In this blog we will discuss about the Bharatmala Pariyojana. If a country wants to be economically strong then it must strengthen its foundation first. Foundations like road, railways and maritime shipping infrastructure plays a crucial role in a country’s economy. This ultimately boosts the economy. India is a fast growing economy and this flagship project “Bharatmala Pariyojana” by government can be a game changer. It can increase crate movement, cargo shipment, internal connectivity through road and decrease the logistic cost. But what is the planning behind this project? What benefits will it provide to Indian government? How much will be the cost? Which countries are going to invest in this project? Can India achieve the goal of becoming a major economic power through this project? Continue reading to know the answer of these questions.
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WHAT IS BHARATMALA PARIYOJANA PROJECT
- Bharatmala Pariyojana project was approved by the Union Cabinet on 25th October 2017. It is the 2nd largest Highway construction project in India after NHDP.
- In NHDP 50,000 KM of road was constructed. These road gives India its strong connectivity across the countries.
- In the same context second project has been launched. It will improve the connectivity in economic corridors and border areas by enhanced cargo movements.
- It is expected to generate 100 million man days of job and 22 million jobs opportunities. This will increase the economic activity across the whole country.
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BILLING ROUTES FOR THIS PROJECTS
There will be many billing routes for the construction of this project. This include debt fund, budgetory allocation, private investment, toll operator transfer model etc.
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1ST PHASE OF BHARATMALA PROJECT
The 1st phase of this project has already started where a total of 34,800 KM of roads is to be constructed. This is divided in following manners.
- 9000 KM of economic corridors
- 6000 KM of feeder routes
- 5000 KM of international border road under the “National Corridors Efficiency Program.”
- 2000 KM of border and International connectivity roads
- 2000 KM of Coastal and port connectivity roads
- 800 KM of express way
- 10,000 KM NHDP
Along with these some flagship express ways and economic corridors are there whose construction is going on under Bharatmala Pariyojana project. They are Delhi – Mumbai express way, Bengaluru – Chennai express way, Delhi – Dehradun economic corridor, Kanpur- Lucknow express way, Chennai – Salem corridor, Raipur – Vizag, Amritsar – Jamnagar and Delhi – Katra express way. Some of these are yet to be started and some are under construction.
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PROGRESS OF 1ST PHASE OF THE PROJECT
In February 2021, Union minister of Finance and Corporate Affairs; Nirmala Sitharaman provided the following updates on Project Bharatmala.
- More than 13,000 KM of road construction is under process which accounts for around 3.3 Lakh Crore out of the 5.35 Lakh Crore budget alloted.
- An enhanced budgetary allocation of 1.18 Lakh Crore was also done.
- She also informed that 3800 KM of road construction has already been completed.
- Tender for 8,500 KM will be provided till March 2022 and 11,000 KM of National Highway corridor construction will be finished till 2022.
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SALIENT FEATURE OF BHARATMALA PARIYOJANA PROJECT
- Starting from Gujurat Bharatmala Pariyojana project will run through Rajasthan, Punjab, J&K, Himachal Pradesh, Uttarakhand, Uttar Pradesh, West Bengal, Sikkim, Assam, Arunachal Pradesh, Manipur, Indo-Burma border and finally it will end at Mizoram.
- International trade is a key aspect in this project and there is special focus on North Eastern state.
- The road quality will be of higher standards.
- It is an Umbrella Scheme under which many road construction Schemes are included.
- Due to the higher magnitude and short period of time, it has been segmented into 7 phases.
- To complete the 1st phase in time, departments are constructing 18 KM of road per day. The deadline is the end of 2022.
- There will be construction of Elevated Corridors, Bypasses, Ring roads, Lane Expansion and Logistical parks. It will help to minimize the overcrowding of transport vehicles.
- Roads will be linked in the boundary regions like Myanmar, Bangladesh, Bhutan and Nepal for international connectivity.
- All these projects are empowered by “Appraisal and Technical Scrutiny Committee” of Ministry of Road, Transport and Highways.
PROBLEMS FOR THIS PROJECT
- The project is economically important and vast. It is extremely necessary for employment and development. But according to “Investment Information and Credit Agency of India” (ICRA) this will be delayed by 4 years. Thus it will be completed by 2026 instead of 2022.
- A report published by ICRA in February 2020 had a detailed analysis of Bharatmala Pariyojana project.
- According to that report till February 2020; 246 road project were awarded in phase-1 of the project. This accounts for 10,100 KM of road and the cost was 2,38,413 crore.
- So the per KM cost of construction is 23.80 Crore which is 54% higher than initial estimated cost of 15.52 Crore.
- They also said that COVID-19 is having a serious impact on the project and its valuation. This can also result in delay of Asset Monetization plan by NHAI. This Asset Monetization plan will operate after the lunch of Toll-operate-transfer and Infrastructure Investment Trust (InvIT).
- According to this report the project was about to take-off after the Normalcy restoration in Fiscal year 2021 but normalcy has not yet been restored completely.
- In February 2020, Subham Jain, senior vice-president of ICRA, mentioned that tender for 16,219 KM of Bharatmala project was still waiting to be rewarded. This accounts for 47% of overall project.
- Debabrata Mukherjee, Head of NIIF (National Investment and Infrastructure Fund) in January 2020 informed forbes that now-a-days banks are facing problems for sanctioning long-term projects. This is because it creates a significant Asset Liability Mismatch.
- Earlier in history the commercial institution were funding the infrastructure projects but now they have become Commercial Banks. Therefore they are also facing the same problems which a banking institution face.
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- Before starting any project, it is mandatory to acquire 80% land area. This area becomes 90% in Engineering, Procurement and Construction projects. And being such a massive project, its not easy to acquire all these land.
- Environmental clearance is another problem for this projects.
- NHAI will have to 1st complete this project and operate it. Then only they can monetise it. But raising funds from such big projects will become a difficult task.
- According to Forbes, NHAI is heavily depending upon the borrowing amount as it has increased from Rs 75,395 Crore in 2017 to Rs. 1.79 Lakh crore in 2019. And some expert are asuming it to increase more till fiscal year 2022.
This was a detailed analysis of Bharatmala Pariyojana project. There are many problems against it but we hope that it will rise as a landmark project in future. Thanks for reading. If you like it please like our FACEBOOK PAGE to stay updated.