Page last updated at 22:55 GMT, Wednesday, 21 April 2010 23:55 UK

Will India's highways project be path to growth?

By Brajesh Upadhyay
BBC News, Delhi

As India aspires to a double digit annual economic growth, infrastructure development is the new priority.

Truck driver near Bangalore
Poor infrastructure is holding back India's economic development

Prime minister Manmohan Singh has underscored the need to double infrastructure spending from $500bn (£325bn) to $1 trillion in the next five-year plan if the country plans to lift millions out of poverty.

Roads and highways are a particular focus of attention and the government's high-profile highways minister Kamal Nath has set himself a tough target of 20km of roads a day from June, meaning 7,000km a year and 20,000km of work in progress.

It could easily be the biggest and the most ambitious infrastructure roll-outs in the world today.

The need for funds, land and expertise will be enormous - the history of investor-unfriendly rules will not make the task easier either.

Mr Nath has sold the dream, can he pull it off?

"It was a well thought out target. If we want the project to have an impact, it cannot be less than 20km a day,'' Kamal Nath told the BBC in an exclusive interview.

He said the target is "ambitious but can be achieved".

Costly potholes

Economists hold India's creaking infrastructure as the main impediment to its growth and a big hurdle in closing the gap with its neighbour China.

HIGHWAY HINDUSTAN
State highway near Kolkata
As India embarks on the astounding task of building 20km of new roads every day from June, BBC Hindi has been on a journey across India to find out how this ambitious construction project may change the nation.

Highway Hindustan covered 2,500km, travelling along India's Golden Quadrilateral highway network which connects Delhi, Mumbai, Calcutta and Madras.

On Friday read about how a major new road has changed the lives of people in and around the holy city of Varanasi.

And roads in particular have a critical role to play in the growth story.

Roads carrying two-thirds of cargo are plagued by irregular surfaces and potholes.

National highways account for just 2.2% of roadways but carry more than 40% of traffic in India. What's more, a fifth of these major roads are just one lane.

A 2009 study says truckers at their best can do just 100,000km a year in India, compared with 400,000 in the US. This, according to the Indian Institute of Management and the Transport Corporation of India who carried out the research, costs the economy about $5.1bn a year.

Mr Nath has noted that 40% of India's fruits and vegetables rot before reaching the market because of poor roads.

Adding to the bottlenecks is cumbersome paperwork, petty extortions by local officials and other bureaucratic delays.

"Travelling through 28 states of India is like travelling through 28 countries," says Vineet Agrawal of Transport Corporation of India Limited, one of the biggest logistics companies in the country.

He says Indian roads still have a long way to go and the focus has to be not just on the total length but also the quality of roads.

Big push

Improvements have been visible since the Atal Behari Vajpayee government in 1998 launched an ambitious Golden Quadrilateral project to link Delhi, Calcutta, Madras (Chennai) and Mumbai (Bombay) with 6,000km of four-lane highways.

Conceived with the aim to push the country's economic engine into overdrive, much as the US highway network mobilised the American economy, the project in a way showcases 21st Century India.

Kamal Nath
Minister Kamal Nath has been trying to raise foreign money for road building

The four-lane highways have cut travel times and opened up new opportunities for those living close by.

Kamal Nath's plan is to turn these roads into six lanes and also to link all the state capitals to the highway network.

"Once this network is ready, we believe it will ensure higher living standards by making better employment available to the rural masses, giving them the opportunity to be true participants in our economic success," says Mr Nath.

He says by the end of this year a uniform smart-card system will be introduced for payment of tolls and this will have a big impact in clearing bottlenecks.

Over-ambitious?

BC Khanduri, roads minister in the Vajpayee government, says the biggest hurdle to realising Kamal Nath's 20-kilometre-a-day dream is the lack of capacity in the system to handle a project worth $50bn over the next few years.

He says the ability to manage such large projects doesn't exist either in government or the private sector.

"Also, to achieve 20km a day from June, the work should have begun two-and-a-half years ago. I don't see that anywhere,'' says Mr Khanduri.

Kamal Nath is aware of these problems and says the effort is to build on to the existing capacity.

Whether it means writing articles in Wall Street Journal to woo foreign investors, criss-crossing the globe with his team to drum up interest or negotiating with state transport ministers to clear bureaucratic bottlenecks, he says nothing is being left to chance.

He says funds will not be an issue and says that apart from government funds, the additional investment will come through public-private partnerships.

Investors have always complained that Indian politicians over promise and under deliver. Can Kamal Nath prove them wrong?



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