7 PM | Bharatmala Pariyojana | 29 January, 2019

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What is Bharatmala Pariyojana?

• Bharatmala Pariyojana is an umbrella program for the highways sector that focuses on optimizing efficiency of freight and passenger movement across India
• The objective of the program is optimal resource allocation for a holistic highway development and improvement initiative.
• National Highways Authority of India (NHAI) has been tasked with implementing the programme.

Bharatmala Phase 1 and 2:

• A total of around 24,800 kms will be constructed in Phase I of Bharatmala by 2022
• In addition, phase -I also includes 10,000 kms of balance road works under National Highways Development Programme (NHDP)
• Further, the Gov. has targeted building 4000 km greenfield roads and 3000 km expressways under Bharatmala 2.0 (Second Phase)

Components

Potential Benefits of Bharatmala Pariyojana

1. Increased Connectivity: The programme will enable to connect 550 Districts in the country through NH linkages. Currently, around 300 Districts have NH linkages.

1. Improvement in Freight Movement:

• The Bharatmala network will cater to 80% of inter- district freight movement in the country.
• It is expected to positive impact on the Logistic Performance Index (LPI) of

2. Improvement in Passenger Movement: The network would improve passenger movement on NHs. Further, standardized wayside amenities on the corridors will improve convenience of passengers

3. Improvement in average speeds of vehicles:

• The development of economic corridors and the associated inter corridor and feeder routes will enable improvement in average speeds of vehicles by about 20-25%
• Initiatives of building access controlled expressways with features of “closed tolling” system will further improve the average speeds on highways.

The improvement in average speed would have 3 benefits:

• Improved vehicle utilization resulting in faster breakeven and hence lower freight cost per ton per kilometre
• Improvement in fuel efficiency of the vehicles due to lower idling time, resulting in lower freight cost and faster and reliable freight transit
• Reduction in average inventory carried in freight. It is estimated that the network once developed will enable a reduction of 5-6% in the overall supply chain costs in the economy

4. Employment:

• Upgradation of 24, 800 km of NH network in the first phase is expected to generate roughly 10 crore man- days of employment during the construction phase
• Increased level of economic activities due to development of the Economic Corridor network would provide roughly 22 million permanent jobs

5. Boost to EXIM Trade: Border and International connectivity roads is expected to boost Export-Import (EXIM) trade with Nepal, Bhutan, Bangladesh and Myanmar.

Challenges ahead:

1. Land acquisition: Fragmented land holdings, lack of clear land titles, dependence on local authorities, inadequate land acquisition plan at the time of preparing detailed project reports and lack of methodology for compensation will pose significant hindrance to land acquisition for Bharatmala project
2. Increase in acquisition cost: Compliance to the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR), has led to increase in compensation thereby resulting in a steep increase in acquisition cost.
3. Environmental Clearances: Timely forest clearance and environmental clearances is a major challenge for effective implementation of Bharatmala project.
4. Participation of Private players: private participation is a major challenge due to the continued stretched balance sheets of many infrastructure developers.
5. Impact on Build-operate-transfer (BOT) and Operate-maintain-transfer (OMT) operators:

• The Bharatmala programme may result in traffic diversion from the existing road network to new roads, thereby affecting the toll collection of some of the BOT and OMT projects.
• This will affect the debt serving ability of the operators. The risk of such loan defaults will add to banks’ and financial lenders’ stressed assets and non-performing assets.

6. Finance: Financial institutions are reluctant to finance the infrastructure sector, given the rise in non-performing assets (NPAs)

Conclusion:

Bharatmala Pariyojana, hailed as India’s biggest highways development plan is expected to revolutionize the Indian highways and foster connectivity, growth and development. However, prompt land acquisitions, environment clearances and adequate and timely funding are prerequisites for effective implementation of projects under the programme.

Source: Yojana February, 2019