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Gujarat model to manage highways

As the UPA government approaches the end of its tenure, India’s roads and highways sector has hit a roadblock. In the first few months of 2013, two major bidders had backed out of contracts with the National Highways Authority of India (NHAI) they had won earlier. They claimed that delays in approvals have led to major cost escalations and have asked for relaxation in the payment of premiums. During the last financial year, the NHAI has not received a single bid for building highways in the public-private partnership (PPP) mode. Many projects awarded in 2011-12 and 2010-11 on this basis have yet to take off. The situation is so bad that during 2012-13, the UPA government could award only 24 per cent of its target of 9,500km of road projects.

Driven to desperation, the government has quietly dumped the much-touted PPP model and decided to revert to the traditional engineering procurement construction contracts (EPCs), in which the government funds highway constructions through taxpayer’s money. This is bound to upset calculations of the Planning Commission which envisaged that PPP projects would account for at least a quarter of the total investments in highway infrastructure by 2020. Builders attribute their reluctance to invest in highway projects to delay in land acquisition and environmental clearances.

As NHAI returns to the EPC mode, fears about quality of roads and crony capitalism are bound to haunt the highway sector. New Delhi will do well to take a leaf from the Gujarat government’s management of the highways. Following the Chinese model, it is given sufficient powers at every level of the decision making and execution process. At the same time, it has ensured that there is total accountability at every level and has been taking quick action in case of negligence or wilful default. The state’s highways system has seen a massive expansion in the last ten years without compromising on quality and the World Bank has asked other states to replicate the Gujarat model.

 
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