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Time and cost overrun analysis of highway projects

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 4

Dedicated to

my mother & father for selfless upbringing

my wife Prasanthi for her relentless & unstinted support

my beautiful daughters Amulya and Shreya for their love & affection
 5

ACKNOWLEDGEMENTS

I am highly indebted to my research guide Dr Ch Hanumantha Rao, Prof &

Head of Dept of Civil Engineering at KL University for the continuous support for
carrying out the research work. His meticulous & methodical way of functioning in a
most disciplined manner throughout the research period with his constructive
suggestions is grossly responsible for producing this thesis. Discussions with him
proved to be quite probing and had always led to meaningful & thought provoking
sessions. He had always acted as a friend, philosopher & guide playing an instrumental
role in the successful completion of my research work.

Thanks are also due to all the respondents of the questionnaire circulated by me
for patiently going through the voluminous queries and in penning their valuable
opinions & suggestions without which my research work would not have been
completed. My sincere gratitude is also due to all my colleagues especially Shri
Jainendra Kumar, Technical Examiner at Border Roads Inspection Cell of Govt of
India for suitable refinement to my questionnaire and constant encouragement. Further
I thankfully acknowledge the assistance provided by Professors Tridib, Arup Roy,
Mrinmoy and students of Business Administration Mr Abhijeet & Chetri of Tezpur
University for software assistance through SPSS computer package in carrying out the
statistical analysis.

Makam Kishore Kumar

 6

ABSTRACT

The introductory chapter gives an insight into the present scenario on Indian
highways including cross continental comparison with the neighbouring China as well
as developed nations such as USA and Europe. The poor quality of road infrastructure
coupled with heavy congestion on important national highways has led to initiation of
National Highway Development Project (NHDP) was discussed in detail in the sub
section background of study. The wide prevalence of delays in the implementation of
highway projects under NHDP has necessitated the present study on time and cost
overruns. This chapter further discusses on the research methodology adopted,
limitations of the study and future scope for further research.

Chapter 2 covers the literature survey in detail covering the period since 1980.
Important findings of various researchers on project delays were depicted for the
information of the reader. The survey included authors from all over the globe and
reasons for delays in construction projects comprised from planning as well as design
and construction phases. Shortages of resources, inclement weather, frequent changes
to design and scope of work, lack of coordination between client and contractors,
unforeseen site conditions etc were mostly listed as reasons for project delays. On the
contrary, cost overruns were stated to be on account of inflationary price rise, higher
cost of land acquisition and under estimation of the original cost. Few constructive
suggestions from parliamentary and inter ministerial committees also found a mention
in the literature survey.

The analysis on time and cost overruns is extensively covered in the chapter 3.
The status report of Ministry of Statistics and Project Implementation (MOS&PI)
highlights the prevailing scenario on the inordinate delays caused in the
implementation of highway projects. Various vital statistical parameters of these
highway projects were deliberated in detail including the trend of time overruns. Extent
of delays and corresponding reasons were also brought out covering the various
geographical regions of the country. Certain interesting inferences were also drawn
with respect to the highway projects carried out under various phases of NHDP.
Regression analysis was carried out on the ongoing highway projects using SPSS
computer program and mathematical equations were derived between various project
parameters to portray the behavior of time and cost overruns. Delay Index model
incorporating the various causes of delay was evolved for estimation of time overruns
and for predicting the future outcomes.
 7

Chapter 4 further takes the analytical part of the research one step further in
ascertaining the various causes of delays and subsequent diagnosis of the time and cost
overruns. The prominent reasons for delay such as land acquisition was discussed in
detail going into the historical and legislative perspectives. Questionnaire survey
findings on the land acquisition front were also debated with focus on micro level
organizational problems and the recent government initiatives in the form of land
legislation bill introduced in the parliament. A sizeable portion of thesis was devoted to
lacunae in the preparation of Detailed Project Reports (DPRs) and their impact on the
highway projects along with the corrective measures. The next most important problem
was contractual matters and dispute resolution mechanism suggesting procedural
reforms for effective contract administration. Further financing mechanisms of NHDP
were discussed at length ever since the inception of NHDP. Certain innovative
suggestions such as beneficiary participation and auctioning of highway projects were
aired for the sound implementation of NHDP. Strategies for future implementation
such as project packaging, appropriate mix of BOT, ways and means to address the
capacity constraints were highlights of this chapter.

Hurdles faced in the implementation of NHDP were also highlighted in chapter

4 along with solutions in the form of computer assisted project management
techniques, fast track construction concepts and induction of innovative construction
techniques. Problems faced in the implementation of massive highway programs in
United States and China were incorporated in this chapter drawing parallels with
NHDP thus not only throws light on their experiences but also helps in learning few
lessons. Increased involvement of private sector in the form of public private
participation was felt as the need of the hour and the same was discussed.

Concluding chapter 5 at the end tried to summarise the findings of the analysis
of time and cost overruns. This chapter has brought out the importance of physical
connectivity through highway infrastructure in the country through the massive
development programme in the form of NHDP and at the same time envisaging the
role of the governments in removing the constraints. The various impediments on the
path of project implementation were listed according to their criticality. Tabulation of
various factors causing delays and suggested measures to overcome the delays is the
highlight of this chapter giving the readers the crux of the research carried out by the
research scholar. The state of preparedness in India is covered under overall general
economic scenario. The chapter ends with a note of optimism shared by the
engineering fraternity stating that the committed target of achieving the road
construction at the rate of 20 km per day is attainable if timely corrective actions are
taken.
 8

CONTENTS
Glossary 13
Abbreviations 16
List of Tables 20
List of Figures 22

1. Introduction

1.1 Present Scenario of Indian Highways 23

1.2 Background of Study 25
1.3 Scope and Objectives of Research 28
1.4 Research Methodology 29
1.5 Necessity of Study 30

2. Literature Review

2.1 Introduction 32
2.2 International Scenario 33
2.3 Time Vs Cost Overruns 34
2.4 Indian Context 35
2.5 Previous Studies 39
2.6 Proposed Study 40

3. Analysis of Time and Cost Overruns

3.1 Introduction 42
3.2 Status Report on Project Implementation 43
3.3 Regression Analysis of Time and Cost Overruns 52
3.3.1 Assumptions in Regression Analysis 57
3.3.2 Regression Analysis Computations 57
3.3.3 Test for Significance 61
3.3.4 Regression Analysis Results 63
3.4 Delay Index Model for Estimation of Time Overruns 66

4. Causes of Delays and Suggested Measures

4.1 Introduction 73
4.2 Pre-Construction Activities 78
4.2.1 Land Acquisition 78
4.2.1.1 Legislations on Land Acquisition 79
4.2.1.2 Land Acquisition on NHDP 81
 9

4.2.1.3 Micro Level Organizational Problems 85

4.2.1.4 Government’s Initiatives on Land Acquisition 87
4.2.2 Shifting of Utilities 88
4.2.2.1 Contractual Provisions 90
4.2.2.2 Problems due to Unmapped Utilities 91
4.2.2.3 Service Ducts 92
4.2.3 Detailed Project Reports (DPRs) 93
4.2.4 Financing Mechanism of NHDP 97
4.2.4.1 Excessive Dependence on BOT 99
4.2.4.2 Galloping Fund Requirement 103
4.2.4.3 Packaging of Concession Agreements 106
4.3 Construction Phase 108
4.3.1 Contractual Problems 109
4.3.2 Capacity Constraints 115
4.3.2.1 Strategies for Manpower Deficiencies 116
4.3.2.2 Solutions to Tackle Scarcity of Materials 118
4.3.2.3 Questionnaire Survey on Capacity Constraints 120
4.3.3 Rains/Floods 121
4.3.3.1 Solutions for Overcoming Natural Calamities 122
4.3.4 Design Changes/Critical Structures Delays 124
4.3.4.1 Appropriate Design and Construction Methodology 124
4.3.4.2 Fast Track Construction 126
4.3.5 Deterioration of Law and Order 128
4.4 Post Mortem Analysis 129
4.4.1 Policy Decisions 130
4.4.1.1 Shifted Priorities to Rural Development 131
4.4.1.2 Huge Increase in Scope of Works 131
4.4.1.3 Slow pace on Increased Involvement of Private Sector 132
4.4.1.4 Laxity on implementing National Road Transport Policy 134
4.4.2 Cross Continental Experiences 135

5. Conclusions and Recommendations

5.1 Introduction 141

5.2 Findings of the Study 143
5.3 Recommendations for Effective Implementation 146
5.4 Limitations of Study 151
5.5 Scope for Further Research 152

BIBLIOGRAPHY 153
 10

APPENDICES

Appendix 1 Phase Wise Schedule of NHDP 164

Appendix 2 Questionnaire 166

Appendix 3 Data on NHDP Projects 181

Appendix 3A Assessment of Time Overruns on Ongoing Projects 208

Appendix 4 Land Acquisition : A Historical Perspective 216

Appendix 5 List of Projects Delayed Due to Land Acquisition 222

Appendix 6 Environmental & Forest Clearences 227

Appendix 7 LA, Resettlement & Rehabilitation Bill 230

Appendix 8 NHDP – Sources of Financing 232

Appendix 9 BOT Mode for Developing Highway Infrastructure 240

Appendix 10 Model Concession Agreement 245

Appendix 11 Nano Polymer Base stabilisation 257

Appendix 12 Cost Comparision of Nano Polymer Stabilisation 263

Appendix 13 Interstate Highway System of USA 265

Appendix 14 Industry Reforms by China for Highways 273

Appendix 15 Highways of Development 287

 11

LIST OF PUBLICATIONS

i. Kishore Kumar M., and Ch Hanumantha Rao. “Estimation of Time Overruns on

National Highway Development Project using Regression Analysis” Indian
Highways, Indian Road Congress (IRC) Journal, ISSN No : 0376-7256, Sep 2014,
pp 31-45.

ii. Kishore Kumar M., Ch. Hanumantha Rao., and Boeing Singh Laishram (2012).
“Time and Cost Overrun Analysis of National Highway Development Project.”
Journal of Indian Roads Congress, ISSN No : 0376-7256, Vol 73-3, Paper No 582,
Oct-Dec 2012, pp 299-321.

iii. Kishore Kumar M., and Ch. Hanumantha Rao (2012). “E-Auctioning for
Awarding Highway Projects: An Optimal Methodology for Reaping Maximum
Revenues.” NICMAR Journal of Construction Management, ISSN No : 0970-
3675, Vol. XXVII, No.I, pp.27-35.

iv. Kishore Kumar M., and Ch. Hanumantha Rao (2011). “Capacity Constraints on
progressing of National Highway projects in India”, Prabandhan - Indian Journal
of Management, Vol. 4 (8), August, 2011, ISSN No : 0975-2854, pp. 30-43.

v. Kishore Kumar M., and Ch. Hanumantha Rao (2011). “Sound Financial
Management & Reliable Sources of Funding – Key Attributes for timely
completion of National Highway Development Project (NHDP).” International
Transportation Economic Development Conference I-TED 2011, May 01-03,
Charleston, West Virginia (USA).

vi. Kishore Kumar M., and Ch. Hanumantha Rao (2010). “A Decade of Highway
Infrastructure Development under NHDP – An Insight on Varied
Experiences”, International Journal of Earth Sciences and Engineering, ISSN No :
0974-5904, Vol. 3, No.6, Dec 2010, pp. 904-915.
 12

vii. Kishore Kumar M., Ch Hanumantha Rao, and K. R. Ramana (2010). “Planning
and Monitoring of Road Construction Projects in Jammu and Kashmir”
NICMAR Journal of Construction Management, ISSN No : 0970-3675, Vol. XXV,
No.III, pp.64-83.
 13

GLOSSARY
Accounting Year (AY) or Financial Year (FY) means the accounting year
commencing on 1st April of any calendar year and ending on 31st March of the
subsequent year.
Arbitration Act means Aribtration & Conciliation Act 1996 and shall include any
amendment to or any re-enactment thereof as in force from time to time.
Bill of Quantities means the priced and completed Bill of Quantities forming part of
the Bid.
Build Operate Transfer (BOT) means the concessionaire meets the upfront cost of
construction and expenditure on annual maintenance and recovers the entire cost along
with the interest from collection the user fee (toll) collections during the concession
period. The highway authority viz., NHAI gives the project requirements based on DPR
and capital grant up to a maximum of 40% under the risk sharing concept as envisaged
in the Model Concession Agreement (MCA). In the case of annuity model, the
concessionaire meets the entire upfront cost (no grant is paid by the client) and the
expenditure on annual maintenance recovering the entire investment through pre-
determined annuity payments by NHAI.
Cess is nothing other than a tax or levy. It is to be levied as per the prescribed
percentage on items specified by law. Cess is often used as rider to a tax for collecting
additional revenue for a specific purpose. The then Hon’ble Finance Minister of India
during his budget speech for the year 2003-04, has announced additional levy of cess
of 50 paise (US 1 cent) per litre each on petrol and high-speed diesel. The revenue
generated from the cess would be used to finance all categories of roads.
Commercial Operations Date (COD) starts from the date on which Independent
Engineer (IE) issues the provisional or completion certificate in accordance with the
provisions of MCA.
Completion Date is the date of completion of the works as certified by the Project
Management Consultant (PMC) or his nominee in accordance with the relevant
contract conditions.
Concessionaire is a person or firm that operates a business within the premises
belonging to another (the grantor) under a concession, usually as the only seller of
certain goods or services.
Contract is the agreement entered between the employer and the contractor to execute,
complete and maintain the works.
Contract Price is the price stated in the letter of acceptance and thereafter as adjusted
in accordance with the provisions of the contract.
Contractor is a person or corporate body whose bid to carry out the works has been
accepted by the employer.
 14

Contractor’s Bid is the completed bidding documents submitted by the contractor to

the employer.
Days are calendar days, months are calendar months.
Defect is any part of the Works not completed in accordance with the Contract.
Defects Liability Period is the period named in the contract data and calculated from
the completion date.
Detailed Project Report (DPR) is a comprehensive report provided by NHAI to the
bidders as part of the bidding documents comprising the following :

Vol I - Main Report Part A and B

Vol II - Design Report (Bridges and Cross Drainage) and Sub Soil Investigation (SSI)
Vol III - Design Report (Material) including Appendices
Vol IV - Environmental Assessment Report
Vol V - Technical Specification
Contract - Part A – Road Works
and Drawings - Part B – Bridges & Cross Drainage
Employer is the party who will employ the Contractor to carry out the Works.
Equipment is the contractor’s machinery and vehicles brought temporarily to the site
to construct the Works.
Joint Venture means two or more companies or contractors may jointly undertake
contract or works. Each entity would be jointly responsible for completing the task as
per the contract.
Material are all supplies, including consumables, used by the contractor for
incorporation in the works.
Order of Precedence (if not specified in the contract agreement) means the documents
forming the contract shall be interpreted in the following order of priority :

(1) Agreement

(2) Letter of Acceptance and notice to proceed with works

(3) Contractor’s Bid

(4) Contract Data

(5) Conditions of Contract including Special Conditions of Contract

(6) Specifications
 15

(7) Drawings

(8) Bill of quantities and

(9) Any other documents listed in the Contract Data as forming part of the contract.

