the social cost benefit

analysis will help in looking at the costs and benefits of the project under consideration from thesocietys point of view.

`

Benefits ofRoads

Employment Generation

Improved connectivity

Public transport reliability

Increase in commercialization

Profitability of Industries

Costs ofRoads

Construction & maintenance costs

Loss of Agricultural Land

Rehabilitation of people

Poor Air quality, increased noise

Increase in accidents & fatalities

Figure 5: Social Benefits and costs of roads


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Benefits of Indian Roads:

Employment GenerationThe construction and maintenance of roads provide employment to hundreds of skilled

and un-skilled people. Many government schemes like the Jawahar Gram Samridhi

Yojana or Sampoorna Grameen Samridhi Yojana are aimed at creating need based

infrastructure in villages. The implementation of these schemes plays a great role in

improving the rural quality of life and generates jobs for the local people as well.

Improved connectivityThe networking of roads increases the connectivity of smaller and arterial roads with the

main roads/highways. The building of rural roads helps in linking the villages with other

villages. Theses rural roads also help in linking the agricultural fields with the villages

and cities which in turn bring the farmers a greater market at their door-step to sell their

items. Also the road connectivity in the villages helps people to have greater access to

healthcare and education.

Increase in commercializationThe increased economic activity helps in increasing the market base for the seller, which

in turn reduces the cost of the product because of increased availability of goods. Also the

goods reaching on time to the markets help in reducing the cost of inventory at various

industries and thus improving their profitability.

Reliability of public transportBetter road infrastructure increases the reliability of public transport, with more people

using it rather than their personal vehicles. This helps in decreasing the fuel consumption

of the country (India being a net importer) which in turn reduces the import bill of thecountry and improving the current account deficit of the country.


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Costs of Indian Roads:

Construction and maintenance costsHuge amount of capital is invested in building the road network with requires continuous

maintenance in keeping it in good condition. Government has been actively engaged in

involving the private sector to meet the growing demand. Huge investment which is

required for the road construction is achieved through the public- private partnership,

which has gained significant importance in the country.

Loss of agricultural landThe road to be laid could pass through the agricultural land which would lead the

government to take over the land for road development. This would result in loss of

productive agricultural land to the farmers. This would also decrease the agricultural

production and the availability of food to the growing population.

Rehabilitation of peopleThe laying of road could also pass through urban habitation displacing the people

residing there to different places. The people may be displaced far away from their

workplace which would result in increase in cost of transportation, affecting their income

generating capabilities and affecting their health.

Increase in pollutionThe emission by the movement of transport on the roads leads to deterioration in air

quality and increasing the pollution in nearby villages or regions. The air pollution also

leads to increase in diseases and health hazards to the people living in villages and towns.

The increased noise levels due to the transport on the roads also affect the nearby

habitants.

Increase in accidents/fatalitiesThe increased transport leads to congestion on the roads causing delay for the commuters.

The travellers reach their destination late and affects their working and personal life. The


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increased traffic on the roads also leads to increase in accidents and fatalities. This could

hamper the income earning potential for entire families.

E.GOVERNMENT ROLE & SUPPORT:

The ministry of road transport & highways is primarily concerned with the development of

national highways in India. The ministry is currently following an agency system in developing

roads in India. State Government, the Border Road Organization and the National Highway

authority of India acts as agencies of the Central Government. The prime focus of the

government is to develop roads of international standards, which are to provide facilities for

uninterrupted flow of traffic with enhanced safety measures including better riding surface,

better road geometry, better traffic management, service roads, grade separators, over bridges

and underpasses, by-passes and way side amenities. To execute its plan the ministry has

undertaken a National Highways Development Project which is being implemented in phases

and also the improvement of 54,500km of arterial roads is being done to make it to international

standards. A Special Accelerated Road Development Programme in North Eastern Region

(SARDP-NE) is being undertaken to widen 10,141 km of National Highways ensuring

connectivity of 88 districts in the north eastern region to the National Highways. A special

programme for development of roads in extremism affected areas have also been undertakenwhich connects 34 districts in 8 states of Andhra Pradesh, Bihar, Jharkhand, Chhattisgarh,

Madhya Pradesh, Maharashtra, Orissa and Uttar Pradesh. The ministry is also providing funds

from Central Road Fund to the state governments and Union Territories to connect the state

roads and other rural roads under the scheme of Inter-state connectivity & Economic Importance.

