Norms for road projects will be diluted
Nitin Gadkari, Union Minister for Road Transport, Highways and Shipping said that “I have decided to dilute technical and financial bid norms for road projects to increase competition.”
He said the norms now allow for about 100-125 contractors to participate in the bids but “I hope to increase the number to 500,” he said responding to a question from H Jayaram, Managing Director, GMMCO, which represents construction equipment manufacturer Caterpillar in India.
The Road Transport Minister plans to expand the national highway network to about 2 lakh kilometer (km) from the present 1.5 lakh km and enhance road safety. At the time he took over, of the 52 lakh km of roads 96,000 km were national highways.
He said that “The approach of the earlier government was conservative because of the five lakh accidents and 1.5 lakh deaths every year.”
He said that “I decided to increase the national highways to 2 lakh km and today it is 1.5 lakh km and take steps to bring down accidents by half at least.”
The 96,000 km of highways, which is just 2% of road length, carried 40% of national traffic. With 2 lakh km, it will go up to 80%, he says confidently.
To illustrate the change the Centre has brought into the road sector, the Union Minister recalls the time AM Naik, Chairman, Larsen & Toubro, the largest infrastructure company in India, had thrown up his hands and said L&T has decided to exit road projects “and at that time I could not convince him to change his mind then,” Gadkari said.
But “now his company is doing nine projects at an estimated INR 15,000 crore and some of them at 20% below cost. This is the difference after the new government took over,” he asserts.
Over 90% of the issues relating to 403 stalled projects valued at about INR 3.5 lakh crore have been addressed.
Just about a couple of dozen projects are still pending, he said responding to a question from TV Karthikeyan, Chief Financial Officer, L&T Infrastructure Development Projects.
The Minister said the Centre will push ahead with the hybrid annuity model for funding road projects.
By March next year, it will complete contracts for INR 2 lakh crore and in the next year target INR 5 lakh crore.
This model is a big boost Indian investors and contractors, he said. On enhancing road safety, Gadkari said the new Motor Vehicle Act will soon be finalised with the Yunus Khan Committee set to hold its final meeting.
This will benefit insurance companies, he said in response to a query from MS Sreedhar, Managing Director, Royal Sundaram General Insurance.
He said that “We are identifying black spots and have provided INR 11,000 crore to improve 726 black spots, private sector companies including those in insurance can support this initiative.”
The Ministry has taken a ‘historical decision’ and moved a Cabinet note to provide for 1% of cost of construction for road safety.
This is equal to INR 5,000 crore as of now. Funds are also being allocated to State governments to improve road safety, he said.
He said that “I am confident we will reduce accidents by 50% in next two years.”
Reacting to a suggestion from Preetha Reddy, Vice-Chairperson, Apollo Hospitals, he said there is a plan to establish 1,200 road side amenities, including immediate-care facility and ambulances for accident victims.
These ambulances will be equipped with rescue equipment to extricate victims from damaged vehicles.
The Ministry is also planning to establish with private sector participation over 50 yards for concrete precast across the country to supply pre-cast components to infrastructure projects. The private sector has a huge opportunity to participate in these, he said.