Plant is any integral part of the works which is to have mechanical, electrical,
electronic or chemical or biological function.
Site Investigation Reports are those which were included in the bidding documents
and are factual interpretative reports about the surface and sub-surface conditions at the
site.
Site is the area defined as such in the contract data.
Specification means the specification of the works included in the contract and any
modification or addition made or approved by the employer or his nominee.
Subcontractor is a person or corporate body who has a contract with the contractor to
carry out a part of the work in the contract which includes work on the site.
Temporary Works are works designed, constructed, installed and removed by the
contractor which are needed for construction or installation of the works.
Variation is an instruction given by the PMC or his nominee which varies the works.
Works are what the contract requires the contractor to construct, install and turn over
to the employer as defined in the contract document.
 16

ABBREVIATIONS
` - Indian Rupees

ACB - Anti Corruption Bureau

ADB - Asian Development Bank

AHQ - Army Head Quarters

AP - Affected Populace

AT - Arbitral Tribunal

BOT - Build, Operate & Transfer

BRO - Border Roads Organisation

BRTF - Border Roads Task Force

CCEA - Cabinet Committee on Economic Affairs

CoI - Committee on Infrastructure

CPM – Critical Path Method

CRF - Central Road Fund

CVC - Central Vigilance Commission

DGBR - Director General Border Roads

DORT&H - Department of Road Transport & Highways

DPR - Detailed Project Report

DRB - Dispute Resolution Board

Dy CAG - Deputy Comptroller & Auditor General

EGoM - Empowered Group of Ministers

EPC - Engineering, Procurement & Construction

ET - Economic Times

EV - Expected Value

FDI - Foreign Direct Investment

FIPB - Foreign Investment Promotion Board

 17

GAIL - Gas Authority of India Ltd

GoI - Government of India

GQ - Golden Quadrilateral

GREF - General Reserve Engineer Force

HPCL - Hindustan Petroleum Corporation Ltd

IEG - Independent Expert Group

IFA - Internal Financial Advisor

IMG - Inter Ministerial Group

INC - Indian National Congress

IOC - Indian Oil Corporation,

IRCC - Indian Road Construction Company

IRCON - Indian Rail Construction Company

IRR - Internal Rate of Return

JBIC - Japan Bank for International Cooperation

JCO - Junior Commissioned Officer

JV - Joint Venture

LA - Land Acquisition

MCA - Model Concession Agreement

MDR - Major District Road

MES – Military Engineer Services

MOEF – Ministry of Environment & Forests

MORT&H - Ministry of Road Transport & Highways

MOS&PI - Ministry of Statistics & Project Implementation

MOU - Memorandum of Understanding

MPRDC - Madhya Pradesh Road Development Corporation

MSRDC - Maharashtra State Road Development Corporation

 18

NAC – National Academy of Construction

NBCC - National Building Construction Company

NDA - National Democratic Alliance

NGO - Non Governmental Organizations

NH - National Highway

NHAI - National Highways Authority of India

NHDP - National Highway Development Programme

NICMAR – National Institute of Construction Management & Research

NPCC - National Projects Construction Corporation

NREGA - National Rural Employment Guarantee Act

NSEW - North South East West Corridor

NTHDP - National Trunk Highway Development Project

OC - Officer Commanding of the rank of Executive Engineer

O&M – Operation & Maintenance

ONGC - Oil & Natural Gas Commission

PCB - Pollution Control Board

PIUs - Project Implementation Units

PM - Prime Minister

PMGSY- Prime Minister Gram Sadak Yojana

PMO - Prime Minister’s Office

POSDCORB - Planning, Organising, Staffing, Coordinating, Reporting & Budgeting

PPP - Public Private Partnership

PPPAC - Public Private Partnership Approval Committee

PSUs - Public Sector Undertakings

PWD - Public Works Department

Q/E - Quarter Ending

 19

R&R - Resettlement & Rehabilitation

RCC - Road Construction Company (analogous to Division in PWDs)

RFP – Request for Proposal

RFQ – Request for Qualification

RITES - Rail India Technical & Economic Consultancy Services

ROB - Rail Over Bridge

RUB - Rail Under Bridge

SAIL - Steel Authority of India Ltd

SARDP - Special Accelerated Road Development Programme

SEZ - Special Economic Zone

SH - State Highway

SOE - State Owned Enterprise

SPV - Special Purpose Vehicles

SWOT – Strengths, Weaknesses, Opportunities & Threats.

TS - Technical Sanction

UPA - United Progressive Alliance

UPBCC - Uttar Pradesh Bridge Construction Corporation

USA - United States of America

USD – United States Dollars

UV - Utility Value

VGF - Viability Gap Funding

YEA - Yamuna Expressway Authority

 20

LIST OF TABLES
SNo Table No Name of Table Page No
1 1.1 Transportation Sector in India vis-à-vis Developed 24
Countries
2 1.2 Phase wise details of NHDP Projects in India 25
3 1.3 Progress of NHDP works as on 29th Feb 2012 28
4 2.1 Status of Highway Projects as on 31st Mar 2008 35
5 3.1 Status of Highway Projects 43
6 3.2 Descriptive Statistics of Highway Projects on 44
MOS&PI’s monitor
7 3.3 Frequency Distribution of Projects with Time 46
Overruns
8 3.4 Status of Approved Projects (March 2010) 49
9 3.5 NHDP Phase wise Delays 50
10 3.6 State wise Statistics on Delays in Highway Projects 51
(March 2008)
11 3.7 Cost Overruns in Highway Projects (March 2010) 52
12 3.8 Correlation Matrix between Project Parameters 55
13 3.9 Relationships between Project Parameters 56
14 3.10 Regression Analysis Computations 58
15 3.11 Cross validation of Regression Analysis 60
16 3.12 Regression Coefficients of Time Overrun on Project 61
Cost
17 3.13 Regression Analysis of Time Overruns in various 62
States
18 3.14 Time Overruns vs Project Cost 63
19 3.15 Regression Equations 64
20 3.16 Correlation Matrix of Cost Overruns 65
21 3.17 Regression Analysis of Cost Overruns in States 66
22 3.18 Weightages for Delay Index Model 67
24 3.19 Established Relation between Delay Index and Time 69
Overruns
 21

SNo Table No Name of Table Page No

25 4.1 Causes of Delays enunciated by PIUs 75

26 4.2 Questionnaire Survey Results on Delay Factors 76
27 4.3 Delays on account of Land Acquisition 82
28 4.4 Questionnnaire Survey on Preparation of DPRs 94
29 4.5 Suggestions for improvement of DPRs 95
30 4.6 Source of Funding for NHDP works 98
31 4.7 BOT Component in initial Phases of NHDP (Jan 100
2011)
32 4.8 Progress on Works Plan evolved by BK Chaturvedi 101
Committee on restructuring of NHDP
33 4.9 Toll and Annuity projects from Phase III onwards 102
during 2007 to 2011
34 4.10 Fund Requirement by BK Chaturvedi Committee on 104
restructuring of NHDP
35 4.11 Fund Mobilisation Schemes 105
36 4.12 Modifications to Model Concession Agreements 107
37 4.13 Hurdles in the implementation of Highway Projects 108
38 4.14 Awarding of Contracts for the past 5 years 109
39 4.15 Problems faced by Construction Firms 109
40 4.16 BK Chaturvedi Committee Suggestions for Dispute 113
Resolution
41 4.17 Perception of Capacity Constraints by various 120
Stakeholders
42 4.18 NHDP works affected by 2008 Rains/Floods 122
43 5.1 Recommended Measures for Project Implementation 148
 22

LIST OF FIGURES
SNo Fig No Name of Figure Page No
1 1.1 NHDP showing GQ and NSEW Corridor 26
2 3.1 Frequency Distribution of Project Length 45
3 3.2 Frequency Distribution of Project Cost 45
4 3.3A Distribution of Time Overruns in 2008 47
5 3.3B Distribution of Time Overruns in 2010 47
6 3.4 Pattern of Time Overruns 49
7 3.5 Scatter Plot showing best line fit 59
8 4.1 Underground Walkable Service Duct/Corridor 92
9 4.2 PPP Projects in Infrastructure 106
10 4.3 Schematic Diagram of Fast Track Construction Concept 127
 23

CHAPTER 1

INTRODUCTION

The introductory chapter gives an insight into the present scenario on

Indian highways including cross continental comparison with the
neighbouring China as well as developed nations such as USA and
Europe. The poor quality of road infrastructure coupled with heavy
congestion on important national highways which has led to initiation of
National Highway Development Project (NHDP) was discussed in detail
in the sub section background of study. The wide prevalence of delays in
the implementation of highway projects under NHDP has necessitated
the present study on time and cost overruns. This chapter also discusses
on the research methodology adopted by the author.
Contents
1.1 Present Scenario of Indian Highways 23
1.2 Background of Study 25
1.3 Scope and Objectives of Research 28
1.4 Research Methodology 29
1.5 Necessity of Study 30

1.1 Present Scenario of Indian Highways

India has the distinction of having the second largest road network in the world
catering for 65 % freight and 85 % passenger traffic. Prior to commencement of NHDP,
the road statistics in India showed that out of the total road length of 3.34 million km,
only 50 % is paved surface [MOSRT&H 1998]. Further India boasts of highest road
density of 68.4 km/sq.km of geographical area of the country followed by USA at 66.5
km/sq.km. The population of India is almost four times that of the United States of
America (USA) and has one of the highest growth rates in the world. The existing
transportation system is not adequate to sustain the current rates of economic and
industrial development in the country. Demand has constantly outstripped the supply of
transportation over the last fifty years. Compared to the USA, the amount of freight
traffic carried by highways in India is quite meager. This is partially due to poor surface
quality of the roads. Poor transportation infrastructure in India vis-à-vis developed
 24

nations as narrated at Table 1.1 vindicates the genuine requirement of comprehensive

reforms required in this arena.

Table 1.1 Transportation sector in India vis-à-vis Developed countries

(Source : Prabandhan - Indian Jl of Mgmt, Vol. 4(8), Aug 2011, Page 30)
India USA and European Union (EU)
Trucks operate for just 20 days in a Trucks operate at a whopping 25
month @ an average speed of 250 to days/month covering at almost 700 to 800
300 km/day. km/day.
Delays at check posts, traffic police In TIR Carnet System used in EU,
booths, toll/octroi gates etc. It is Consignments sealed at origin requires no
estimated that unofficial payments checking at interstate check posts to
amounts to about 15% of total trip facilitate smooth flow of high value
expenses. perishable and time sensitive items.
Overworking of drivers leading to Better equipped roads and transportation
accidents and India tops in the accident system helps in speedy deliveries with lesser
deaths. rates of accidents.

The main roads in the Indian subcontinent have not kept pace with traffic
volumes as well as in terms of quality also. Out of the total 3.34 million km road
length, National Highways is just 2 % of total road network, but carries 40 % of total
traffic. Further, amongst the sixty thousand odd km National Highways and 130,000
km State Highways, only 2 percent of their length is four-lane, 34% two-lane, and 64%
single lane. As far as National Highways are concerned, only 5% of their length is four-
lane, 80% two-lane and the balance 15% continues to be single lane [MORT&H 2007].
Thus the road sector, in spite of its high priority is adversely affected by the poor
quality and service levels. The poor quality of Indian roads is highlighted by
congestion, old fatigued bridges and culverts, railway crossings, low safety, no by-
passes, slow traffic movement and also contributing to high rate of road accidents. The
deficiencies in the road network are causing huge economic losses. The rapid growth of
traffic from 1.9 to 8.8 million in a span of two decades @ 8.9% per annum without
matching augmentation of capacity has only added to the deterioration of the network.
 25

Although the Indian transportation infrastructure is one of the largest in the world, it is
far from being the best.

1.2 Back Ground of Study

Provision of quality and efficient infrastructure services is essential to realize

the full potential of the growth impulses surging through the economy. Based on road
user cost, it is estimated that upgradation of congested two-lane highways would lead
to savings of over 20 percent in the road user costs. Further the superior road surfaces
would bring in increased efficiencies to industrial establishments through faster
transportation of its raw materials as well as finished goods and in turn reducing the
cost of burdening inventories. The Indian automobile industry today manufactures a
large variety of multi-axle vehicles with turbo charged engines, but most of these are
currently exported. The Indian industry needs large freighters to transport goods. The
automobile industry has necessary facilities to manufacture them in sufficient
quantities. The inadequate road infrastructure hence acts as an economic bottleneck
impeding growth of both these industries [MOSRT&H 1998]. The major reforms in
roadways were : imposition of a fuel cess to finance highway construction; the
commissioning of the National Highway Development Project and Prime Minister's
Gram Sadak Yojana (PMGSY) or the Rural Roads Programme [Rakesh Mohan 2006].
Accounting for the vast importance of national highways and to improve the road
network overcoming the huge deficiencies noticed in terms of capacity and quality,
National Highway Development Project (NHDP) as shown in Table 1.2 was
commenced.