The ministry in order to attract private investment in road sector has started offering projects at

Build, Operate, and Transfer (BOT) basis allowing entrepreneurs to collect their investment from

tolls on selected stretches. Also the government initiative to provide capital grant of 40% of the

project cost and 100% tax exemption in any consecutive 10 years out of 20 years is seen as

positive step towards public-private partnership.


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National Highway Development Project (NHDP):

The national highway development project is a project which is undertaken by the government to

upgrade, rehabilitate and widen major highways in India to international standards. It is the

largest project ever undertaken by the government and is being managed by National Highway

Authority of India (NHAI).

The project is currently being implemented in seven phases by the National Authority of India

(NHAI). A detailed plan of building this project is shown in Appendix I.

NHDP Phase I (Golden Quadrilateral):

Golden Quadrilateral is a highway network connecting four metros Delhi Mumbai, Kolkata, and

Chennai having a total length of 5846km. The largest highway project in India and the fifth

longest in the world, is built at a cost of Rs600 billion. The project was launched in 2001 and

was completed in January, 2012.

NHDP Phase II (North-South & East-West Corridor):

The second phase comprises of national highways connecting Srinagar to Kanyakumari and

Silchar to Porbandar. The total length of the corridor is 7142km and is currently under

implementation with more than 90% of the work completed. The total cost of the phase is Rs 350

billion which is being largely funded by the government.

NHDP Phase III:

The government has approved to upgrade 12,109km of national highways on Build, Operate and

transfer (BOT) basis under the public-private partnership model.

NHDP Phase IV:

Widening of 15,000 km of highway are currently being undertaken to convert the existing single

lane highways into two lanes with paved shoulder.

NHDP Phase V:

It plans to upgrade 5000km of four lane highways into six lane highways in order to deal with

the increasing traffic.


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NHDP Phase VI:

The phase plans on constructing expressways that would connect major commercial and

industrial townships. Plans to connect Vadodara to Mumbai, Chennai to Bangalore, and Kolkata

to Dhanbad through expressways have currently been identified and is currently under feasibility

study.

NHDP Phase VII:

This phase includes improvements to city-road networks by adding ring-roads to enable easy

connectivity with national highways to important cities. It also includes development of

additional flyovers and bypasses along the highways to give growth to the housing development

along the highways.

Figure: National Highway Development Project Progress

Phase 1 Phase II Phase III Phase IV Phase V Phase VI Phase VII

Planned 5846 7142 12109 14799 6500 0 700

Completed 5846 6138 5405 207 1521 0 100

0

2000

4000

6000

8000

10000

12000

14000

16000

Kms.

National Highway Development Project


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F. ROLE OF R&D IN ROAD DEVELOPMENT:

A good transport system signifies the level of economic and industrial development in the

country. With the growing construction of roads in India the role of R&D becomes very

important considering the fact that a small technological advancement can bring a huge change

in the current scenario. The main objective of research and development in road sector is to build

reliable and environment friendly roads which has a longer-lasting life. The research in road

sector should lead to reduction in maintenance and life-cycle costs and should be able to improve

the performance and safety on roads.

The various components of road R&D strategy should be improvement in design, modernization

of construction techniques, introduction of improved materials, development and use of new

technologies.

Emerging Technologies in Road sector:

New technologies for road construction and its maintenance have been in demand in recent

years. Improvements in the available technologies and implementing the same have resulted in

excellent project outcomes in terms of saving of cost and time.

The various advancements made in the area of research and developments are described below:

Ecological friendly products:Several environment friendly enzymes have come in the market and the use of these

products result in minimization, elimination of the use of aggregates. These products are

being used at various construction sites to reduce the need for transporting of soil for long

distances which result in economic cost and simplifies the work process.

