India fast tracks road infrastructure

India is ramping up its road infrastructure – quadrupling highway construction in six months – in a bid to accelerate economic growth in Asia's third-largest economy. "Our aim is to scale up construction to 20 kilometres of new roads a day by April," said Roads Minister Kamal Nath. This will ramp up the current two kilometres of new roads to nine kilometres. "Two to nine does not sound too much... but two to nine means a 400 per cent jump," Nath, a former trade minister, told AFP. "As India moves on its growth trajectory, the biggest issue we have to address is the infrastructure deficit," he said ahead of a trip to the annual World Economic Forum at the Swiss ski resort of Davos, where he hopes to sell India as an infrastructure investment hub.

Connectivity is a priority not least because it will "impact trade, agriculture and industry" by adding two per cent to India's GDP and creating billions of dollars worth of economic activity, according to Nath.

As it stands, India is expected to clock almost eight per cent growth up to March 2010 – infrastructure bottlenecks and the global economic downturn notwithstanding. Given India's track record, Nath's proposals are revolutionary, said AFP. India boasts the second- largest road network in the world after the United States at 3.4 million kilometres.

But most projects have been mired in controversy over rigging of contracts and allegations of corruption resulting in inordinate delays and cost overruns.

The booming auto sector is making matters worse, adding nearly 10 million vehicles to road traffic last year alone. In rural areas, crumbling single-lane roads make it difficult to get agricultural products to market.

"We must recognise that in a country which has a young age profile, a country which is growing at eight per cent, there is bound to be an increase in vehicular traffic," said Nath. "I think we will need another 12 or 15 years to meet that new demand that is being created on a daily basis."

Even as trade minister, Nath was involved in planning large infrastructure projects – a case in point being the Delhi-Mumbai Industrial Corridor, an Indo-Japanese collaboration. The project envisages clusters of special economic zones and ports, on a slender road corridor over the 1,160 kilometres connecting India's political and financial capitals.

Nath has promised to add 28,000 kilometres of road to the existing 70,500 kilometre network of highways by 2014 besides thousands of kilometres of district and village roads. He has begun streamlining procedures -- making it easier for investors to exit investments, introducing stricter penalties for firms overshooting deadlines, inviting domestic and foreign firms for feasibility studies, designing, construction and management of roads.

But some are wondering whether his goals were not a trifle unrealistic. "China has only managed to build 17 to 18 kilometres of roads a day after decades of economic development. So I think the targets are highly ambitious," said Nitin Bhasin, analyst at the London-based investment bank Noble Group Ltd. "I think 14-15 kilometres a day would be more realistic," he told AFP. Others say Nath's optimism is not entirely misplaced. "I think 20 kilometres a day is doable," said economist Paranjoy Guha Thakurta. The investments of up to $45 billion (Dh165.15bn) in foreign and domestic private capital over the next few years that Nath is hoping to net, will not prove too difficult, said Thakurta, a columnist at the Economic Times. "The Indian economy is doing better that most... So India is a good place to invest."

 

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