National Highways Authority of India’s

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National Highways Authority of Indias

Golden Quadrilateral Project


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Why Golden Quadrilateral?

INDIAN ROAD NETWORK

Length (in Km)

National Highways 65,569

State Highways 131,899

Major district roads 467,763

Village and other roads 2,650,000

Total 3.315 million

National highways are less than 2 percent of network but carry 40

percent of total traffic


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About NHAI

The National Highways Authority of India was constituted by an

act of Parliament, the National Highways Authority of India Act,1988.

NHAI is responsible for the development, maintenance and

management of National Highways entrusted to it and formatters connected or incidental thereto.

The Authority was operationalised in Feb, 1995


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Overview of NHDP Project

The National Highways Development Project is a project toupgrade, rehabilitate and widen major highways in India to a higherstandard.

The project was implemented in 1998.

"National Highways" account for only about 2% of the total lengthof roads, but carry about 40% of the total traffic across the lengthand breadth of the country.

NHDP is managed by the National Highways Authority of Indiaunder the Ministry of Road, Transport and Highways


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NHDP Project

Phase I:

Golden Quadrilateral

Phase II:

North-South and East-West Corridors

Phase III:

Build, Operate andTransfer (BOT)

Phase IV, V:Widening of highways

Phase VI, VII:

Expressways and Ringroads

Phase IV, V:

Widening of highways


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About Golden Quadrilateral

The Golden Quadrilateral (GQ) is the largest express highway project

in India launched by former prime minister Atal Bihari Vajpayee,however the credit should go to the prime minister Dr. Manmohan

Singh, as he was the one who completed most part ( about 75%) ofthe project.

GQ is the first phase of the National Highways Development Project

(NHDP), and consists of building 5,846 kilometers of four/six lane

express highways connecting Delhi, Mumbai, Kolkata and Chennai(thus forming a quadrilateral of sorts), at a cost of Rs. 60,000 crores


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Agencies/Instituitions involved in

implementation of the project

Around 115 stretches

GQ resulted in creation of NH 2, NH 4, NH 5, NH 6, NH 7,NH 8, NH 46, NH 60, NH 76 and NH 79

GQ was funded mainly by MORTH, NHAI, SPV, ADB and BOT

More than 75 contractors were involved


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Market Demand Analysis


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Need of Golden Quadrilateral

Indias economy had long suffered from the National highway

systems chronic capacity shortage

Prior to implementation of NHDP project, 40% were single lane,

57% were two lanes and remaining 3% accounted for four-lanehighways

The total investment required to implement these programs was

estimated at $37 billion

National highways are less than 2 percent of network but carry

40 percent of total traffic


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Government policy

Declaration of the road sector as an industry

Provision of capital grants subsidy up to 40% of project cost on case-to-case basis

Duty-free import of certain identified high quality construction plantsand equipment

100% tax exemption for 5 years and 30% relief for next 5 years, whichmay be availed of in 20 years

Provision of encumbrance-free site for work, i.e. the Government shallmeet all expenses relating to land and other pre-construction activities

Foreign direct investment upto 100% in road sector

Easier external commercial borrowing norms

Higher concession period, up to 30 years

Right to collect and retain toll


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Project details


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Technical Analysis


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F

EW

S

TRET

CHES


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Features

Type: Civil Engineering Cost

Cost: Rs. 5 to 10 Crore per kilometer

A well designed rural road with 3.75 carriageway, shoulder andcross-drainage works may cost between Rs. 6 to 25 lakhs,

depending on the construction conditions A proposed project is expected to have various alternatives in

terms of its way of implementation

A Study of highway economics and finance involvesunderstanding of

Various cost components of highway projects

Economic feasibility of alternative highway projects

Decision on scheme of investment on a project at its various stages

Funding source and policies for road projects


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Cost components

Agency Cost

Construction Cost

Maintenance Cost

User cost

Vehicle Operating Cost

Cost due to traffic congestion and restraint

Cost due to accident

Cost of travel time


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Operations

Completely owned, financed and operated by private body

Build, Operate and Transfer approach

Finance, build and lease approach etc

GQ considered BOT as the most effective form of privatization.

Several variations of BOT approach exist, like, build, own andoperate (BOO), build, own, operate and sell (BOOS), build,

operate, lease and transfer (BOLT) etc


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Financial Analysis


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Parameters used in estimating Financialrequirements

Time Horizon

Interest rate

Inflation Salvage value

Present worth

Capital recovery factor


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NHAIs Finance Mechanisms

Annuity based model

Cess on Diesel & Petrol @Rs 2 Per liter

Capital grant up to 40% of project cost

Issuance of bond by NHAI guaranteed by government

Other funding agencies includeWorld Bank amounting $400mn andAsian Development Bank amounting $200mn every year

Issuing of Infrastructure bonds

Set up its independent companies Moradabad Toll Bridge Companyand Vadodara Halol Toll road

Company for getting sops and getting funds from the markets. ThroughBuild, Operate and Transfer schemes which include SPVs (SpecialPurpose Vehicle), Annuity and Shadow Tolling


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Financing Plan for Golden Quadrilateral

Source Rs. Cr

Total Cost 54,000

Revenue

Cess on Petrol and Diesel 20,000

External assistance 20,000

Market borrowings 10,000

Private sector participation 4,000


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Funds would be managed by the followingagencies

Ministry of rural development for component meant for rural

roads

Ministry of Surface Transport (MoST) for remaining funds meant

for National highways, state roads, roads for interstate andeconomic importance and rail safety works


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Thank you

By

LumpiGokul

Maheedhar

Documents

National Highways Authority of India’s