The Vijayawada–Guntur Highway (Pratapkagitha/CC BY-SA 4.0)

News

India’s highways agency “sets up $110bn project pipeline over next three years”

23 October 2019 | By GCR Staff | 0 Comments

The National Highways Authority of India (NHAI) has created a pipeline of projects worth $110bn that will be awarded over the next three years, according to a report in the Economic Times.

An unnamed source in the federal finance ministry told the newspaper: “We have created a project pipeline of projects worth Rs7-8 lakh crore ($100bn to $110bn), to be recommended to the committee set up by the finance ministry.

“The projects have been identified largely from Bharatmala Phase One and some other strategic ones that the government wants to build.”

The Bharatmala project is a $75bn plan to build 34,800km of highways. About 225 projects, having a total length of about 9,000km, have been approved so far under the scheme.

The Economic Times comments that the roads programme is part of a government plan to use public spending to increase India’s GDP to $5 trillion over the next five years.

The use of road projects to boost economic demand is not a new idea. In 2017, the government announced a similar scheme to spend $108bn on 83,700km of roads over five years.

This plan also named the Bharatmala programme as one of its main elements. However, its implementation led to a rapid rise in the debt taken on by the NHAI, after the private sector showed little interest in undertaking the work on a public–private partnership basis. This eventually reached $25bn, a sevenfold increase over the course of five years, and led to calls for the agency to stop building roads.

At present, India spends about $110bn a year on all kinds of infrastructure. The federal Finance Ministry’s Economic Survey, which accompanies the five-year plan, estimates that a further $90bn should be spent each year to prevent infrastructure being a constraint on economic growth.

Image: The Vijayawada–Guntur Highway (Pratapkagitha/CC BY-SA 4.0)

Further reading: