The Centre has accorded top priority to cost-effective, pollution free and import substitute transport. Besides, integrated transportation to reduce logistic cost and increased road safety. Union Minister of Roads, Highways, Ports and Shipping Nitin Gadkari explains the government’s strategy In an interview with Sanjay Jog.
Q: What will be the government’s approach for integrated transport since transportation is a major part of industry cost?
A: Our effort is for cost effective, pollution free and import substitute transport. This means implementation of roads, highways, railways, ports, waterways, shipping, and airports in a time bound manner. The plan to connect them, integrate them.
Shipping industry will be made LNG-based which is pollution-free and cost effective. The ministry will encourage operations of sea planes, catamarans, hover crafts and cruise ships. About 2,000 ports are being developed. Along these ports industry will come up, as will cooling plants, cold storages and thereby our economy will become river oriented. This will be able to reduce the logistics cost to 12% from 18% and our exports will rise by 20-30%.
Secondly, ethanol, bio CNG, and bio diesel will be promoted. The government will put in place necessary standards for it. This apart, the sewage water in the municipal corporation limits will be used to produce methane and from that same water bio CNG will be manufactured after separation of CO2. We have successfully implemented it in Nagpur where water is sold to the state distribution utility MahaVitaran.
On Ganga river the government is currently implementing about 50 to 60 projects.
The Dholakua to Manesar Matrino electric (cable car facility) will be launched. I strongly feel that mass rapid transport (based) on electric is our future. Therefore, first priority is to waterways, second to railways and third to roads.
Lithium ion battery will be produced in the country which will totally transform the transport sector.
I do agree that the road traffic be discouraged but the reality is it is increasing while the traffic on railways in falling. There are five lakh accidents killing 1.50 lakh people (annually) as on date. Besides, there is diesel pollution. I reiterate that import substitute, cost effective and pollution free that is waterways transport is necessary along with mass rapid transport on electric that is future.
Q: What is the experience of hybrid annuity model in the road sector?
A: Projects of over Rs 80,000 crore are currently being developed under this model. When I took over in May 2014 there was little interest from the developers to bid for road projects. There was no response for 17 build operate transfer (BOT) projects. Therefore, the government awarded Rs 60,000 crore worth projects under the engineering procurement and construction (EPC) model.
Thereafter, the government came out with hybrid annuity model wherein the appointment letter is not given to the developer unless and unless 80% land is acquired. Land acquisition is done by NHAI. Besides, it is the responsibility of NHAI to procure all clearances including forest and environment, utility shifting, land acquisition to be done by NHAI so also environment clearance, utility shifting. Under this model, the government/NHAI provides 40% grant while 60% to be mobilized by the developer of which 30% will be equity and the balance to be raised through banks. Practically there is no risk involved in it. Moreover, NHAI will collect toll and it will give annuity plus 3% profit annually to the developer.
Q: What is the present status of stranded projects in the road sector?
A: Problems of almost all projects are now resolved. There were 403 projects worth Rs 3,85,000 crore (that0 were stuck due to several reasons when the government assumed power. Banks and lenders were quite worried fearing that the projects may turn NPAs.
The government swung into action and about 21 cabinet decisions were taken to help bring those projects on track. I personally held number of meetings with bankers and lenders and in some cases prepared to give money to those developers who have completed 50% work.
At present only five to seven of such projects are remained and their issues too will be sorted out. Our policies are time bound, transparent with positive approach and corruption free.
Q: What is the government’s plan to promote bus ports across the country?
A: NHAI’s mandate includes development of convention centres, bus ports and engage in transport related activities. Prime Minister sent me to Gujarat to see how the state government there has developed bus ports. My ministry will prepare a policy for all states where in NHAI will invest money for the transformation of bus ports, construct them and thereafter profit will be shared 50% between NHAI and respective states. NHAI will do the construction on the state government land.
The idea is to make bus ports five star like Chhatrapati Shivaji International Airports at Sahar in north west Mumbai where there will be underground parking, shops and malls will be developed.
If states want to develop such bus ports on their own NHAI will provide funds to them. There could be 3,000 to 4,000 such bus ports that can be developed across the country. The ministry is expected to take decision in a fortnight in this regard.
Q: You personally are quite bullish on India’s internal waterways sector. What steps are being taken to promote it?
A: I am of the firm view that internal waterways will be a game changer and invite investors to join its development. To boost this sector, all major ports have been asked to set up subsidiaries, which will leverage dollar-denominated billing to raise low-cost funds.
My ministry’s total budget is Rs 1,800 crore. It is not possible to undertake 20,000 km of the inland waterways projects which will require an investment of over Rs 80,000 crore. The new initiative will start with the largest container port in the country, Jawaharlal Nehru Port (JNPT). Inland waterways currently do not have financial credentials. We want to use JNPT’s financial credentials for raising foreign loans.
Nearly Rs 50,000 crore in low-cost borrowings can be raised by JNPT alone through receivables. The ministry has also written to Union finance ministry to get five per cent of the corpus coming from a cess on petrol and diesel for inland waterways.
This apart, a separate company will soon be formed for the implementation of Sagarmala project which envisages total investment of Rs 12 lakh crore. Of this, Rs 4 lakh crore will be spent on modernisation of ports, road and rail network and construction of new ports.
Already the Port Railway Connectivity Corporation has been formed to undertake port railway connectivity works. NHAI through a separate division will develop roads to connect ports under the Sagarmala project.
The ministry has already awarded mechanisation and modernisation of ports worth Rs 70,000 crore while some more works of the order of Rs 50,000 crore will be undertaken in the near future. Our aim is to complete all these works by 2018.
Of the 12 lakh crore, Rs 8 lakh crore will be spent on the development of 27 industrial clusters which will take time.
Q: What is the fate of the new Motor Vehicle Act?
A: I had introduced the bill in the Lok Sabha and now it has been referred to the Parliamentary Standing Committee. There are in all 59 proposals mainly to deal with the road safety. I expect the standing committee’s report in next session and hope that the bill will get Parliamentary nod in the same session. The new act is expected to drastically change the transport sector.
My highest priority is to save lives and I am really working quite hard on it. The national highways will be increased from the present level of 96,000 km to two lakh km. NHAI will construct all concrete roads which will have 50 year life. The developer will maintain them.
Besides, NHAI is spending Rs 11,000 crore to improve 786 black sports where maximum accidents too place with high casualties on national highways.
Furthermore, state governments will be entitled for finance from the Central Road Fund for the improvement of black spots and thereby reduce accidents and make road journey safe.