Table 1.2 Phase wise details of highway projects under NHDP

Phase Project Length Cost Completion Mode of
(km) ( ` billion) Schedule Funding
I Golden Quadrilateral 5846 300 Dec 2005 Cess on petrol
II Port connectivity 1157 350 Dec 2009 products and
II N-S and E-W corridor 7300 loan/Borrowings
III 4-laning of existing 10000 550 Dec 2012 BOT basis
NH not covered under
Ph I and II
 26

NHDP initially envisaged four laning of the existing high density highway
corridors linking four mega metropolitan cities of Delhi, Mumbai, Chennai and
Kolkata, popularly known as Golden Quadrilateral (GQ), and providing North South
East West (NSEW) corridor linking Srinagar in the North and Kanyakumari in the
down South, and Porbandar (Gujarat) in the West to Silchar (Assam) in the East along
with other projects including those providing connectivity to major ports in the country
with overall length of 14,146 km at an estimated cost of ` 580 billion (at 1999 price
level). NHDP is one of the largest highway projects in the world as shown in Fig 1.1.

Fig 1.1 NHDP showing GQ and NSEW Corridor

(Source : http:// www.nhai.org/gqmain_english.htm)
 27

Later on, the scope of NHDP was extended to seven phases covering a total
length of 45,000 km at an estimated cost of ` 2200 billion (2006 prices). The phase
wise schedule of NHDP is given at Appendix 1. Special Accelerated Road
Development Programme in the North-eastern region (SARDP-NE) aims at improving
the road connectivity to state capitals, district headquarters and remote places of NE
region. It envisages two-four laning of about 5,174 km of National Highways and two
laning/improvement of about 4,589 km of state roads. This would provide connectivity
to 85 district headquarters to National Highways/State Roads [DOEA 2009]. A major
portion of the expenditure was met from the cess on petrol and diesel which is
estimated to be around ` 20 billion per annum. External Assistances from World Bank,
Asian Development Bank (ADB) etc also contributed significantly in the form of long
term concessional development loans. The cess and external assistances combinedly
accounted for 75 % of total fund requirements of Golden Quadrilateral. The balance
was made up through market borrowings in the form of NHAI Infrastructure Bonds etc
and partly through private sector participation viz., various forms of Build Operate
Transfer (BOT) mode through Special Purpose Vehicles (SPV), Annuity and Shadow
Tolls. Incentives for private sector in the form of tax holidays for 10 years u/s 80(1)A
of Income Tax Act 1951, concession periods for toll collection up to 22 years or so are
pronounced for their active participation. Even Foreign Direct Investment (FDI) up to
100 % on automatic route obviating the earlier requirement of prior approval from
Foreign Investment Promotion Board (FIPB) has been allowed with 5 year tax holiday
and 30 % deduction on profits for purpose of tax during the next five years. In order to
boost highways sector, Government of India (GOI) carried out all preparatory work
including land acquisition and utility removal so that Right of way (ROW) could be
made available to the concessionaires free from all encumbrances. National Highway
Authority of India (NHAI) has announced to provide capital grant up to 40% of project
cost to enhance project viability on a case to case basis. Concession period was allowed
up to 30 years and Arbitration and Conciliation Act 1996 based on UNICITRAL
provisions was catered for all disputes. Duty free import of specified modern high
capacity equipment for highway construction was also allowed. Despite these
concessions and major initiatives by the Government of India, National Highway
Development Project has not progressed as per the stipulated deadlines as shown at
 28

Table 1.3, thus this prestigious highway project was crippled with serious time and cost
overruns.

Table 1.3 Progress of NHDP works

(Source : www.nhai.org/MIS_May_2013/Status_of_NHDP.pdf)
PROGRESS AS ON 31st MAY 2013

Port Connectivity

Total by NHAI
SARDP -NE

Others
Phase VII

Phase IV
Phase III

Phase VI
Ph. I & II

Phase V
NSEW

NHDP
Total
GQ

Nov 05
Mar 05
Dec 03

Dec 07

Dec 06

Dec 07
Jun 98

Date of
Approval

Original
Dec 03

Dec 09

Dec 09

Dec 12

Dec 14

Dec 12

Plan for Dec 14

Completion

Total
12109

14799

48096

50254
5846

7142

6500

1000

1390
700

388

380
Length
(Km.)
1540 (24%)
6146 (86%)

5491 (45%)

1126 (81%)
374 (98%)
69 (18%)
(100%)

Already 4-
20872

22416
(43%)

(42%)
5846

247
21

Laned
-

(Km.)

Under
12415

12500
6314

2763

2549
751

244
20

43

Implementa
6
-

tion (Km.)

Contracts
Under
212

253
66

54

13

18
2

4
-

Implementa
tion (No.)

Balance
12250

15660

15956
2363

2919

1000

length for
420

659

276

20
0
-

award
(Km.)

1.3 Scope and Objectives of Research

As per the statistics of Infrastructure and Project Monitoring Division (IPMD)
of Ministry of Statistics and Program Implementation (MOS&PI), no mega projects
 29

costing ` 10 billion and above were under implementation in the highway sector.
Whereas 202 Nos Major projects (each costing between ` 1.0 billion and ` 10 billion)
costing about ` 615.52 billion and 22 Nos Medium projects (each costing between `
200 million and ` 1.0 billion) costing approx ` 15.20 billion were under various stages
of execution. A major chunk of about 75 percent highway projects under National
Highway Development Project (NHDP) monitored by the Ministry of Road Transport
and Highways were reported to be running behind schedule and many of these projects
have been delayed due to lack of infrastructure facilities, delay in finalisation of
detailed engineering plans, release of drawings and delay in availability of funds,
changes in scope/delay in finalization of the scope, industrial relations and law and
order problems, delay and uncertainty in feedstock supply, pre-commissioning teething
troubles, technology problems, and geological surprises. Cost overruns were reported in
approximately 10 percent of the projects and these cost overruns were on account of
time overruns, changes in rates of foreign exchange and statutory duties, high cost of
environmental safeguards and rehabilitation measures, higher cost of land acquisition,
change in the scope of the project, higher prices being quoted by the bidders in certain
areas, under-estimation of original cost, and general price rise [MOS&PI 2008]. Thus, a
huge 85% of projects are crippled with time and cost overruns. The scope of the present
study encompasses in analysing the time and cost overruns in highway projects and to
assess the reasons for delays in the implementation of projects. The objectives of
research study on time and cost overruns are as under :
a) Analyse the various ongoing road construction packages under National
Highway Development Project (NHDP) for time and cost overruns.
b) Ascertain the reasons for prevalent time and cost overruns in highway projects
and suggest suitable remedial measures to overcome the overruns.
c) Explore the relationship between various project parameters using mathematical
models and statistical techniques such as Correlation and Regression.

1.4 Research Methodology

Before embarking on any study, an exhaustive literature survey from the

existing technical journals and various government publications and reports was carried
out on delays in the project implementation. In order to unravel these complex issues, a
Questionnaire as shown at Appendix 2 was circulated amongst the various stake
 30

holders such as administrators in regulatory authorities such as NHAI, MORT&H etc,

construction firms engaged in construction works, consultants, engineers and so on.
The queries in the questionnaire were quite diversified ranging from hindrances
brought out by PIUs such as land acquisition, utility shifting and other ground problems
to macro-economic and political issues relating to mode of funding, capacity hiccups
and even governance. The findings of the questionnaire was just the fuel for further
research through intense studies on the subject with an ultimate aim for arriving at
appropriate solutions to the vexed issue of timely completion of the grandiose highway
programme. Out of 150 questionnaires sent covering various aspects associated with
the implementation of highway projects, 66 eminent persons from the comity of
consultants, construction firms and officials representing the monitoring agencies have
responded. The respondents were asked to rate a number of variables using a 6 point
rating scale. Along with the objective assessment of various factors already listed in the
questionnaire, a deliberate attempt was made in keeping the questionnaire quite open in
seeking suggestions from the respondents.

Apart from the questionnaire survey, statistical analysis such as correlation and
regression was carried out on the existing secondary data drawn from MOS&PI’s status
reports using SPSS computer package. Secondary data drawn from MOS&PI’s status
reports of 230 highway projects from 2008 to 2010 was extensively used for statistical
analysis for identifying as well as quantification of the various parameters responsible
for time and cost overruns. The mathematical equations between the Overruns and
project variables were developed through the regression analysis. Delay Index model
was evolved to estimate the time overruns incorporating the real time inputs given by
Project Implementation Units and the results obtained are quite encouraging.

1.5 Necessity of the Study

The main factors contributing to occurrence of time overrun in the NHDP
packages according to Project Implementation Units (PIUs) of NHAI were stated to be
adverse law and order situation in states like Bihar and Jharkhand; difficulties
experienced in land acquisition as in Maharashtra, Karnataka, and Tamil Nadu;
removal of large number of structures including places of worship like temples,
 31

mosques, and, ‘majars’(tombs), ’dargahs’ as in case of Tamil Nadu, Andhra Pradesh

from the alignment of various packages; forest clearances and felling of trees in states
like Jammu and Kashmir, Madhya Pradesh etc; removal of various utilities such as
water mains, electrical lines, sewer lines, telephone lines, wind mills as in Bihar,
Karnataka, Maharashtra, West Bengal and Tamil Nadu; pending court cases as in West
Bengal and Gujarat; slow progress on the part of contractors, non-availability of quarry
stone of the desired grade, award of contracts without land acquisition; changes in the
design, delay in obtaining approval for rail over/under bridges (ROB/RUBs), changes
in alignment subsequent to award of contract due to factors such as local soil and
geology of the region; inadequate deployment of qualified staff by contractors at
project–sites; difficult geology of the region as in case of packages undertaken in the
Deccan region of Maharashtra.

The reasons attributed by PIUs appear to be superficial without taking

cognizance of the root causes. For instance, delays due to failure of contractors largely
owes to certain administrative lapses such as slackness in the functioning of highway
authority officials due to fear of vigilance/audit, policy failure on the part of the
government on capacity building particularly in terms of manpower and spiraling effect
of encumbrance free land not made available to contractors for commencing the works
etc. Thus the ground scenario is not that simple given the complexity of the working
environment in this subcontinent. National Highway Development Project (NHDP)
envisaging massive upgradation of important highways crisscrossing the nation has not
progressed to the desired levels of expectations as seen from the Table 1.3 for
numerous reasons mostly complicated and interlinked in nature. A sincere attempt has
been made through this research for an in-depth analysis of the problem and arriving at
appropriate solutions for overcoming the plaguing issues related to time and cost over-
runs on highway projects.

The research findings of this study will be immensely useful to all the stake
holders in the field of highways, be it engineers, consultants, construction firms,
lending agencies or administrators from the corridors of power viz., NHAI, MORT&H,
and MOS&PI.
 32

CHAPTER 2

LITERATURE REVIEW

Chapter 2 covers the literature survey in detail covering the period since
1980. Important findings of various researchers on project delays were
depicted for the information of the reader. The survey included authors
from all over the globe and reasons for delays in construction projects
comprised from planning as well as design and construction phases.
Shortages of resources, inclement weather, frequent changes to design
and scope of work, lack of coordination between client and contractors,
unforeseen site conditions etc were mostly listed as reasons for project
delays. On the contrary, cost overruns were stated to be on account of
inflationary price rise, higher cost of land acquisition and under
estimation of the original cost. Few constructive suggestions from
parliamentary and inter ministerial committees also found a mention in
the literature survey.

Contents

2.1 Introduction 32
2.2 International Scenario 33
2.3 Time Vs Cost Overruns 34
2.4 Indian Context 35
2.5 Previous Studies 39
2.6 Proposed Study 40

2.1 Introduction

The main purpose of literature review is to give an insight into the existing
literature on the subject of research with an attempt to gauge the breadth and depth of
the research work carried so far. This is an essential pre-requisite for proceeding ahead
in search of the persistent gaps in the topic of research and ultimately to bridge the
vacuum with the new findings and so on.
 33

2.2 International Scenario

Most of the literature reviewed emphasised the micro level project specific
factors mainly responsible for time and cost overruns. As per Rowland (1981), the
likelihood of cost overrun increased with the contract size, complexity, length of
communication channels, and distortion of information associated with larger projects.
In another study, Mansfield et al (1994) affirmed that overruns are attributed to finance
and payment arrangements, poor contract management, materials shortages, inaccurate
estimating, and overall price fluctuations. Recommendations are given on how project
management could be improved in developing countries such as Nigeria by appropriate
action being taken at both the conceptual and detailed planning stages of projects.
Wider action is further called for at both government and international level. Changes
in site conditions were identified as another major factor which must also be linked to
inadequate technical feasibility studies before project authorisation. Aibinu and
Odeyinka (1994) looked into the causes of delays and cost overruns in public highway
and building projects, and found that there was a very good agreement between the
professionals surveyed on those factors that could cause delays and cost overrun. The
four most important items agreed on by the contractor, consultants, and public clients
surveyed were the financing of and payment for completed works, poor contract
management, change in site conditions, and shortages of materials.

Assaf et al (1995) identified 56 causes of delay based on a literature review and

interviews with local contractors, architects/engineers (A/Es), and owners. The most
important delay factors according to contractors were preparation and approval of shop
drawings, delays in contractors' progress, payment by owners, and design changes by
owners. The most important delay factors according to A/Es were cash problems during
construction, the relationships between different subcontractors' schedules in the
execution of the project, and the slowness of the owners' decision-making process. The
most important delay factors according to owners were design errors, excessive
bureaucracy in project-owner organization, labour shortages, and inadequate labour
skills. Ogunlana et al (1996) stated that the majority of delays were traced to
inconsistent detailing of drawings. Contractors suggest that process rather than product
inspection would be more beneficial to construction. Seasonality of employment in
 34

construction is another major problem. Many workers do not take construction work as
all year round work. They usually go back to their villages at harvest and planting
times. The scarcity of technical personnel is due to inelasticity of supply. Local
educational facilities are not sufficient to meet the demand in boom years. Non-
availability of labour during harvest season is applicable in the Indian context too.

