Long-term projects Priorities Transport Infrastructure and Connectivity G Raghuram

hile presenting the Union having higher volumes of traffic. It Budget 2019-20, the also brought in State involvement in Like , Sagarmala is Union Finance Minister the maintenance of roads. The Phase 3 an integrated garland of projects said that connectivity is the of PMGSY has now been announced along ’s coastline. Apart from W lifeblood of an economy. to upgrade 1.25 lakh kms of roads at facilitating exports and imports, an estimated cost of Rs. 80,250 crore. She stated that the it is also expected to improve Government has given a massive push Digital technology is being leveraged to all forms of physical connectivity to monitor progress of construction and coastal transportation, a sector through Pradhan Mantri Gram Sadak maintenance requirements of roads. that is under leveraged. Of course, Yojana, industrial corridors, dedicated While the PMGSY has increasingly the biggest challenge of coastal focused on need based road upgradation freight corridors, Bharatmala and transportation is the intermodal Sagarmala projects, Jal Marg Vikas and and maintenance, connectivity through UDAN Schemes. In many ways, these services is still a challenge. Many of hinterland and the last mile statements of the Finance Minister the habitations which have single- connectivity. At an aggregate level, reflected the priorities. There was also sided connectivity to a main road do port capacity in India, developed not attract services into the habitation emphasis on related domains, like significantly through private digital connectivity and use of Electric since service providers are not sure of Vehicles (EVs). the possibility of to-and-fro demand participation, has been keeping up and hence the viability. Two-sided with export-import demand. The positive point of this annual connectivity for habitations will enable budget exercise over the years has service providers to go from habitation corridors, with the - been the fact that annual allocations to habitation and develop viable industrial corridor having advanced the are part of a longer term project/ ‘through’ routes. most in terms of perspective planning. scheme to drive reforms and quantum Moving on to industrial corridors- The other corridors are - development in different sectors. The Bengaluru, Bengaluru-Mumbai, above remarks of the Union Finance as of now, there are five industrial Minister highlighted many of such projects/schemes. For example, the rural road development allocations are part of long-term phases of the Pradhan Mantri Gram Sadak Yojana (PMGSY). This project has been one of the most successful ‘yojanas’ of the country. Having begun in the year 2000, the Phase 1 completion reached 93 per cent of the target 178,184 eligible habitations in March 2019, peaking at 140 kms of roads being built each day. The remaining 7 per cent are either not yet feasible or States have taken them up under other schemes. A total of nearly 6 lakh kms of all-weather roads have been constructed. The Phase 2 project started in 2013, with a focus on upgradation of Phase 1 roads

The author is Director, Indian Institute of Management, .

YOJANA August 2019 49 - and - the service part that first gets privatised, started with the , Chennai. More than a ‘corridor’ focus, followed by the hard infrastructure, if followed by the National Highways there seems to be a focus on nodes at all. Examples are the aviation and Development Project (NHDP) and along or near the corridor. This reflects shipping sectors where services are the more recent Bharatmala. The that perceived synergies are still among primarily in private hands following outlay for the Bharatmala Phase 1 is industries in a node rather than along which the hard infrastructure like estimated at over Rs. 5 lakh crore to the corridor. airports and ports are moving into PPPs construct 34,800 kms of highways. mode. Amongst various infrastructure The Bharatmala Phase 2 is to focus Rail-based dedicated freight sectors, railways have been falling on 3,000 kms of expressways, 4,000 corridors (DFCs) are to provide the behind in leveraging PPPs. kms of greenfield roads and support backbone transportation for the Delhi- to State Governments for their road Mumbai corridor and the Amritsar- The road sector has seen significant development. While the road sector has Kolkata corridor. It should be noted experimentation and progress through moved along, it has also been a fertile that the 2016 budget had announced the PPP route. This sector has had the the Kolkata-Mumbai, Delhi-Chennai ground for legal disputes, especially benefit of incessant thrust on PPPs, on matters related to land acquisition and - DFCs. exploring concepts such as tolling, The Visakhapatnam-Chennai industrial and environmental clearances, and non-toll income, viability gap funding, subsequent time and cost overruns. corridor would be supported in part operate-maintain-transfer (OMT), by the Delhi-Chennai and Kharagpur- toll-operate-transfer, hybrid annuity The Central Government initiatives Vijayawada DFCs. This budget has model, etc. Right from the early days of PMGSY and NHDP/Bharatmala addressed the Western DFC and Eastern in late 90s/turn of the century, the have also shown the way for State DFC, currently under construction. idea of a large project with long-term Governments to add to the road network. This, presumably, is to focus on the vision has driven the investments. It Many States have set up State Road completion of the two corridors. The budget had a clear statement of policy that public-private partnerships (PPPs) would be the way to go in enabling modernisation. A total investment of Rs. 50 lakh crore until 2030 has been envisaged. It is hoped that the rail share of freight traffic in tonne kms will go up from the current 35 per cent to 50 per cent by 2032. While this is a good target to strive for an environmental perspective, it cannot happen unless there are appropriate investments and customer-oriented services. It should be kept in mind that in almost all infrastructure sectors, it is

