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The NHDP covers about 55000 km at an estimated cost of around Rs. 2, 20,000 in over 7 phases,
most of which is still under progress.
3 Sanctioning of Projects
Initially, the Ministry of Road Transport & Highways (MoRTH) identifies the road
stretches that are to be built or upgraded.
It then proposes the inclusion of selected stretches under one of the phases of NHDP.
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Once the CCI approves, MoRTH transfers the stretches under the phase to the NHAI for
implementation
NHAI conducts feasibility studies for each of the individual projects by preparing
Detailed Project Reports.
Then, NHAI sends the project to the Public Private Partnership Approval Committee
(PPPAC).
On obtaining approval from PPPAC, NHAI sends the project to the CCI for final
sanction.
4 Award of Projects
After the final sanction from the CCI, the process of engaging a concessionaire begins consisting
of various stages [3]
Pre-Qualification of companies based on their technical and financial expertise and their past
Thus, the project is awarded to the successful bidder and an appointment date is fixed on which
the NHAI and the firm officially signs the documents and the project is transferred to the
concessionaire. The frim begins the construction activity from the date of appointment.
Central governments Gross Budgetary Support (GBS) and Additional Budgetary Support
(ABS)
Dedicated Central Road Fund (CRF) obtained by share on levy of fuel cess
External Assistance from International Institutions like ADB, World Bank, JBIC, etc
(very limited)
Private sector financing under PPP Models like- BOT, Annuity, Special Purpose Vehicles
(SPVs), etc
Funding under Special Accelerated Road Development Programme For North East
(SARDP-NE)
Market borrowings
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6 Land Acquisition
Until the enactment of National Highways Act (NHA) in 1956, lands for National Highways were
acquired under Land Acquisition Act 1894. The implementation of NHA hastened the land
acquisition process significantly. [4]
The NHA appoints an authority for the purpose of land acquisition which can either be
constituted from within NHAI or appointed at the district level, usually the revenue
department.
Unlike LAA which leads to tremendous delay in land acquisition, under NHA possession
can be taken any time after the declaration is made by giving a notice of 60 days to the
landowner.
NHA does away with the Urgency clause present in LAA wherein which the land could
be acquired after issuing a 15 day notice period.
7 Execution of Projects
The various modes of execution of highway projects are
Engineering, Procurement and Construction (EPC) mode: Under this mode projects are
funded entirely by Government of India through NHAI.
Build Operate and Transfer (BOT- Toll Based): A type of Public Private Partnership
(PPP) under which the Private firm is responsible to finance, construct, operate and
maintain the road stretch awarded to it. In return, the firm is entitled to collect toll during
the concession period.
Build Operate and Transfer (BOT- Annuity based):Under this mode, the responsibility to
finance, construct, operate and maintain lies with the private firm and the toll collection is
carried out by NHAI. In return, the private firm receives a fixed annual payment.
Of the above three modes, the later two come under Public Private Partnership (PPP) model
wherein which funds from private sector are used for highway development.
After the final approval of CCI and once the successful bidder is declared, the successful
bidder forms a Special Purpose Vehicle (SPV) for the execution of the project.
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The overall execution is monitored by NHAI directly or the NHAI appoints specific
consultants for monitoring and quality control.
Flow chart of establishment of Public Private Partnership (PPP) Projects in NHAI [5]
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The Central Government may ask the State Government under which the NH section lies
to execute the maintenance work by providing them with adequate funds.
The Central Government has to power to enter into contract with any firm for the
maintenance work of National Highways by following general procedure.
In case of PPP model, the responsibility to maintain the National highways is vested upon
the concessionaire. The concessionaire has to do periodic maintenance work on the
stretch upto the end of the concession period.
A major challenge in NH maintenance is that the funds allocated for maintenance is a mere
40-50% of the actual requirement. This can be attributed to the cut-throat competition in road
network expansion by the alternate governments. The emphasis is primarily on construction
of new facilities. As a result the maintenance of highways takes a back seat.
References
1. NHDP Building World Class Highways, http://www.nhai.org/nhdpbulding.htm (August 6,
2016).
2. Report of the Core Group on Financing of National Highway Development Programme,
The Secretariat for the Committee on Infrastructure (Planning Commission), pp: 11.
3. Overview of the Bidding Process, http://www.nhai.org/biddingprocess.htm (August 6,
2016).
4. Sharma, V.K., and Chaudhary, T. (2009), Land Acquisition Process for National Highways,
India Infrastructure Report 2009 LandA Critical Resource For Infrastructure, pp: 62-65.
5. Report of the Comptroller and Auditor General of India on Implementation Of Public Private
Partnership Projects In National Highways Authority Of India, Performance Audit, Union
Government (Commercial) Ministry of Road Transport & Highways, Report No. 36, pp:22.
6. Responsibility for maintenance of National Highways, http://www.nhai.org/act1956.htm
(August 7, 2016)
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