On similar lines, Elinwa and Joshua (2000) attributed inclement weather,

shortage in labour and material supply, subcontractors, changes after contract execution
has commenced, poor site management, and government policies for time and cost
overruns. Al-Khalil and Al-Ghafly (1999) observed that public utility projects
especially are susceptible to delay because they are constructed in public roads thus
requiring special precautionary arrangements. Also, these types of projects are heavily
dependent on the use of equipment which frequently requires repair or maintenance.
Additionally, they require numerous permits from various government authorities
necessitating a great deal of planning and coordination to avoid delay. Among the most
important causes found are cash flow problems and financial difficulties by the
contractor, difficulties in obtaining permits, and the requirement to select the lowest
bidder without regard to pre-qualifications.. Jahren and Ashe (1990) found that a cost
overrun rate of 1 to 11% is more likely to occur on larger projects compared to
overruns on smaller projects but mentioned that managers on large projects typically
make special efforts to keep cost-overrun rates low. Jahren and Ashe also determined
that the risk of high cost overrun rates is greater when the winning bid amount is less
than the engineer’s estimate and further identified some cost-overrun factors such as the
contract document quality, nature of interpersonal relations on the project, and
contractor policies.

2.3 Time Vs Cost Overruns

Peter F Kaming et al (1997) concluded from the projects and project managers
surveyed that cost overruns occur more frequently and are thus a more severe problem
than time overruns on high-rise construction in Indonesia. The predominant factors
influencing time overruns/delays were stated to be design changes, poor labour
productivity, inadequate planning and resource shortages. Whereas, in the case of cost
overruns, the most important factors were found to be material cost increases due to
 35

inflation, inaccurate materials estimating and degree of project complexity. Considering

both time and cost overruns together, the most important factors attributed as materials
cost increases due to inflation, inaccuracy of estimates, and lack of experience of
project type.

Strangely, the Indian experience was found to be totally contrary. In the

MOS&PI Project Implementation Status Report of Central Sector Projects pertaining
to Quarter Ending Mar 2008 costing ` 200 million, time overruns outnumbered the cost
overruns in the highway infrastructure projects. This is evident from the startling figure
of almost 70% of the projects entangled in time overruns as shown at Table 2.1

Table 2.1 Status of Highway Projects as on 31st Mar 2008

Category of Total No. Within Within Time Within Cost With Time
Project of Time and but with Cost but with and Cost
Projects Cost overrun Time overrun
overrun
Mega ( ` 10 - - - - -
billion and above)
Major ( ` 1.0 – 202 30 21 133 18
10 billion)
Medium ( ` 0.20 22 5 0 15 2
– 1.0 billion)
Total 224 35 21 148 20

2.4 Indian Context

As per MOS&PI (2008) status report, many of the projects have been delayed
on account of suspension of contracts and the time taken for award of fresh contracts.
This has resulted in rescheduling of large number of sections due to failure of contracts.
While the cost overruns due to general inflation cannot be avoided, the escalation on
account of delays can be minimized. The Standing Committees have been instituted in
each Ministry to review the time and cost overruns in projects and to fix responsibility
 36

for making the monitoring mechanism to be effective. In general, the following reasons
have been stated to be contributing to time and cost overruns:

Reasons for Time Overruns

x Lack of supporting infrastructure facilities

x Delay in finalisation of detailed engineering plans, release of drawings and delay
in availability of fronts
x Changes in scope/delay in finalization of the scope
x Industrial relations and law and order problems
x Delay and uncertainty in feedstock supply
x Pre-commissioning teething troubles
x Technology problems
x Geological surprises.

Reasons for Cost Overruns

x Time overruns
x Changes in rates of foreign exchange and statutory duties
x High cost of environmental safeguards and rehabilitation measures
x Higher cost of land acquisition
x Change in the scope of the project
x Higher prices being quoted by the bidders in certain areas
x Under-estimation of original cost
x General price rise.

Comptroller and Auditor General (2005) on the slow progress of NHDP

(Phase I) has criticized the NHAI for completing only 1846 km stretches, out of the
target 6359 km of national highways by June 2004. In its report, it is said that the
overall performance of NHAI in terms of output in NHDP Phase I (Golden
Quadrilateral) was only 29 percent. The report has pointed out that there was no
corporate plan to implement such a large project. Deficient Planning and inefficient
 37

Contract Management by the Design and Project Consultants contributed to the under-
performance.

Parliamentary Committee on Public Undertakings (2006) has observed that

there are several areas where the National Highways Authority of India (NHAI) and the
Ministries concerned need to get their act together. Based on its study on the
implementation of the NHDP Phase-I, the Committee stated that the lack of steps taken
by State governments to acquire land for construction of roads is the main factor for
delays. Additionally, the Committee has stated that a time limit for processing of bids
for awarding contracts should be drawn up and strictly adhered to. It has also called for
reports on performance of contractors on a day-to-day basis and imposition of stiffer
penalties in case they under-perform and cause delays. For expeditious land acquisition,
the National Highways Act, 1956 may be amended so that a time limit is prescribed for
initiation of arbitration proceedings, acquisition through mutual consent, and possibility
of invoking an urgency clause for faster acquisition in special cases. The Committee
also recommended the strengthening of project supervision methods adopted by the
NHAI.

Parliamentary Committee on Transport, Tourism and Culture (2005)

recommended that the NHAI should play a proactive role in ensuring strict compliance
of the targets fixed for completion of awarded projects and also the schedules for award
of contracts in the pending projects. The Committee was of the view that proper
verification of bank guarantees submitted by contractors should be undertaken at the
initial stage itself to avoid termination of the contracts at a later stage. The Committee
noted that increasing numbers of contracts are under implementation and being
awarded. Therefore, it was recommended that NHAI should be vigilant in respect of
each contract and should strictly enforce the compensation conditions in the contracts
in respect of non-performing contractors. The Committee, further, recommended that
NHAI should not wait for the targeted date of completion to initiate action but should
fix short-term targets (intermittent mile stones) for the contractors so that the projects
can be monitored constantly and immediate and early remedial action may be taken in
case of anticipated delays. The Committee also felt that NHAI should draw-up a
database of the performance of the contractors involved in NHDP and encourage
 38

outstanding contractors, who strictly comply with the construction standards and
quality control and also complete the projects well within the targeted date, to
undertake more and more projects as incentives. Pre-Budget Economic Survey (2007)
stated that the problems in land acquisition, removal of structures, shifting of utilities
and law and order in some states are among the problems affecting the growth of the
road sector. In order to facilitate investment in infrastructure, the government will have
to ensure long-term funding with long pay back periods, for example from insurance
and pension funds. Thus, the success on the infrastructure front will be facilitated by
the development of a vibrant bond market and pension and insurance reforms. A single
unified exchange-traded market for corporate bonds would help create a mature debt
market for financing infrastructure.

The 268th Flash Report on Central Sector Projects (2008) has brought out
that in the Road Transport and Highways Sector, 93 packages have slipped in the range
of 1-12 months vis-a-vis the scenario the previous month because of the various
reasons in general such as tardy progress by the contractor, termination of contract, law
and order situation in the region and late award of contract etc. Report of the Inter-
Ministerial Committee (2009) strongly recommended major steps for restructuring and
strengthening of National Highways Authority of India (NHAI), which is the
implementing agency for the National Highway projects. Institutional mechanisms are
required to be established to address bottlenecks arising from delays in environmental
clearance, land acquisition etc. A special focus is being provided for traffic
management and safety related issues through the proposed Directorate of Safety and
Traffic Management. It is expected that the sum total of these initiatives should be able
to deliver an efficient and safe highway network across the country. In order to specify
the policy and regulatory framework on a fair and transparent basis, a Model
Concession Agreement (MCA) for PPPs in national highways has been mandated. It is
expected that this common framework, based on international best practices, will
significantly increase the pace of project award as well as ensure an optimal balance of
risk and reward among all project participants.
 39

Narain (2010) emphasized on enhancing the powers of Independent Engineer

(IE) for overseeing the works of concessionaire. He hoped that in the days to come, the
hard core professionals particularly those extensively experienced in the highways
sector would be given more important roles to play in both decision making as also
providing adequate leadership to the concerned institutions, which are currently being
managed by generalists. In this context, the Delhi metro’s performance, headed by a
technocrat, is worthy of mention.

Sikdar (2010) states incomplete DPRs prepared in a great hurry due to political
interference with inadequate details in the absence of service roads, pedestrian and
cattle crossing facilities is greatly responsible for time and cost overruns. Although the
government shows its seriousness in getting private fund, there is no seriousness shown
in the rigor of the projects to be delivered within time and cost limit. He has suggested
to examine the contracting principles of awarding the work to lowest bidder ‘L1’ and
mechanisms to control the poor quality work delivered by unqualified sub-contractors.

2.5 Previous Studies

Al-Momani (2000) has tried to establish a relation between actual time vs

planned time of a construction projects. He had developed a simple linear regression
equation categorizing the projects as housing, office and administrative building,
school projects, medical centers and communication facilities. Though the various
statistical coefficients were satisfying 99% confidence level, the author has himself
admitted that the model failed to include intrinsic variables such as construction
experience of the contractors. More over this model serves as a post mortem analysis
since actual construction time is required to perform the analysis, thus useful only for
completed projects. Ram Singh’s (2010) study is aimed at covering all the
infrastructure sectors in India. He had made an attempt to evolve a general purpose
simultaneous equation for time overruns incorporating technical and natural factors,
contractual failures and economic factors. Though the model is exhaustive covering the
entire infrastructure sector, it has failed to explain the reasons for superior performance
of certain states.
 40

2.6 Proposed Research Work

The current literature focuses mainly on micro aspects of project management

ranging from finance and payment arrangements, poor contract management, materials
shortages, inaccurate estimating, overall price fluctuations, cash flow problems during
construction, relationship between different subcontractors' schedules in the execution
of the project, slowness of the owners' decision-making process etc. In the Indian
context, more of theoretical exercises have been carried out whether be it by
Comptroller and Auditor General or Parliament Committees or Ministry of Statistics
and Project Implementation (MOS&PI).

The author intends to venture into macro-management of highway projects

delving into the root causes hindering the project implementation. Any real diagnosis to
the plaguing problems of time and cost overruns should focus on the root causes rather
than mere symptoms. For instance, project delays due to poor performance of the
contractor may not be totally attributed to the defaulting contractor and the root cause
may be traced to broader issues such as capacity related problems viz., non-availability
of capable sub-contractors, deficiency of trained engineers in the employment market,
lack of construction equipments for hiring or co-ordination problems with the
government departments. During the course of research, it was found that strategies for
boosting the pace of highway construction can be ‘zero-cost’ solutions such as issuing
circulars by Government to state and central PWDs to relieve interested engineering
staff on 3 to 5 year leave without pay for pursuing jobs with construction firms inorder
to overcome the huge deficiency of trained engineers. By doing so, it would be a win-
win situation for PWDs which are over staffed and need not pay those staff who are on
leave. Further it would enhance the promotion chances for young engineers in PWDs
which are presently stagnated with no promotional avenues for experienced ones.
Overall, it would benefit the construction firms engaged in road construction through
availability of trained engineers.

Further, no substantial mathematical solutions have been offered so far on

predicting the overruns, hence the need for such studies. Trends for delays state wise
along with the actual reasons for delay if ascertained would help the top management in
diagnosing the issue of time and cost overruns. During the course or research work, the
 41

author has carried out extensive analytical study involving overruns and reasons behind
the project delays using the primary data collected from the questionnaires and
secondary data obtained from Project Implementation Units and compiled by MOS&PI.
 42

CHAPTER 3

ANALYSIS OF TIME AND COST OVERRUNS

The analysis on time and cost overruns is extensively covered in the
chapter 3. The status report of Ministry of Statistics and Project
Implementation (MOS&PI) highlights the prevailing scenario on the
inordinate delays caused in the implementation of highway projects.
Various vital statistical parameters of these highway projects were
deliberated in detail including the trend of time overruns. Extent of
delays and corresponding reasons were also brought out covering the
various geographical regions of the country. Certain interesting
inferences were also drawn with respect to the highway projects carried
out under various phases of NHDP. Regression analysis was carried out
on the ongoing highway projects using SPSS computer program and
mathematical equations were derived between various project
parameters to portray the behavior of time and cost overruns. Delay
Index model incorporating the various causes of delay was evolved for
estimation of time overruns and for predicting the future outcomes.

Contents

3.1 Introduction 42
3.2 Status Report on Project Implementation 43
3.3 Regression Analysis of Time and Cost Overruns 52
3.3.1 Assumptions in Regression Analysis 57
3.3.2 Regression Analysis Computations 57
3.3.3 Test for Significance 61
3.3.4 Regression Analysis Results 63
3.4 Delay Index Model for Estimation of Time Overruns 66

3.1 Introduction
Time overrun is the difference between the actual project duration and initially
expected duration and is expressed as a percentage of initially estimated duration. Cost
overrun is measured as actual out-turn costs minus estimated costs as a percentage of
 43

estimated costs. Actual costs are defined as real accounted construction costs
determined at the time of project completion. Estimated costs are defined as budgeted
or forecasted construction costs determined at the time of the decision to build [Chantal
C. Cantarelli., et al 2010]. Time and cost overruns have been a major problem affecting
the infrastructure projects in India resulting in rescheduling of large number of highway
projects. An analysis has been carried out on the various ongoing road construction
packages under National Highway Development Project (NHDP). While the cost
overruns are found to be up to 18% above original cost estimates that too within 10%
of the projects, time overruns are posing a major hindrance to project implementation.
This is evident from the startling figures of 70% of the projects entangled in time
overruns ranging from 3 to 78 months as shown at Table 3.1. It is quite evident that
though cost escalation due to general inflation cannot be avoided, the escalation on
account of delays can be minimized. The Standing Committees were instituted in each
Ministry to review the time and cost overruns in projects and to fix responsibility for
making the monitoring mechanism to be effective [MOS&PI 2008]. This chapter
analyses at length the various project parameters contributing to inordinate delays and
cost overruns in highway projects.

