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June 15, 2008
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A Matter Of Economics
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June 15, 2008




Page: 5/41

Home > 2008 Issues > June 15, 2008

A Matter Of Economics

The road UPA won?t take

By R. Balashankar

For the Vajpayee government national highway programme was one of its most credible success stories. For Dr Manmohan Singh, this is one programme the government would like to keep under wraps. Under UPA it has failed miserably. Only that it took four years for the Prime Minister to realise it.

Good roads save millions of gallons of fuel. And fuel the growth engine. How lackluster a development story can be. Vajpayee government in 2000 conceived the world?s largest infrastructure project the National Highway Development Programme?of building 13,150 km of world-class highways which many in those days dubbed a pipe dream. Under NDA the projects were moving two years ahead of schedule and by 2007 the entire project would have been completed. This would have given a major boost to the country?s super power dreams.

Look at the highway projects under the UPA. The projects in the last four years have limped, steeped in corruption, spending the same amount of money as usual, mired in controversy of appointing and removing of NHAI chairmen allegedly for their failure or success to grease the palms of political bosses and shifting completion targets. It is one of the most scandalous sagas in UPA failure. But there is no explanation, no accountability.

Last week the Prime Minister and the Planning Commission reviewed its progress. It was found that ten stretches of National Highway Development Project-1 (NHDP-1) involving a distance of 130 km are yet to be completed even after eight years of conception.

For the Vajpayee government, national highway programme was one of its most credible success stories. For Dr Manmohan Singh this is one programme the government would like to keep under wraps. Under UPA it has failed miserably. Only that it took four years for the Prime Minister to realise it.

The failure is on all counts and the situation has reached a stage where even the original NHDP-1 programme involving the construction of 5846 km Golden Quadrilateral (GQ) to connect the four metros?Kolkata, Chennai, Mumbai and Delhi?was to be completed by December 2004. It is almost where it was left in May 2004 after completing 85 per cent nearly two years ahead of schedule by the NDA. And the UPA after four years has no clue as to when it will be completed.

This project alone was envisaged to create employment to 2.5 lakh people and 10,000 supervisory staff per day generating 18 crore mandays in phase one. The completion of GQ alone would have resulted in an annual saving of Rs 8,000 crore (2001 estimate) on fuel, reduced wear and tear of vehicles and faster transportation. To put the project on fast track the NDA had given many incentives such as total duty exemption on road building equipment import, special bonus for contractors who completed the work before schedule. Under the NDA of the 103 projects 90 were solely under Indian contractors and the remaining were joint ventures.

In the last four years this reached 96 per cent from 85 per cent when the NDA demitted the office delaying the project already by four years.

The UPA?s poor record on this came to the PM?s notice at the meeting of the Prime Minister?s committee on infrastructure last week.

It was found that the situation is equally bad for the NHDP-II projects as well involving construction of North-South-East-West (NSEW) Corridor, which was originally targeted to be completed by 2006. It is now postponed to complete by 2010 end. But even this target will not be met. So far only 1500 km of the 7800 km is built. The project is crawling.

The NSEW Corridor project is vital for the economic growth of the North-east. It is natural to ask why the departments and officers, who were so successful, under the NDA, present such a poor report card under UPA. The Indian Express (May 29) reported that last year national highway projects crawled the slowest ever. A 56 per cent completion rate across all phases, down from 81 per cent in 2004-05 but spending as usual.

Against the set timeframe of five months the NHAI, according to the Planning Commission took 20 months on an average to award a project. And the projects moved sluggishly. Incomplete surveys, land acquisition problems and delay in awarding contracts have messed up the road project. Under the UPA the award of build-operate-transfer (BOT) contracts in NHDP-III has also been languishing. Under this, involving four-laning of a targeted stretch of 12,109 km, only 2,075 km contract has been awarded so far. Another stretch of 3,000 km in Phase-IV has almost been abandoned as unviable. Added to the mess is the six-laning work of Golden Quadrilateral at an estimated cost of Rs 41,000 crore. This work has also been taken up while the original completion schedule of the GQ remains incomplete.

Vajpayee had made the highways project his vision statement. It is natural for great political leaders to make blockbuster achievements to link to their legacy and give them priority like the New Deal of Roosevelt. Vajpayee could achieve fantastic success because of the executive freedom he accorded to the then Minister for Highways Maj. Gen. (Retd.) B.C. Khanduri. He brought genuine private-public partnership into this ambitious initiative. The UPA has been decidedly different. It looked at road building as a lucrative and rewarding PWD like opening. The result. The belief that there was money to be made by awarding contracts to firms that build sub-standard roads, which have to be rebuilt again and again after every monsoon. This has been the sort of approach T.R. Baalu is comfortable with. Institutionalised transparency, a hallmark of the NHDP that the UPA inherited, has become the casualty in these years. Infrastructure deficiency, which is the biggest bottleneck for growth, is proving to be the UPA legacy.

(The views expressed in this column are personal. The writer can be contacted at editor@organiserweekly.com)




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