Sunday, July 14, 2024

₹20 Trillion Highway Plan Prepared, Potential Replacement for Bharatmala-2

The second phase of the Bharatmala highway development program could be scrapped in favor of a more extensive ₹20 trillion, 20-year project, as disclosed by two individuals with knowledge of the situation.

Reportedly, the new approach involves transitioning to the more ambitious Vision 2047 plan, which entails the construction of approximately 50,000 kilometers of highways, with a significant portion, around 30,000-35,000 kilometers, being fenced-off expressways. This ambitious endeavor would necessitate an investment exceeding ₹20 trillion.

The government had initially approved the less ambitious Bharatmala initiative in 2017, when the Cabinet endorsed the first phase of the program.

In the first phase of the Bharatmala highway development initiative, a substantial 34,800 kilometers of highways were constructed, facilitating improved connectivity between existing road infrastructure and various industrial corridors.

The eagerly anticipated approval for the second phase, which was to involve the construction of approximately 5,000 kilometers of fenced-off highways with a budget of ₹3 trillion, was expected to be granted this year. The Ministry of Road Transport and Highways (MoRTH) had finalized a cabinet note for expedited approval.

However, there has been a shift in strategy within the ministry. It is now considering discontinuing the Bharatmala Phase 2 plan and instead presenting a fresh cabinet note for the Vision 2047 plan. The latter is in the final stages of preparation and encompasses the identification of new road alignments and the completion of detailed project reports (DPR) for greenfield projects, as disclosed by one of the sources mentioned.

The new Vision plan will also integrate components of the Bharatmala 2 program, which also focuses on establishing a network of expressways across the country.

At the time of this report, there was no response to an inquiry directed to MoRTH.

MoRTH recently presented the Vision 2047 plan to the council of ministers and anticipates separate cabinet approvals for specific projects under this plan before it can proceed with implementation.

Although the total cost of all projects under the Vision plan is yet to be determined, given the past record of Bharatmala, the investment is likely to be substantial.

Anurag Jain, the Secretary of MoRTH, had previously indicated that the construction of greenfield expressways was seen as a way to significantly reduce logistics costs in the country. Under Vision 2047, they are aiming to develop a network of greenfield access-controlled highways.

The ministry is working on the Vision 2047 document with the expectation of continued financial support from the finance ministry to complete capital-intensive, long-gestation projects.

In the current fiscal year, MoRTH has received a record allocation of ₹2.7 trillion, the majority of which will be utilized by the state-run National Highways Authority of India (NHAI).

The ministry is also working on attracting private investment for greenfield roads by reviving the ‘build-own-transfer’ (BoT) model, which was previously instrumental in driving the sector’s growth. This is expected to alleviate financial pressure on the government.

Vision 2047 is expected to be significantly larger than Bharatmala, with the objective of building 30,000-35,000 kilometers of access-controlled highways before India’s 100th Independence anniversary in 2047. In fact, the ministry hopes to complete the work much sooner, within the next 13-14 years, provided adequate funding is secured. The Vision program is also expected to encompass the projects outlined in Bharatmala.

As of July 2023, 47 expressways, totaling just over 5,000 kilometers in length, were operational, and an additional 9,000 kilometers were under construction.

Once Vision 2047 is approved, another set of 27-30 projects may be initiated to build 30,000 kilometers of access-controlled or fenced-off highways spanning the entire nation, expanding the total network of such roads to approximately 45,000 kilometers.

The National Highways, with a combined length of about 145,000 kilometers, form the critical arterial network of the country. In total, there are over 65,000 kilometers of road projects in progress, with a cost exceeding ₹11 trillion.

To date, work on more than 39,000 kilometers of road has been completed, while work on the remaining 26,000 kilometers is still in progress.

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