Building roads for the future

India’s effort to build roads and highways has not been very commendable in last several decades. And that has resulted in creating huge backlog of road building work. Now, the country is trying to catch up with the past by accelerating the road building activities. Kamal Nath had once commented: “We are not building roads for tomorrow; we are catching up with the past.” Thankfully, the sector has started to receive good attention but it’s still a long way to go before the government can achieve the target of building 20 km highways a day.
The biggest issue for the sector was to attract investors which, many analysts say, has started to improve but it will still need massive investment. The government has taken up the task of construction and improvement of about 54,000 kms of national highways under the NHDP (National Highways Development Project), spending about US$80 billion in the next four years. It is expecting huge investment to come from private sector. With the entry of PE, debt and equity funds, the sector would see more inflow of investment in the future.
Good thing to happen to the industry is the participation of private players through BOT projects. This ensures two things— timely completion of projects; and proper maintenance of roads. Since the onus lies with the developers to maintain good conditions of the roads, they would be more committed to build good quality roads. The government is trying to expedite its project-awarding exercise. It has awarded 6,500 km during last one year since end-FY2009 in comparison to just 850 km during FY2009.
Road building equipment manufacturers are responding quite positively to industry’s need by availing all the latest technologies. The sector is now going through a transformational phase where contractors are looking to adopt cost-effective technology. With the entry of bigger players in the BOT projects, the sector looks to see good reform in terms of transparency, use of latest technology and delivering better quality roads.
India needs to keep that momentum going and ensures that it completes all the ambitious projects on time.