Higher land acquisition payout boosts road construction pace

The National Highways Authority of India (NHAI) paid Rs19,020 crore for acquiring 9,285 hectares in 2015-16; road building at a record 19-20km a day


The National Democratic Alliance in last fiscal paid an average of Rs2 crore per hectare as compared with Rs1.35 crore/hectare in fiscal 2015. Photo: Hemant Mishra/Mint
The National Democratic Alliance in last fiscal paid an average of Rs2 crore per hectare as compared with Rs1.35 crore/hectare in fiscal 2015. Photo: Hemant Mishra/Mint

New Delhi: Increased compensation for land acquired by the National Highways Authority of India (NHAI) is one of the major reasons for growth of road building in the country, at a record 19-20 km a day.

Data by the ministry of road transport and highways shows that during 2015-16, the NHAI paid Rs.19,020 crore for acquiring 9,285 hectares. This is the most it has paid out by way of compensation in one year when compared to disbursements in the last five years.

The National Democratic Alliance (NDA) in the last fiscal year paid an average of Rs.2 crore per hectare as compared with Rs.1.35 crore/hectare during 2014-15.

A road transport ministry official, requesting anonymity, said: “If you see 2015-16, the compensation paid for the acquired land is the highest in the last one decade. During the UPA (United Progressive Alliance) regime, the average compensation varied between Rs.50 lakh per hectare to Rs.92 lakh per hectare. This substantial increase in land awards is one of the main reasons that the national highway construction in the country is at an all-time high.”

The official added that apart from compensation, setting up of Land Acquisition cells and increased delegation of authority to subordinate officers are also giving impetus to land acquisition, and with the proposal to acquire 80% of land before allotting construction work for a highway, land acquisition has become a priority for starting any national highway project.

In 2015-16, most of the land acquired for national highway construction was in Rajasthan (1,264 hectares), Haryana (1,662 hectares), Maharashtra (988 hectares), Odisha (940 hectares) and Karnataka (676 hectares). There were three states where no land was acquired—Assam, Goa and Meghalaya—while in Jammu and Kashmir, only 12 hectares of land were acquired. Over a five-year period, Rajasthan tops the list, with mors than 5,000 hectares acquired by the NHAI.

With ministry of road transport and highways now planning roadside amenities such as washrooms, drinking water outlets and multi-utility shops—ideally along with adequate parking facilities—every 25-50 km along national highways, land demand by the road sector is set to increase even more. For this, the government will need around 1,400-1,500 hectares, according to the road ministry data.

Complementing the planned roadside amenities with an increased national highway target—it has been raised to more than 40km/day in 2016-17 by roads minister Nitin Gadkari— land prices are likely to increase further, said an NHAI official who didn’t want to be identified.

“With the rough estimates that we have prepared, the money requirement for land acquisition in 2016-17 is going to increase manifold, and average rates may also go above Rs.2 crore per hectare. We are exploring several financial opportunities now like investments or loans from LIC (Life Insurance Corp. of India), EPFO (the Employees’ Provident Fund Organisation) and green masala bonds in London Stock Exchange, and we are hopeful that we would be able to meet the financial targets set by the roads minister,” said the official.

in a recent report on infrastructure, policy think-tank Niti Aayog said the government will need around Rs.1.4 trillion to achieve the national highway construction target of 15,000 km in 2016-17. Out of this, Rs.70,000 crore should be raised through Gross Budgetary Support (GBS) and Internal Extra Budgetary Resource (IEBR).

The roads ministry would collect around Rs.8,000 crore through tolls and Rs.27,000 crore from private investment, while it has to raise around Rs.33,000 crore.

READ MORE