Table 3.1. Status of Highway Projects

(Source : Project Implementation Status Report (Jan–Mar 2008) Ministry of Statistics
and Programme Implementation, Govt of India)
Category of Project Nos Original Cost Revised Cost Overrun
( ` billion ) ( ` billion )
Total Projects 224 621.22 630.72 1.53 %
With cost overrun 21 64.49 76.10 18 %
With time overrun 148 361.79 371.06 3 - 78 months
With time and cost 20 61.84 72.22 3 - 65 months
overrun

3.2 Status Report on Project Implementation

As per MOS&PI report of 2008, a length of 9437 km under 224 highway
packages costing about ` 620 billion (14 billion US Dollars) was being implemented as
compiled at Appendix 3. These projects were at various stages of construction with
progress ranging from 0 to 100%. As seen from the statistics of the these projects given
 44

at Table 3.2, the package length varied from 0.48 km to as large as 136 km and cost
varied from ` 0.24 billion to ` 9.41 billion. Lalapet ROB with a length of 0.48 km is
the shortest length package costing ` 0.24 billion whereas Salem Ulundrupet Km 0.313
- 136.67 on NH 68 in Tamilnadu with an estimated cost of ` 9.41 billion was the
longest package (136 km) as well as costliest under NHDP. The average length of the
highway package was found to be 42.71 km with standard deviation of 24.6 km
amongst the total 224 highway projects and average cost turned out to be ` 2.77 billion
with standard deviation of ` 1.46 billion. An interesting thing to note at this juncture
that these 224 projects were at various stages of completion ranging from 0 % to 100%.

Table 3.2 Descriptive Statistics of Highway Projects on MOS&PI’s monitor

Parameter Populat Range Min Max Sum Mean

Std Dev

Kurtois
ion ‘n’

Skew
ness
Length

24.16

0.801

0.907
(km) 224 135 0.48 136 9437 42.13

Cost

0.883

1.217
( ` billion) 224 9.17 0.24 9.41 621.1 2.77 1.46

Cost

19.98
Overrun 224 2.19 - 0.64 1.55 9.50 0.04
0.20

3.76

( ` billion)
Progress in
-1.004
29.93

0.454

March 213 100 0 100 41.52

2008 (%)
Progress in
-0.393

-1.035

March
25.98

156 95.69 3.31 100 65.56

2010 (%)
Time
Overrun in
18.97

0.698

224 90 -12 78 3304 14.82

1.31

2008
(months)
Time
Overrun in
21.94

1.058

0.499

156 103 -5 98 5028 32.23

2010
(months)
 45

Fig 3.1 Frequency Distribution of Project Length (in Km)

Fig 3.2 Frequency Distribution of Project Cost ( ` in billion)

 46

Frequency distribution of project length and cost shown at Fig 3.1 and 3.2
reveals the prevailing pattern of the ongoing projects. The skewness measure the
variation of mean (horizontally) with respect to mean of normal distribution curve
whereas kurtosis measures the extent of vertical variation. Bangalore Neelamangala
road on NH4 under Phase III was completed 12 months prior to stipulated completion
schedule whereas Lucknow Kanpur highway recorded maximum time overrun of 78
months. The average progress of ongoing projects though went up from 40 % in 2008
to 65% in 2010 but at the same time maximum time overrun of 78 months noticed in
2008 registered an all time high at 98 months, thus registered an increase of 25 %. The
average time overrun of 14.82 months observed in the year 2008 went up to 32.23
months in the year 2010 i.e., registered an increase of 125 % as shown at Table 3.3,
Figs 3.3A and 3.3B. A high correlation of 0.906 was found between time overruns
reported in 2008 and 2010 amongst 156 highway projects implying that slippages in
completion schedules continues unabated and the significance value of 0.000 (< 0.05)
obtained in the correlation highlights the fact that high positive correlation is not by
mere chance. The gravity of time overruns can be gauged from the extent of delay in
many projects at a mere glance at Appendix 3. For instance, Lucknow-Kanpur section
of NH 25 stretching from km 59.5 to 75.5 listed at Srl No 1 of Appendix 3 originally
slated for completion by Dec 2001 was rescheduled for June 2008 i.e., delayed by 78
months.

Table 3.3 Frequency Distribution of Projects with Time Overruns

Time
91 - 100

<0 0
11 – 20

21 – 30

31 – 40

41 – 50

51 – 60

61 – 70

Overrun
71 - 80

81 - 90
0 – 10

(months)

No of
Projects 4.5 29.1 22.9 19.7 3.2 6.3 7.1 5.4 0.9 0.9 - -
in %
(2008)
No of
Projects 1.3 0.6 9.0 19.9 32 11.6 6.4 4.5 6.4 3.8 3.2 1.3
in %
(2010)
 47

Fig 3.3A Distribution of Time Overruns in 2008

Fig 3.3B Distribution of Time Overruns in 2010

 48

Apart from the quantitative data viz., name of road stretch being improved to
four lane or six lane, National Highway Route No, length in kms, Date of Approval,
cost and time overruns etc, the status reports carried descriptive picture furnished by
PIUs such as reasons for delays. Broadly the causes of delay brought out by PIUs were
land acquisition, utility shifting, poor contractor performance, termination of contract,
late conclusion of contract, rains/floods, law and order problems, and delays in
approvals of bridges ROB/RUBs. While tabulating the data at Appendix 3, numeral ‘1’
was inserted under the respective columns where the project was delayed on account of
those reasons for delay. In case the column is blank, the same is treated to be zero i.e.,
unaffected. The following illustration helps in understanding the methodology adopted
in tabulation.

Lucknow-Kanpur highway on NH 25 at Srl No 1 in the Appendix 3 was stated to be

delayed on account of poor contractor performance and termination of contract, hence
numeral ‘1’ was inserted under these columns and no entries were made in the
remaining columns. Nothing was entered for the project Purnea Gayakota in Bihar at
Srl No 2 since the project authorities failed to mention any reasons for delay in their
reports. Some time may be devoted on Appendix 3 to have the first hand information
on the data compiled from MOS&PI status reports.

In total, 72 projects were delayed on account of land acquisition and 21 out of

them happen to be from the state of Assam. It may be seen from Appendix 3, that a
project can be delayed on account of one or more reasons as recorded by the project
implementing authorities. Further in a significant number of projects, in as many as 101
projects, no data was entered since Project Implementing Units (PIUs) have not
mentioned any reasons for delay. Further it may be seen from the data presented at
Table 3.4 that only 17 out of 46 highway projects approved way back in the year 2000
were completed and remaining 29 were still in operation even after a lapse of 10 years.
The progress in respect of NSEW corridor is not different from GQ, but the situation
improved from Phase III onwards. It is quite noteworthy that initial phases of NHDP
approved in the year 2000 has experienced massive time overruns and the same got
reduced in the later phases especially from Phase III onwards as shown at Fig 3.4. The
 49

positive trend of reduced time overruns in the later phases may be attributed to
overcoming of the teething problems faced initially.

Table 3.4 Status of Approved Projects (March 2010)

in 2010 (months)
Year of Approval

in 2008 (months)
Progress
Completed

Average Delay

Average Delay
No of Projects

Original Cost
above
Length (km)

Projects NHDP
90%
( ` billion)
Component
No % No %

Apr 00 46 1674 104.21 38 60 17 36 12 26 GQ, NSEW

Dec 03 143 5665 394.77 10 27 41 28 20 14 NSEW
Mar 05 29 1553 112.10 1.5 19 9 31 4 13 Phase III
Jan 06 6 268 13.85 1.8 20 3 50 - - V, MORTH
Apr 07 2 63 10.43 0 5 - - - - NS Corridor
Jun 08 5 147 13.88 0 0 - - - - Phase III

Fig 3.4 Pattern of Time Overruns

 50

This observation is further reinforced after having a glance at Table 3.5 showing
NHDP phase wise delays. As may be seen from Table 3.5, out of 25 highway packages
under Golden Quadrilateral, mean delay of 37 months was reported in the MOS&PI
report of 2008 and the same touched at 43 months in the year 2010. Similarly North
South and East West corridor projects have experienced drastic time overruns. The
reasons attributed for time overruns in these initial phases are mainly attributed to land
acquisition, utility shifting, poor contractor performance. Further, it may be seen from
Table 3.5 that the East West Corridor project traversing through Bihar, Uttar Pradesh
and Assam accounts for maximum delays not only due to natural calamities such as
rains and floods but also from the law and order situation.

Table 3.5 NHDP Phase wise Delays

No of Projects affected by
No of Highway

(months) [Status

(months) [Status
Delay

Delay

Contractor Poor

Late Conclusion
Land Acquisition

ROB Approvals
Law and Order
Utility Shifting
Report 2008]

Report 2010]

Rains/Floods
Performance
Termination
of Contract

of Contract
NHDP Phase
Packages
Mean

Mean

Golden
25 37 43 10 8 16 9 3 1 3
Quadrilateral
East West
79 15 23 37 20 19 2 12 28 20 2
Corridor
Phase III 26 -12 12 8
MORT&H 11 4 15 4 1 2 1 1
North South
66 12 21 17 13 14 3 4 4
Corridor
Other Roads 7 10 20 1 2
Port
8 10 21 3 3 3
Connectivity
Phase V
2 0 0
(6 Laning)
Total 224 14 32 72 44 54 17 27 29 22 9

The data given in Table 3.6 showing the provincial administrative state wise
progress of various ongoing highway construction packages incorporating crucial
 51

information as average delay period and relevant causes of delay is a further testimony
to this fact. The north eastern state of Assam accounted for 90 percent of highway
projects in East West corridor delayed due to law and order. Assam also figured
prominently on the list of delayed projects owing to land acquisition, utility shifting
and rains/floods. The state of Bihar also accounted for maximum delays due to rains
and floods. Projects on North South Corridor in southern state of Tamilnadu were
reported to be affected with land acquisition and poor contractor performance as shown
at Table 3.6. The state of Orissa has recorded a massive time overruns in all the six
projects averaging at 53 months against an all India average of 32 months.

Table 3.6 State wise progress of various highway packages under NHDP
Mean
Highway Delay No of Projects affected by
Packages (months)
State/Provinc Contractor Poor

Late Conclusion

ROB Approvals
Status Report

Status Report

Law & Order

Rains/Floods
Performance

Cancellation
ial
Acquisition

of Contract
Contract
Shifting
Length

Administrati
Utility
Land
(km)

2008

2010

ve Unit
Cost
(`
No billion)
Assam 25 634 53.10 14 28 21 14 4 4 13 20
Andhra
14 691 43.22 3 8 1 1
Pradesh
Bihar 16 566 42.58 23 32 6 4 5 1 12 1
Chattisgarh 3 131 10.78 0 5
Delhi 2 112 6.20 15 0 1
Gujarat 8 525 34.17 14 3 4 3 1
Haryana 5 144 12.42 11 22 1 1 1 1
Jammu &
7 138 8.40 18 33 3 6 3 1 2
Kashmir
Jharkhand 1 79 3.99 42 63 1 1 1 1
Karnataka 14 527 40.93 21 28 1 1 2 3 1
Kerala 3 57 9.75 0 23 1 1
Maharastra 12 460 32.85 19 28 5 3 3
Madhya
16 821 41.77 3 16 2 2 2
Pradesh
Uttar Pradesh 36 1128 82.04 13 15 6 9 8 3 4 3
Orissa 6 274 14.39 49 53 4 5 4
Punjab 6 169 12.90 8 15 2 2
Rajasthan 15 780 51.13 8 7 7 3 9
Tamil Nadu 33 1596 108.20 6 16 13 1 12 3 7 1
West Bengal 2 58 3.40 0 47 1 1
Total 224 8890 612.22 14 32 72 44 54 17 27 29 22 9
 52

The statistics on cost overruns are given at Table 3.7 and it may be seen that 20
projects were reported to have shot up over the projected cost and 16 out of these 20 are
from East West Corridor. When compared to time overruns, cost overruns appear to be
under control since number of projects affected by cost overruns remained more or less
within 10% of the projects under the monitor from 2008 to 2010, whereas the quantum
of overall cost overrun has come down from 18% in 2008 to just 1.5% in 2010 due to
upward revision to project costs in 2010.

Table 3.7 Cost Overruns in Highway Projects (March 2010)

Cost Overruns
No of Road Total
As % of
NHDP Phase Highway Length Cost Amount
No Total
Packages (km) (` billion) (` billion)
Cost
Golden
25 1054 67.80 1 0.42 0.6
Quadrilateral
East West
79 2838 210.52 16 8.87 4.2
Corridor
Phase III 26 1549 115.21 0 0 0
MORT&H 11 296 24.51 0 0 0
North South
66 2639 170.62 2 -1.34 -0.7
Corridor
Other Roads 7 450 24.43 1 1.55 6.3
Port
8 247 14.99 0 0 0
Connectivity
Phase V (6
2 149 11.52 0 0 0
Laning)
Total 224 9222 639.60 20 9.50 1.5

The monitoring agency NHAI needs to address the issue of cost overruns in EW
corridor projects through periodical reviews for effective implementation. The status of
various projects from Phase I to VII was given in Table 1.3 at chapter 1, wherein it can
be seen that all projects are lagging far behind the original completion schedules.

3.3 Regression Analysis of Time and Cost Overruns

National Highway Development Project (NHDP) is a flagship program of
National Highway Authority of India. As per 2008 MOS&PI’s status report, out of 231
 53

highway projects, Delhi – Gurgaon expressway Km 143 – 42 on NH-8 was commenced

with an estimated cost of ` 5.55 billion but completed at a whopping sum of ` 7.10
billion, thus registered a highest cost overrun of ` 1.55 billion and also with time
overrun of 30 months. Whereas 19.5 km stretch of Bangalore Neelamangala road under
NHDP Phase III was reported to be completed 12 months prior to PDC (Proposed Date
of Completion) whereas Lucknow to Kanpur Km 59.5 - 75.5 which was commenced in
December 2001 was delayed by 78 months and the same touched 98 months in the
report released by MOS&PI in 2010. NHDP is thus a mixed bag containing successful
as well as delayed projects thus setting the perfect backdrop for statistical analysis.

Correlation and regression are intertwined tools generally performed together.