Soil stabilizing agents like Zym-tec, fuzibeton, terrazyme are climatically stable material

and are suitable for stabilization of all types of soils. These are inorganic polymer that

chemically binds with all compounds that improves the engineering quality of soil

making them durable resulting in longer lasting roads.


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RecyclingRecycling is an important technology used in road rehabilitation. During the maintenance

of roads the asphalt are recycled to be used again which decrease the maintenance cost in

comparison to conventional methods used in maintenance.

Recycled plastic, mainly polyethylene is also used to improve the bituminous mixture

used in surfacing course of roads. Laboratory studies have shown that the addition of

processed plastic to the bitumen improves the stability, strength and other desirable

properties of bitumen concrete mixture.

Flexible concrete pavement technologyA new technology of cement concrete road construction has proved to be suitable for low

volume traffic. Even though initial cost of constructing cement-concrete road is high as

compared to conventional roads, the life cycle cost with maintenance cost is less

compared to the conventional one. IIT kharagpur which has developed the technology

has used it to create a model road in kharagpur.

Jute Geo textileJute Geo textile is a kind of natural textile material which is obtained out of yarn. This is

used to mix with soil to improve the engineering properties of it. Textiles which have

high moisture absorption, high initial tensile strength and excellent adaptability, increases

the soil structure on degradation.

Impacts of introducing innovative technologiesThe outcomes of applied research have led to accelerated construction, rehabilitation and

reconstruction activities for roads. The new materials developed not only provide

durability and reliability for roads but also has led to the reduction in cost of construction

of roads. The use of ecological friendly and renewable products has helped in

conservation of natural resources along with preservation of environment. Investment in

research and development should be seen as a long term investment to put the country on

the path of high growth.


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G. CASE STUDYYAMUNA EXPRESSWAY

Introduction:

The Yamuna expressway is a 165km, six- lane access- controlled expressway which connects

Greater Noida with Agra located in the state of Uttar Pradesh, India. The signal-free stretch

reduces the time travel between Agra and Delhi by 150 minutes, reducing the distance between

the two cities by 211 km.

The government of Uttar Pradesh decided to construct the expressway to reduce the travel time

between Delhi and Agra and to cope up with the high traffic density. To accomplish this project,

a statutory body of the government, Taj Expressway Authority was formed (TEA) on 20th

April

2001. TEA now is known as Yamuna Expressway Authority (YEA).

Objectives of the Project:

Yamuna expressway was developed to provide a fast moving corridor to the commuters between

Deli and Agra. The travel time between the two cities was expected to reduce considerably

providing a base for industrial and urban development of the region. The project was expected to

give a boost to the real estate development, tourism industry, industrial sector and agricultural

sector in the region. Also the connection of the main townships and commercial centers through

the expressway was to provide an accelerated movement of supplies during the time Yamunafloods and other emergencies.

Developer of the project:

The 165km long expressway has been developed by Jaypee Group under Public-Private

Partnership. An agreement between Yamuna Expressway authority and Jaiprakash industries

limited was executed on 7th

Feb, 2003. Jaypee infratech limited (JIL) was incorporated on April

5th

2007 as a special purpose vehicle to develop, operate and maintain the Yamuna expressway.

The expressway was awarded on BOT (build, operate, transfer) basis, to be executed with full

responsibility for financing, land acquisition, design, construction, operation and maintenance.


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Courtesy: Udyog bandhu, Govt. of U.P

Financing of Yamuna Expressway:

The total cost of the completion of the project was Rs 9739 crores which were funded through a

debt: equity mix of 1.60. The total equity contribution of the project is Rs. 3739 crore, which

includes Rs 1489 crore through real estate inflows during construction period. The total debt

requirement of Rs. 6000 crore is financed to Jaypee group through the tie-up of Rs 3000 crore

from ICICI bank, Axis bank and the remaining debt of Rs 3000 crore through SBICAP.

The Yamuna expressway is entirely constructed in the

state of Uttar Pradesh with its first 42kms passing

through the Noida, Dankaur, Mirzapur and Jewar,

followed by 18 kms to district Aligarh. The following

88kms are located in district Mathura passing through

Matt, Raya, Baldev and Mahaban followed by 18kms

ending in district Agra.

