Home / Politics / Policy /  New PSU proposed to ensure faster implementation of road projects

New Delhi: Road transport and highways minister C.P. Joshi has approved a plan to set up a corporation that will administer and construct expressways in the country, a top ministry official said on condition of anonymity.

The proposal, cleared by the minister about a month ago, is likely to go to the cabinet for approval, the official said, declining to be identified.

This proposed body, to be called the National Expressway and Connectivity Corporation (NECC), will function under the ministry of road transport and highways if approved by the cabinet. Unlike the National Highways Authority of India (NHAI), a statutory body created by an act of Parliament and responsible for the development of highways, NECC will function as a public sector undertaking, or PSU.

“The corporation, as per the current proposal, will have a separate set of officers to ensure that decisions and processes are not delayed," said the official mentioned earlier.

Development of expressways by the Union government, as part of the sixth phase of the National Highways Development Programme (NHDP-VI), has remained negligible.

National highways, measuring about 77,000km in length, constitute only about 2% of the total road length of the country. Out of an allocation of 149 crore for development of expressways under NHDP-VI in 2011-12, only about 4.5 crore were spent by NHAI.

The government plans to develop 552km of expressways in this fiscal year, with a broad vision of developing around 20,000km of expressways over the next 10 years.

Development of expressways, according to analysts, costs about 25 crore a kilometre.

“Creation of a PSU is a welcome step. Corporatization, as we have seen in the cases of the state highway authorities of Rajasthan, Chhattisgarh, Gujarat and Jharkhand, allows more flexibility especially for tapping capital markets for funds," said Abhay Agarwal, partner, infrastructure and PPP (public private partnership) practice, at consultancy firm Ernst and Young. “It is also difficult for the NHAI to manage the responsibility to develop both expressways and highways."

Uttar Pradesh, which established the Uttar Pradesh Expressways Industrial Development Authority in 2007 for developing expressways in the state, has been more successful than the Centre in laying expressways.

The authority opened the 165.5-km Yamuna expressway from Greater Noida to Agra on 9 August. It plans to develop seven more expressways in the state, with the alignment for the 270-km Agra-Lucknow expressway having already been finalized.

Parvesh Minocha, managing director at infrastructure consultancy Feedback Infra, however, said creating a separate corporation will not make much difference to the development of expressways in the country.

“The single major roadblock in the development of roads is land acquisition in this country. Technology, capacity and funding are not really big problems facing the sector," he said.

M. Murali, director general of the National Highway Builders Federation, said the existing hurdles need to be dealt with before the creation of any such entity. “Land acquisition, environment and forest clearances, and funding are the primary challenges facing the sector currently," he said.

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