Correlation analysis is employed to measure the degree of association between two sets
of quantitative data. For instance, how the project cost or length is related to time and
cost overruns. Correlation is usually followed by regression analysis in many
applications. The main objective of regression analysis is to explain the variation in one
variable (dependent or criterion variable) based on the variation in one or more other
variables, called the independent or predictor variable. Thus, correlation analysis
determines the extent of relationship whereas regression establishes the equation
relating the dependent and independent variables. Karl Pearson, a well known statistical
scientist established the concept of product moment correlation ‘r’, the most widely
used statistic summarizing the strength of association between two metric variables.
This is also known as Pearson correlation coefficient and serves as an index to
determine whether a linear or straight line relationship exists between variables. From a
sample of n observations, X and Y, the product moment correlation or Pearson
coefficient of correlation ‘r’ can be determined as follows :

r = [{∑(Xi - X^)(Yi - Y^)} / √ {∑(Xi - X^)2 ∑(Yi - Y^)2}]

Dividing the numerator and denominator by (n – 1) gives

r = [{∑(Xi - X^)(Yi - Y^)} / (n – 1)] / √ [{∑(Xi - X^)2 / (n – 1)} {∑(Yi - Y^)2 / (n –

1)}] = COVxy / SxSy

In these equations, X^ and Y^ denote the sample means, and Sx and Sy are
standard deviations. COVxy, the covariance between independent variable X and
dependent variable Y, measures to the extent to which X and Y are related. The
 54

covariance may be either positive or negative. Division by SxSy achieves

standardization, so that r varies between – 1.0 and + 1.0. It may be noted that the
correlation coefficient is an absolute number and is not expressed in any unit of
measurement. The correlation coefficient between two variables will be same
regardless of their underlying units of measurement. Correlation is perfect positive if
coefficient of correlation ‘r’ is +1 and perfect negative incase r = -1. Thus the value of
‘r’ can range between -1 to +1 indicating the extent of relationship. Coefficient of
Determination ‘r2’ (r multiplied by r) is also employed in statistical analysis for
assessing the degree of relationship and greater the value of r2, higher the degree of
relationship. r2 signifies the proportion of the total variation in Y that is accounted for
by the variation in X. Both r and r2 are symmetric measures of association. In other
words, the correlation of X with Y is the same as the correlation of Y with X. It does
not matter which variable is considered to be the dependent variable and which the
independent. Coefficient of correlation ‘r’ measures the strength of the linear
relationship and is not designed to measure nonlinear relationship. Thus, the coefficient
of correlation ‘r’ = 0 merely indicates that there is no linear relationship between X and
Y. It does not mean that X and Y are unrelated, but there could be a nonlinear
relationship between them. In conducting multivariate data analysis, it is often useful to
examine simple correlation between each pair of variables. These results are presented
in the form of a correlation matrix, which indicates the coefficient of correlation
between each pair of variables. The computer programs available for conducting
regression analysis are SPSS, SAS, MINITAB and Excel. In the instant case, Statistical
Package for Social Sciences (SPSS) was used. Regression analysis using SPSS
computer software was carried out on the secondary data of 230 highway projects
collected from MOS&PI’s status report 2008. Correlation matrix developed amongst
various variables is reproduced at Table 3.8.
 55

Table 3.8 Correlation Matrix between Project Parameters

Correlations

Time Overrun

Time Overrun

Mar 2008 (%)

Mar 2010 (%)

Cost Overrun

In Mar 2008

In Mar 2010
Project Cost

(` in billion)
(` in billion)

(months)

(months)

Progress

Progress
Physical

Physical
Length
(km)

Length Pearson 1 .708** .078 -.244** -.221** .113 .119

(km) Correlation
Sig (2-tailed) .000 .237 .000 .006 .095 .134
n 231 230 230 230 156 219 160
Project Pearson
1 .116 -.356** -.342** .066 .040
Cost Correlation
(` in Sig (2-tailed) .079 .000 .000 .330 .616
billion)
n 230 230 230 155 218 159
Cost Pearson
1 .021 -.041 .264** -.043
Overrun Correlation
(` in Sig (2-tailed) .748 .612 .000 .587
billion)
n 230 230 155 218 159
Time Pearson
1 .906** .367** .132
Overrun Correlation
in Mar Sig (2-tailed) .000 .000 .096
2008
n 230 155 218 159
(months)
Time Pearson
1 .458** .093
Overrun Correlation
in Mar Sig.
2010 .000 .255
(2-tailed)
(months)
N 156 150 153
Physical Pearson
1 .690**
Progress Correlation
Mar 2008 Sig (2-tailed) .000
(%)
n 219 149
Physical Pearson
1
Progress Correlation
Mar 2010 Sig (2-tailed)
(%)
n 160
** - Correlation is significant at the 0.01 level (2-tailed).
Sig – Significance level
n – Population size
 56

These correlation coefficients provide a good indication on which independent

variables are highly correlated with the dependent variable. If the independent variables
are highly correlated among themselves, it may lead to complications in determining
which one is better among the two or three. The myriad of the data as given at
Appendix 3 is of no use if it remains unprocessed. Correlation matrix offers a great
advantage in simplifying the data in a single table showing the complex
interrelationship amongst the various parameters. The correlation coefficients arrived
between various project parameters as shown in the correlation matrix helps the
decision makers in interpreting the inter relationships as explained at Table 3.9.

Table 3.9 Relationships between Project Parameters

Project Parameters Relationship

Project Length Significant and Positive since correlation coefficient is 0.708. It
vs is natural since greater the length, costlier would be the project.
Project Cost At the same time, not necessarily true in all cases as evident
from the figure of cost per km length varied from ` 10.6 million
in the case of Karur Kangayam Km 218 - 277 in Tamilnadu to `
270 million for Panipat Elevated Highway Km 96 - 86.
Project Cost vs Pearson’s coefficient of correlation = - 0.356 implying a feeble
Time Overrun negative relationship.
Project Cost The relationship is very insignificant owing to the value of
vs correlation coefficient being 0.116. Moreover significance
Cost Overrun value ‘α’ being 0.079 which is greater than 0.05 implies not
satisfying the 95 % confidence level.
Time Overrun 2008 High degree of relationship as evident from the numeric value
vs of correlation coefficient of 0.906. This index should be an eye
Time Overrun 2010 opener to administration since the project delayed is bound to
get delayed further, hence requiring thorough planning to the
minute detail and strict monitoring from the very beginning.
 57

3.3.1 Assumptions in Regression Analysis

Correlation and regression are best applied together to test whether metric
variables are associated with each other, and whether the dependent variable can be
explained by some independent variables, or predicted from them. It would be better if
the researcher is aware of the basic assumptions in the regression models so that these
models can be effectively employed in practice. The underlying assumptions are listed
as under :

a) The error term is normally distributed. For each fixed value of X, the
distribution of Y is normal.
b) The means of all these normal distributions of Y, given X, lie on a straight line
with slope b. Regression equation is normally represented as Y = a + b.X where
Y is dependent variable, X is independent variable, a is intercept with the
vertical axis and b is slope of the regression line.
c) The mean of the error term is 0.
d) The variance of the error term is constant. This variance does not depend on the
values assumed by X.
e) The error terms are uncorrelated. In other words, the observations have been
drawn independently.

3.3.2 Regression Analysis Computations

Regression analysis is a powerful and flexible procedure for analyzing

associative relationships between a metric dependent variable and one or more
independent variables. Regression analysis is carried out to assess the existence of
relationship, strength of relationship, work out the mathematical equation relating the
independent and dependent variables and predict the values of dependent variable with
the help of mathematical equation derived. In the end, regression analysis is used for
controlling the other independent variables when evaluating the contributions of a
specific variable or set of variables. Although the independent variables may explain
the variation in the dependent variable, this does not necessarily imply causation. The
use of the terms dependent or criterion variables, and independent or predictor variables
in regression analysis arises from the mathematical relationship between the variables.
These terms do not imply that the criterion variable is dependent on the independent
 58

variables in a causal sense. Regression analysis is concerned with the nature and degree
of association between variables and does not imply or assume any causality. Multiple
regression involves a single dependent variable and two or more independent variables.
Step wise regression analysis was carried out with time overrun as dependent variable
and project length and cost as independent variables. The purpose of step wise
regression is to select the relevant variables which account for most of the variation.
The predictor variable ‘Length’ was removed by the SPSS computer program in the
backward elimination as shown at Table 3.10 since variation in Length did not account
for any substantial variation in the Time Overrun owing to significance value 0.859 >
acceptable value of 0.05. Thus the analysis is carried out as bi-variate regression with
Time Overrun as dependent variable and Project Cost as independent variable.

Table 3.10 Regression Analysis Computations

Excluded Variablesb
Collinearity
Partial Statistics
Model Beta In t Sig. Correlation Tolerance
a
1 Length km .016 .177 .859 .012 .499
a. Predictors in the Model: (Constant), Project Cost ` in billion
b. Dependent Variable: Time Overrun in Mar2008 months

Before arriving at the mathematical equation between the dependent and

independent variables through regression analysis, it is customary to plot the scatter
diagram or scattergram with dependent variable on the vertical axis and the
independent variable on the horizontal axis as shown at Fig 3.5. A scatter diagram is
useful for determining the form of relationship between the variables. A plot can alert
the researcher to patterns in the data, or to possible problems. Any unusual
combinations of the two variables can be easily identified. One can see the pattern, for
instance as one variable increases, so does the other. A straight line needs to fitted to
best describe the data. The most commonly used technique for fitting a straight line to a
scatter diagram is the least squares procedure. This technique determines the best-
fitting line by minimizing the square of the vertical distances of all the points from the
line. The best-fitting line is called the regression line. Any point that does not fall on
 59

the regression line is not fully accounted for. The vertical distance from the point to the
line is the error. The distances of all the points from the line are squared and added
together to arrive at the sum of squared errors. In fitting the line, the least squares
procedure minimizes the sum of squared errors. The best fitting line is called the
regression of Y on X, because the vertical distances are minimized. In a fit line, the
data points are fitted to a line that usually does not pass through all of the data points.
The fit line represents the trend of the data. Some fit lines are regression based. Others
are based on iterative weighted least squares. Fit lines apply to scatterplots. One can
create fit lines for all of the data values on a chart or for the data values in groups,
depending on what one selects when one creates the fit line. The scatter diagram
indicates whether the relationship between Y and X can be modeled as a straight line
and, consequently, whether the bivariate regression model is appropriate.

Fig 3.5 Scatter Plot showing best line fit

Before embarking on establishing the relationship between independent variable
(Project Cost) and dependent variable (Time Overrun) through regression, it was
 60

decided to assess the relative importance of the predictor variable i.e., project cost
through cross validation by splitting the data on the basis of year of approval. Cross
validation further ensures whether the regression model continues to hold good on
comparable data. As may be seen from the cross validation exercise carried out at Table
3.11, coefficient of determination ‘r2’ of split data based on the year of approval varied
from -28% to +26% of that of the total data for 230 odd projects establishing the
coherence of data.

Table 3.11 Cross validation of Regression Analysis

of

Coefficient of

Significance ‘α’
Sample Size ‘n’

Determination
Correlation
Approval

Remarks
(2 tailed)
factor
Year
S No

‘r2’
‘r’

i 2000 46 - 0.300 0.090 0.043 Satisfying confidence

ii 2003 142 - 0.320 0.102 0.000 limit of 95%. r2 varies
from -28% to +26%
iii 2005 29 - 0.405 0.160 0.029 of R2.
iv > 2005 13 - 0.419 0.170 0.154 α > 0.05 ;
not acceptable
Total Population n =230 r = - 0.356 r2 = 0.126 0.000

It may be noted that Time Overrun is taken as dependent variable and project
cost as independent or predictor variable. As per the regression coefficients generated
by SPSS computer program output as shown at Table 3.12, intercept (Constant)
represented as ‘a’ is calculated as 26.852 and slope of the line (b) has been arrived as
minus 4.407.

Table 3.12 . Regression Coefficients of Time Overrun on Project Cost Coefficientsa

Unstandardized Standardized
Coefficients Coefficients
Model b Std. Error Beta T Sig.
1 (Constant) 26.852 2.465 10.894 .000
Project Cost
- 4.407 .767 -.356 -5.747 .000
` in billion
a. Dependent Variable: Time Overrun in Mar 2008 months
 61

Following the statistical standard linear regression equation Y = a + bX, the

relation between time overruns and project cost through regression analysis is
established as

‘Time Overrun’ (in months) = 26.852 - 4.407 X (1)

where ‘X’ = Project Cost ( ` in billion).

3.3.3 Test for Significance

The statistical significance of the linear relationship between project cost and
time overruns can be tested by t test. The null hypothesis implies that there is no linear
relationship between project cost and time overruns. On the contrary, the alternate
hypothesis is that there is a relationship, positive or negative. The standard error (SE b)
is estimated as 0.767 as shown at Table 3.12 and the value of t statistic, t = b/SE b = -
4.407 / 0.767 = - 5.745. Since the size of population (n) is 230, degree of freedom is n –
2 = 228. From ‘t’ table, the critical value of t with 228 degrees of freedom and α = 0.05
(95 % confidence level) is 1.971 for a two tailed test. Since the calculated value of t
(5.745) is larger than the critical value ascertained from t table, the null hypothesis is
rejected. Hence there is a significant linear relationship between time overruns and
project cost. Though the model is acceptable, the low coefficient of correlation (r)
which is minus 0.356 indicates a feeble relation. The coefficient of determination (r sq
Linear) is 0.127 as shown in Fig 3.5, which underlines the fact that only 12% of the
variation in time overruns is explained by this model. Another reason for low value of
‘r’ is wide spread variation between various states geographically spread out in a vast
country like India, often referred to as Indian subcontinent. The regression equations
derived for each state as reproduced at Table 3.13 is a testimony to the gross disparity
amongst the states.