Courtesy: Jaiprakash associates limited


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The Yamuna Expressway is the largest Public Private partnership project till date in India and

the first ever project where the real estate developmental rights has been transferred to the

developer. The concession contract was awarded by the government of Uttar Pradesh to Jaypee

associates through a special purpose vehicle, Jaiprakash Infratech Limited in 2003.

Boost to Real Estate:

Yamuna expressway real estate market picked up as soon as the expressway neared completion.

The prices of the area spurted by 10-15% since the opening of the expressway. The prices of Plot

and apartment have appreciated from 15,000 per square yard to around 23000 square yard,

seeing an increase in prices by 40 % in just one year. A scheme in the name of special

development zone (SDZ) was launched by the Yamuna development authority for allotment of

plots. Also a mega residential plot scheme comprising of 21000 nos. of plots of different sizes

spread over an approx. area of 5500 acres along Yamuna expressway have been launched. Two

residential townships in the form of plots and apartment s will be developed to facilitate the

commuter. The objective of the scheme is to improve the economic development of the area by

removing the disparity between rural and urban population.

Yamuna Expressway advantages:

The biggest asset of the project is the reduction of travel time between Delhi and Agra to about

150 minutes. The expressway will serve as a platform for the development of residential,

commercial and industrial on both the sides. Education sector will also get a boost as

development of various schools and universities are in the pipeline. A special development zone

for sports promoted by Jaypee group will be developed in a 1000 hectares area comprising of

Buddha International Circuit, the formula one racing track and a hockey stadium. A metro station

will also be developed linking the area to the metro network. Various big corporates are already

planning to set-up heir offices in the region generating the opportunities of employment in the

area. With world class amenities being developed around the area due to the excellent road

infrastructure and connectivity, this area will be a cash cow investment in long term.


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H. MAJOR ISSUES & FUTURE SCOPE FOR ROADS IN INDIA:

Issues:

The road infrastructure development in India is under huge pressure to develop new roads to

meet the growing requirement of Indian economy. In addition to maintenance of roads, the

expansion of existing network is becoming increasingly important. A 2009 study has shown that

the congestion on Indian roads has reduced the speed of vehicles to 30-40 km/h, around 60

percent of roads need maintenance and around 40 percent villages in India did not have access to

all-weather roads. The road fatality rate in India is one of the highest in the world with World

Health Organization reporting around that 1lakh road accidents caused death every year. Due to

the huge congestion on roads the fuel efficiency of vehicles is very low resulting in heavy

pollution. These causes health problems, adverse climate effects and environmental damage.

Future Scope:

Roads are a dominant mode of transportation in India today. Good connectivity in urban and

rural areas has become necessary for the Indian economy. With the growth in Indian economy

the demand for the development transport infrastructure and services has taken a sharp rise. In

order to cope up with the demand the ministry of Road Transport & Highways has come up with

an ambitious plan to construct 20kms of road per day or 7000kms of road per year. The ministryis planning to build 6 and 8 lane highways in the next 4-5 years costing over USD 80 billion.

Also a green field project of building 16000 km of expressways at an investment of USD 100

billion is currently under the pipeline with ministry. To build world class roads and to make a

good progress in road building, new techniques, new technologies and new equipment are being

used. Government is giving encouragement to build more concrete roads than the conventional

bitumen roads as the concrete roads have a life cycle of 50 years and also help save 15% in fuel

consumption. The development of roads and highways by the government has been taken as a

step in augmenting the infrastructure of the country.


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I. REFERNCES:1. NHAI website:www.nhai.org2. Ministry of Road Transport & HighwaysOutcome Budget 2013-143. Jaiprakash associates Investor Presentation4. Infrastructure in India, PwC5. The road-ahead-highways, PwC, 20136. Roads in India, Investment Promotion & Development Cell, 20127. Funding the Infrastructure Investment Gap, Deloitte, 20138. Interim Report of the High Level Committee (Planning Committee), Deloitte 2012
http://www.nhai.org/http://www.nhai.org/http://www.nhai.org/http://www.nhai.org/


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J. APPENDIX I:

road infrastructure

Documents