50 YOJANA August 2019 night navigation need to be overcome to make inland waterways competitive. In the aviation sector, after a long hiatus, PPPs in airports are back. The initial five airports (Cochin, , Bengaluru, Mumbai and Delhi) were done in the 2004-07 period. After many concerns related to tendering and bidding, contracts and the environment, the privatisation of airports was put on hold. We have seen activity on this front over the past couple of years, with Navi Mumbai and Mopa (Goa) being awarded. Bhogapuram (Visakhapatnam) is being reviewed by Development Corporations to improve pollution levels and carbon impact the new State Government, after the high density corridors, including significantly, if adopted. earlier Government had awarded it. Six modernised Airports Authority of India through PPPs. Similarly, many States Like Bharatmala, Sagarmala is (AAI) airports have been awarded have schemes such as the Mukhya an integrated garland of projects on the OMT framework to the one Mantri Gram Sadak Yojana (MMGSY) along India’s coastline. Apart from bidder who won all of them. PPPs are to add all weather connectivity to facilitating exports and imports, it expected to improve customer service habitations with population below the is also expected to improve coastal and increase the viability of airports PMGSY levels. transportation, a sector that is under especially through non-aeronautical leveraged. Of course, the biggest Improved road connectivity alone income. challenge of coastal transportation has been a significant driver of the is the intermodal hinterland and In terms of service connectivity, GDP growth in India, given that road the last mile connectivity. At an the Government has done well with the share of freight traffic is over 60 per aggregate level, port capacity in India, UDAN scheme which is now running cent. It has provided major benefits developed significantly through private into its third round where letters of to the trucking industry in improving participation, has been keeping up with intent have been issued to selected reliability of deliveries, utilisation per export-import demand. operators. Under-served airports and vehicle, confidence to leverage digital routes have been mainstreamed, with a Inland water transportation is also opportunities (thanks to improving viewed as a big opportunity, through combination of regulated (subsidised) digital connectivity) for supply chain the Jal Marg Vikas Project. This and unregulated fares. The budget has visibility and enabling new age includes development of national also brought focus on the privatisation trucking companies to positively waterways and terminals at important of , the Government owned disrupt the logistics business. The locations. The challenge would be carrier which has been consistently focus on Electric Vehicles, with all intermodal and last mile connectivity. incurring losses. the attendant incentives announced in In addition, technological challenges, Overall, the budget has recognised this budget, is expected to bring down such as ensuring draft on rivers and the ongoing efforts and the required increase in momentum for infrastructure development. The Union Finance Minister stated that over the next five years, the successful achievement of an investment target of Rs. 100 lakh crore in the infrastructure sector would need extensive planning, monitoring, and implementation. The critical challenges would be land acquisition, environmental clearances, leveraging PPPs and providing for intermodal and last mile connectivity. q (E-mail: [email protected])

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