Table 3.13 Regression Analysis of Time Overruns in various States

Regression Equation Y = a ± b X
of
pertaining to

Significance

Y = Time Overrun TOR (in months)

Correlation

a = Constant (Ordinate value)

(2 tailed)

State
b = slope of regression line
Coeff
Data

X = Cost of highway project ( ` in crore)

‘α’
‘r’

[Conversion factor : 1 crore = 10 million]

2008 TOR = 7.263 + 0.033 x Cost 0.179 0.372
Assam
2010 TOR = 32.412 – 0.005 x Cost 0.014 0.948
 62

Regression Equation Y = a ± b X

of
pertaining to

Significance
Y = Time Overrun TOR (in months)

Correlation
a = Constant (Ordinate value)

(2 tailed)
State
b = slope of regression line

Coeff
Data X = Cost of highway project ( ` in crore)

‘α’
‘r’
[Conversion factor : 1 crore = 10 million]
Andhra 2008 TOR = 12.779 – 0.031 x Cost 0.477 0.085
Pradesh 2010 TOR = 32.941 – 0.075 x Cost 0.617 0.077
2008 TOR = 66.356 – 0.161 x Cost 0.672 0.004
Bihar
2010 TOR = 77.822 – 0.150 x Cost 0.585 0.028
Chattisgarh Computation not possible due to fewer than 2 data sets. Hence
Delhi relationship could not be established since data only for single project.
2008 TOR = 24.518 – 0.024 x Cost 0.167 0.692
Gujarat
2010 TOR = 6.092 – 0.005 x Cost 0.054 0.899
2008 TOR = 25.819 – 0.015 x Cost 0.110 0.890
Haryana
2010 TOR = 264.185 – 2.185 x Cost 1.000 0.000
Jammu and 2008 TOR = 12.315 + 0.051 x Cost 0.148 0.752
Kashmir 2010 TOR = 33.405 + 0.050 x Cost 0.832 0.112
2008 Computation not possible due to fewer than 2 data sets.
Jharkhand 2010 Hence relationship could not be established due to existence
of data only for a single project.
2008 TOR = 56.024 – 0.117 x Cost 0.639 0.014
Karnataka
2010 TOR = 83.483 – 0.136 x Cost 0.730 0.017
2008 Statistics could not be completed since TOR = 0, in all the
Kerala three cases.
2010 TOR = 46.971 – 0.074 x Cost 0.907 0.277
2008 TOR = 36.679 – 0.072 x Cost 0.594 0.054
Maharastra
2010 TOR = 54.508 – 0.076 x Cost 0.701 0.035
Madhya 2008 TOR = 8.322 – 0.017 x Cost 0.506 0.054
Pradesh 2010 TOR = 23.858 – 0.011 x Cost 0.154 0.632
Uttar 2008 TOR = 32.111 – 0.039 x Cost 0.250 0.142
Pradesh 2010 TOR = 51.523 – 0.050 x Cost 0.293 0.139
2008 TOR = 75.770 -0.123 x Cost 0.790 0.111
Orissa
2010 TOR = 70.954 + 0.030 x Cost 0.458 0.697
2008 TOR = 70.479 – 0.221 x Cost 0.736 0.156
Punjab
2010 TOR = 44.986 – 0.086 x Cost 0.340 0.660
2008 TOR = 23.567 – 0.046 x Cost 0.620 0.014
Rajasthan
2010 TOR = 80.421 – 0.225 x Cost 0.922 0.078
2008 TOR = 14.782 – 0.026 x Cost 0.379 0.030
Tamil Nadu
2010 TOR = 21.497 – 0.018 x Cost 0.181 0.305
West 2008 TOR = 33.226 – 0.121 x Cost 0.445 0.376
Bengal 2010 TOR = 13.315 + 0.105 x Cost 0.435 0.565
 63

3.3.4 Regression Analysis Results

Except for few states like Assam, Gujarat, Uttar Pradesh, Tamilnadu and West
Bengal, correlation coefficient ‘r’ appears to be reasonably acceptable. From statistical
point of view, correlation coefficient is preferred to be above 0.600 with confidence
level of 95% i.e., significance value ‘α’ ≤ 0.05. In the state of Jammu and Kashmir,
though the value of r is as high as 0.832, the significance value ‘α’ being 0.112
indicates that time overruns predicted by the regression equation falls outside the
generally acceptable 95% confidence level i.e., confidence level of 88.8% {(1.000 –
0.112) x 100}. Further it may be seen from the equation (1) arrived through regression
analysis as shown at paragraph 3.3.2 that time overrun is inversely proportional to
project cost implying larger the project in size and cost, lesser the time overruns. As per
the equation Time Overrun (in months) = 26.852 - 4.407 x Project Cost, project will not
experience any time overrun if project cost is ` 6 billion as shown at Table 3.14.

Table 3.14 Time Overrun vs Project Cost

Project Cost ‘X’ 1.0 2.0 3.0 4.0 5.0 6.0

(`` in billion)
Time Overrun 22 18 13 9 4 0
(months)

This argument stands logically true since larger project demands joint ventures
and conglomerates bringing in the expertise and knowhow, thus chances of success
rates for project completion also goes up. Bigger or more expensive projects also
experience less cost overruns when compared to less expensive projects probably
because bigger projects often have international consultants and longer planning and
evaluations. On similar lines, the equations for other parameters were derived from the
regression analysis. The same are reproduced at Table 3.15. It may be seen that
amongst the regression equations established at Table 3.15, time overruns of 2010 vs
2008 are closely related with the coefficient of correlation at 0.906 highlighting the fact
that project once delayed is bound to get further delayed, thus the necessity for close
monitoring from the very beginning of the project. As regards to cost overruns, the very
low values of r and r2 at 0.116 and 0.014 respectively coupled with significance value
of 0.076 (> 0.05) for confidence level of 95% literally rules out any meaningful
correlation with project cost.
 64

Table 3.15 Regression Equations

S Dependent Regression Equation Correlation

No Variable Parameters
i) Cost Overrun (0.016 x Project Cost) – 0.442 r = 0.116
r2 = 0.014
α = 0.076
ii) Time Overrun {1.055 x Time Overrun (2008)} + 16.777 r = 0.906
(2010) r2 = 0.821
α = 0.000
iii) Phy Progress {0.707 x Phy Progress (2008)} + 43.786 r = 0.690
(2010) r2 = 0.476
α = 0.000
iv) Phy Progress {0.707 x Phy Progress (2010)} + 43.786 r = 0.690;
(2012) r2 = 0.476
α = 0.000

As shown at Table 3.16, the correlation matrix of cost overruns with other
parameters such as project length, cost, physical progress and expenditure highlights
the low values of correlation coefficient ruling out any substantial relationships.
Notwithstanding the poor correlation of cost overruns, regression equations were
established in the affected states of Andhra Pradesh, Gujarat, Haryana, Uttar Pradesh
and Rajastan and reproduced at Table 3.17. A perfect positive correlation with the
value of correlation coefficient as ‘1’ and significance as ‘0’ was established for the
state of Haryana. Apart from Haryana, meaningful relation could be established for
Rajasthan alone. While data pertaining to Uttar Pradesh has produced high coefficient
of correlation, the higher value of significance deters its application for any meaningful
results on cost overruns.
 65

Table 3.16 Correlation Matrix of Cost Overruns

Percentage

Percentage
Prog 2008

Prog 2010

Mar 2007

Dec 2007
Overrun
Project

Project
Length

Expdr

Expdr
Cost

Cost
Cost Pearson
1 .259 .144 -.150 .112 .382* .386*
Overrun Correlation
Sig. (2-tailed) .175 .457 .445 .649 .041 .038
n 29 29 29 28 19 29 29
Project Pearson ** **
1 .779 -.175 -.085 .517 .794**
Cost Correlation
Sig. (2-tailed) .000 .372 .728 .004 .000
n 29 29 28 19 29 29
Project Pearson
1 -.011 -.053 .625** .757**
Length Correlation
Sig. (2-tailed) .955 .830 .000 .000
n 29 28 19 29 29
Percentage Pearson
1 .655** -.066 -.209
Prog 2008 Correlation
Sig. (2-tailed) .003 .738 .286
n 28 18 28 28
Percentage Pearson
1 .072 -.051
Prog 2010 Correlation
Sig. (2-tailed) .768 .836
n 19 19 19
Expdr Pearson
1 .800**
Mar 2007 Correlation
Sig. (2-tailed) .000
n 29 29
Expdr Pearson
1
Dec 2007 Correlation
Sig. (2-tailed)
n 29
*. Correlation is significant at the 0.05 level (2-tailed).
**. Correlation is significant at the 0.01 level (2-tailed).
 66

Table 3.17 Regression Analysis of Cost Overruns in States

Regression Equation

Coeff of Correlation
Data pertaining to Y=a±bX
Y = Cost Overrun ( ` in crore)

Significance ‘α’
a = Constant (Ordinate value)
State
b = slope of regression line

(2 tailed)
X = Cost of highway project
( ` in crore)

‘r’
[Conversion factor : 1 crore = 10 million]
Andhra 2008 Y = 12.120 – 5.596 x Cost 0.295 0.705
Pradesh
Gujarat 2008 Y = 247.402 – 0.488 x Cost 0.539 0.269
Haryana 2008 Y = - 24.912 + 0.324 x Cost 1.000 0.000
Uttar 2008 Y = 78.903 – 0.338 x Cost 0.669 0.533
Pradesh
Rajasthan 2008 Y = - 61.192 + 0.302 x Cost 0.779 0.005
All India 2008 Y = 3.697 + 0.092 x Cost 0.259 0.175

3.4 Delay Index Model for Estimation of Time Overruns

Before going into the model suggested by the author for quantifying delay, it is
noteworthy to mention about the previous studies carried out on this subject. Ayman H
Al-Momani of Jordan (2000) has tried to establish a relation between actual time vs
planned time of construction projects. He had developed a simple linear regression
equation categorizing the projects as housing, office and administrative building,
school projects, medical centers and communication facilities. Though the various
statistical coefficients were satisfying 99% confidence level, the author has himself
admitted that the model failed to include intrinsic variables such as construction
experience of the contractors. More over, this model serves as a post mortem analysis
since actual construction time is required to perform the analysis, thus useful only for
completed projects. Ram Singh’s study (2010) is aimed at covering all the
infrastructure sectors in India. He had made an attempt to evolve a general purpose
simultaneous equation for time overruns incorporating technical and natural factors,
contractual failures and economic factors. Though the model is exhaustive covering the
entire infrastructure sector, it has failed to explain the reasons for superior performance
of certain states.
 67

The model suggested in this research study is specially tailored to highway

projects and effort has been made to incorporate the inputs given by Project
Implementation Units (PIUs). Further the equations developed are state specific and
simple to understand and implement. For the delay factors enunciated by Project
Implementation Units (PIUs) viz., land acquisition, utility shifting, poor contractor
performance, termination of contract, late conclusion of contract, rains/floods, law and
order problems, and delays in approvals of bridges ROB/RUBs. Weightages for each
delay factor are calculated as follows. For instance as shown in Table 3.6, in the state of
Assam, 21 projects were delayed on account of land acquisition vis-à-vis total 72 land
acquisition delayed projects. Hence weightage for land acquisition in the state of
Assam was arrived as 21/72 i.e., 0.292. On the same analogy, state wise weightages are
calculated for the remaining delay factors such as utility shifting, poor contractor
performance etc. The exhaustive list of weightages for each factor arranged in the
alphabetical order of states is given in Table 3.18.
Table 3.18 Weightages for Delay Index Model
No of Projects affected by Weightages
Land Acquisition

Land Acquisition
Contractor Poor

Contractor Poor
Late Conclusion

Late Conclusion
ROB Approvals

ROB Approvals
Termination of

Termination of
Utility Shifting

Utility Shifting
Law & Order

Law & Order

Performance

Rains/Floods

Performance

Rains/Floods
State/
of Contract

of Contract
Contract

Contract

Administrat
ive Unit
Total (6)
Total (2)

Total (3)

Total (4)

Total (5)

Total (7)

Total (8)

Total (9)
(2) /

(3) /

(4) /

(5) /

(6) /

(7) /

(8) /

(9) /

(1) (2) (3) (4) (5) (6) (7) (8) (9)

Andhra Pradesh
1 1 0.000 0.000 0.019 0.059 0.000 0.000 0.000 0.000

Assam 21 14 4 4 13 20 0.292 0.318 0.074 0.000 0.148 0.448 0.909 0.000

Bihar 6 4 5 1 12 1 0.083 0.091 0.093 0.000 0.037 0.414 0.045 0.000

0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

Chattisgarh
Delhi 1 0.000 0.000 0.019 0.000 0.000 0.000 0.000 0.000

Gujarat 4 3 1 0.000 0.000 0.074 0.000 0.000 0.103 0.000 0.111

Haryana 1 1 1 1 0.014 0.023 0.019 0.059 0.000 0.000 0.000 0.000

Jammu &
3 6 3 1 2 0.042 0.136 0.056 0.000 0.037 0.000 0.000 0.222
kashmir

Jharkhand 1 1 1 1 0.014 0.023 0.019 0.000 0.000 0.000 0.045 0.000

Karnataka 1 1 2 3 1 0.014 0.023 0.037 0.176 0.037 0.000 0.000 0.000

0.000
1 1 0.000 0.000 0.019 0.059 0.000 0.000 0.000
Kerala
 68

No of Projects affected by Weightages

Utility Shifting

Utility Shifting
Law & Order

Law & Order

Conclusion of

Conclusion of
Rains/Floods

Rains/Floods
Performance

Performance
Termination

Termination
of Contract

of Contract
Acquisition

Acquisition
Contractor

Contractor
Approvals

Approvals
Contract

Contract
Land

Land
ROB

ROB
Poor

Poor
Late

Late
State/
Administrati
ve Unit

Total (2)

Total (3)

Total (4)

Total (5)

Total (6)

Total (7)

Total (8)

Total (9)
(1)

(2) /

(3) /

(4) /

(5) /

(8) /
(6) /

(7) /

(9) /
(2) (3) (4) (5) (6) (7) (8) (9)

Madhya
2 2 2 0.028 0.045 0.037 0.000 0.000 0.000 0.000 0.000
Pradesh

Maharastra 5 3 3 0.069 0.068 0.000 0.000 0.000 0.000 0.000 0.333

Orissa 4 5 4 0.056 0.000 0.093 0.235 0.000 0.000 0.000 0.000

Punjab 2 2 0.028 0.045 0.000 0.000 0.000 0.000 0.000 0.000

Rajasthan 7 3 9 0.097 0.000 0.056 0.000 0.333 0.000 0.000 0.000

13 1 12 3 7 1 0.181 0.023 0.222 0.176 0.259 0.034 0.000 0.000

Tamil Nadu
Uttar 6 9 8 3 4 3 0.083 0.205 0.148 0.176 0.148 0.000 0.000 0.333
Pradesh
1 1 0.000 0.000 0.019 0.059 0.000 0.000 0.000 0.000
West Bengal

Total 72 44 54 17 27 29 22 9

Based on the weightages so calculated, Delay Index was evaluated for each
highway project as shown at Appendix 3. To start with the Lucknow-Kanpur Section of
the National Highway NH 25 between km 59.5 to 75.5 as shown at Serial No 1 in
Appendix 3, the project was stated to be delayed on account of poor contractor
performance and termination of contract. From Table 3.18, the corresponding
weightages for these delay factors are 0.148 and 0.176 and when these weightages are
summed up, we get Delay Index as 0.324 for this stretch of Lucknow-Kanpur highway
Km 59.5 to 75.5. Similarly Delay Indices were calculated and inserted for all the 224
highway projects listed in Appendix 3. As seen from the Appendix 3, Delay Index (DI)
was shown as zero for as many as 101 projects where PIUs have not intimated any
reasons for delay. The value of Delay Index varied from 0.0278 to 1.9672. With the
help of computer assisted software SPSS, Regression Analysis was carried out to
ascertain the relation between the calculated Delay Index and the time overruns. The
relationship so determined between Delay Index and time overruns using linear
regression technique is depicted at Table 3.19.
 69

Table 3.19 Established Relationship between Delay Index and Time Overruns
Regression Equation Y = a + b X

of
Correlation

Significanc
pertaining
Y = Time Overrun TOR (in months)

(2 tailed)
State a = Ordinate (constant)

Coeff
Data b = slope of regression line

e ‘α’
‘r’
to
X = Delay Index (DI) of highway project
2008 TOR = 11.575 + 1.595 x DI 0.121 0.547
Assam
2010 TOR = 27.969 + 2.475 x DI 0.121 0.583
Andhra 2008 TOR = 0.846 + 454.772 x DI 0.946 0.000
Pradesh 2010 TOR = 8.750 + 585.383 x DI 0.950 0.000
2008 TOR = 47.402 – 59.648 x DI 0.583 0.018
Bihar
2010 TOR = 71.258 – 82.219 x DI 0.661 0.010
Chattisgarh Computation not possible due to fewer than 2 data sets. Hence relationship
Delhi could not be established due to data only for single project.
2008 TOR = - 0.884 + 168.67 x DI 0.919 0.001
Gujarat
2010 TOR = - 0.513 + 48.902 x DI 0.398 0.329
2008 TOR = 5.808 + 568.629 x DI 0.706 0.294
Haryana
2010 TOR = - 4.996 + 1106.122 x DI 0.982 0.121
Jammu and 2008 TOR = 35.049 – 73.117 x DI 0.633 0.127
Kashmir 2010 TOR = 64.200 – 108.053 x DI 0.807 0.053
Computation not possible due to fewer than 2 data sets. Hence relationship
Jharkhand
could not be established due to data only for single project.
2008 TOR = 16.585 + 21.509 x DI 0.071 0.835
Karnataka
2010 TOR = 15.647 + 132.564 x DI 0.567 0.185
2008 Statistics could not be completed since TOR = 0, in all the three
Kerala cases.
2010 TOR = 12.500 + 407.503 x DI 0.991 0.087
2008 TOR = 8.088 + 527.018 x DI 0.785 0.004
Maharastra
2010 TOR = 26.723 + 487.571 x DI 0.695 0.038
Madhya 2008 TOR = 2.846 + 51.259 x DI 0.485 0.067
Pradesh 2010 TOR = 18.643 – 169.020 x DI 0.558 0.025
Uttar 2008 TOR = 11.167 + 45.408 x DI 0.476 0.003
Pradesh 2010 TOR = 25.907 + 50.407 x DI 0.497 0.008
2008 TOR = 30.476 + 75.077 x DI 0.732 0.098
Orissa
2010 TOR = - 5.494 + 231.442 x DI 0.986 0.000
2008 TOR = 3 + 218.579 x DI 0.922 0.026
Punjab
2010 TOR = 14.5 + 198.087 x DI 0.980 0.020
2008 TOR = 7.5 + 28.263 x DI 0.050 0.859
Rajasthan
2010 TOR = 9.75 – 247.945 x DI 0.241 0.386
2008 TOR = 1.256 – 0.439 x DI 0.018 0.953
Tamil Nadu
2010 TOR = 36.46 – 35.644 x DI 0.602 0.153
2008 TOR = 4.5 + 316.947 x DI 0.558 0.250
West Bengal
2010 TOR = 17.5 + 200.517 x DI 0.330 0.523
 70

It may be noted that the unit of Delay Index is mere number whereas time
overrun is assessed in months. From the Table 3.19, it may be noted that strong
correlation existed between Delay index and time overruns as evident from the high
value of coefficient of correlation ‘r’ except for few states such as Assam and
Rajasthan. The significance value ‘α’ indicates the confidence level with which the
results can be predicted i.e., α = 0.01 and 0.05 signifies confidence level of 99% and
95% respectively. From statistical point of view, correlation coefficient is preferred to
be above 0.600 with confidence level of 95%. In the case of 3 states viz., Chattisgarh,
Delhi and Jharkhand, computation was not possible due to fewer than 2 data sets and
relationship could not be established due to existence of data only for a single project.
The basic input given by PIUs on the delay factors need to be substituted to arrive at
Delay Index based on the weightages given in Table 3.18. The proposed model is
simple to understand as explained in the following illustration.

Illustration of Delay Index Model :

Name of Project : Kadapa-Mydukur-Kurnool

Length : 188.752 kms
National Highway : NH 18
Project Cost : ` 1585 crore
NHDP Phase : III
Letter of Acceptance (LOA) : Feb 2009
Date of Commencement : Nov 2010
Scheduled Completion by : May 2013
Present Progress : 70% (as on Jul 2013)
Expected Completion by : Mar 2014 (as intimated by PIU)
Contractor : KMC and IVRCL Consortium
Independent Engineer (IE) : Aarevee Associates Architects
Mode of Execution : BOT (Toll)

Since the project is located in Andhra Pradesh and the reason for slow progress
being poor performance of the contractor, the weightage for delay factor as per Table
3.18 is 0.019. For this lone delay factor, Delay Index = 0.019. Referring to Table 3.19,
 71

Time Overrun (based on 2008 data) = 0.846 + 454.772 x 0.019

= 9.48 months
Time Overrun (as per 2010 data) = 8.750 + 585.383 x 0.019
= 19.87 months
Time Overrun as ascertained from PIU = 10 months (Mar 2014 – May 2013)

As seen from the above illustration, time overrun ascertained through Delay
Index model adopting regression technique is more or less coinciding with the ground
data. Further it may be noted that time overrun assessed by PIU based on ground data
in practice can vary. Since the input is taken as per PIU data, the model can be stated to
reflect the accurate ground conditions. But it suffers from the limitation that
computation is not possible in case of lack of data or paucity of information from PIUs.
Moreover the gravity of the delay factors cannot be assessed in the absence of any such
information from PIUs. This shortcoming can be overcome if PIUs are asked to share
the information on delay factors as well as their intensity in the form of certain ranking
on linear rating scale. Further no significant relationship between Delay Index and
Time Overruns could be established on all India basis for all the 224 projects since
correlation coefficient ‘r’ was just 0.109 with significance value ‘α’ of 0.104, thus
implying no uniformity amongst the states. However, the model suggested in this study
has a scope for improvement if data on delay factors can be further elaborated by PIUs
in terms of intensity of delay factors and also bringing out the reasons for delay where
PIUs have left blank for as many as 101 projects. The time overruns on various
ongoing projects have been assessed based on Delay Index model as well as regression
equations developed on the basis of Project Cost as shown at Table 3.13 are tabulated
at Appendix 3A. In majority of the cases, time overruns arrived based on DI and
Project Cost are more or less matching and not much variation is noticed. Further these
overruns may not be sacrosanct and only serves as an estimate which can alert the
officials for concentrating on those projects with high time overruns. The author’s
paper titled “Estimation of Time Overruns on National Highway Development
Project using Regression Analysis” has been published in the reputed journal Indian
Highways, Indian Road Congress (IRC) Journal, Sep 2014, pp 31-45.
 72

CHAPTER 4

CAUSES OF DELAYS AND SUGGESTED MEASURES

Chapter 4 further takes the analytical part of the research one step
further in ascertaining the various causes of delays and subsequent
diagnosis of the time and cost overruns. The prominent reasons for
delay such as land acquisition was discussed in detail going into the
historical and legislative perspectives. Questionnaire survey findings on
the land acquisition front were also debated with focus on micro level
organizational problems and the recent government initiatives in the
form of land legislation bill introduced in the parliament. A sizeable
portion of thesis was devoted to lacunae in the preparation of Detailed
Project Reports (DPRs) and their impact on the highway projects along
with the corrective measures. The next most important problem was
contractual matters and dispute resolution mechanism suggesting
procedural reforms for effective contract administration. Further
financing mechanisms of NHDP were discussed at length ever since the
inception of NHDP. Certain innovative suggestions such as beneficiary
participation and auctioning of highway projects were aired for the
sound implementation of NHDP. Strategies for future implementation
such as project packaging, appropriate mix of BOT, ways and means to
address the capacity constraints were highlights of this chapter.

Contents

4.1 Introduction 73
4.2 Pre-Construction Activities 78
4.2.1 Land Acquisition 78
4.2.1.1 Legislations on Land Acquisition 79
4.2.1.2 Land Acquisition on NHDP 81
4.2.1.3 Micro Level Organizational Problems 85
4.2.1.4 Government’s Initiatives on Land Acquisition 87
4.2.2 Shifting of Utilities 88
4.2.2.1 Contractual Provisions 90
 73

4.2.2.2 Problems due to Unmapped Utilities 91

4.2.2.3 Service Ducts 92
4.2.3 Detailed Project Reports (DPRs) 93
4.2.4 Financing Mechanism of NHDP 97
4.2.4.1 Excessive Dependence on BOT 99
4.2.4.2 Galloping Fund Requirement 103
4.2.4.3 Packaging of Concession Agreements 106
4.3 Construction Phase 108
4.3.1 Contractual Problems 109
4.3.2 Capacity Constraints 115
4.3.2.1 Strategies for Manpower Deficiencies 116
4.3.2.2 Solutions to Tackle Scarcity of Materials 118
4.3.2.3 Questionnaire Survey on Capacity Constraints 120
4.3.3 Rains/Floods 121
4.3.3.1 Solutions for Overcoming Natural Calamities 122
4.3.4 Design Changes/Critical Structures Delays 124
4.3.4.1 Appropriate Design and Construction Methodology 124
4.3.4.2 Fast Track Construction 126
4.3.5 Deterioration of Law and Order 128
4.4 Post Mortem Analysis 129
4.4.1 Policy Decisions 130
4.4.1.1 Shifted Priorities to Rural Development 131
4.4.1.2 Huge Increase in Scope of Works 131
4.4.1.3 Slow Pace on Increased Involvement of Private Sector 132
4.4.1.4 Laxity on implementing National Road Transport Policy 134
4.4.2 Cross Continental Experiences 135

4.1 Introduction

Worldwide, cost and time overruns on highway projects are critical issues that
adversely affect project delivery and public relations, and disrupts highway programs.
Cost and time overruns generally result from factors that occur at various phases of the
project life cycle [Abhishek Bhargava et al, 2010]. Construction delays are for the most
 74

part costly, and completing projects on time is beneficial to all project parties.
Therefore, it is essential to identify the actual causes of delay in order to minimize and
avoid the delays and their corresponding expenses [Abd El-Razek et al, 2008]. Delays
give rise to disruptions of work and loss of productivity, late completion of project,
increased time related costs, and third party claims and abandonment or termination of
contract. Construction projects involve more variables and uncertainties than in the
product line. This factor increases the probability of delay occurrences in construction
projects and makes effective management important to reduce the diversions from the
original program [Rahman et al, 2006].

National Highway Development Project (NHDP) to upgrade, rehabilitate and

widen 45000 km of Indian highways at an estimated ` 2200 billion (2006 prices) was
commenced in 1998. This prestigious project has experienced tremendous time and cost
overruns to the extent that even after a lapse of 15 long years since its commencement,
only 40 percent of highways earmarked for four laning were completed and also the
estimated construction cost has gone up by more than 60 percent. The reasons
attributed by Project Implementation Units (PIUs) of National Highways Authority of
India for delays are mainly due to land acquisition (32%), utility shifting (19%) and
tardy performance of contractors (24%) as shown at Table 4.1.

Out of 224 highway projects listed in the MOS&PI’s status report of March
2008, 148 projects were affected by time overruns and another 20 projects were stated
to plagued by time as well as cost overruns. A significant number of projects were
found delayed due to rains/floods and law and order situation. Delays in approvals for
ROBs, design changes to structures and their delayed completion are also stated to be
few important factors. Projects were reported to be delayed on account of tree felling in
an about dozen cases. In six odd cases, the projects were complete except for critical
structures such as bridges on the water gaps thus practically remained incomplete. One
court case, 4 Nos encroachments and 12 tree felling cases were also reported by Project
Implementing Units (PIUs) as reasons for delay in completion of projects. These
factors responsible for delays are discussed in detail in the succeeding paragraphs.
 75

Table 4.1 Causes of Delays enunciated by PIUs

Percentage with respect to

No of No of Projects No of Projects
Cause of Delay Remarks
Projects on MOS&PI's with time overrun
Radar (224 Nos) (168 Nos)
Land Acquisition 72 32.14 42.86 Projects
Utility Shifting 44 19.64 26.19 with
Poor Contractor purely
Performance 54 24.11 32.14 time
Termination of overrun :
Contracts 17 7.59 10.12 148
Late Conclusion of
Contracts 27 12.05 16.07 Projects
Rains/Floods 29 12.95 17.26 with time
Law and Order 22 9.82 13.10 and cost
Delay in Approvals overrun :
of ROBs 9 4.02 5.36 20
Design Changes to
Structures 3 1.34 1.79 Total
Critical Structures Projects
Delayed 6 2.68 3.57 with time
Legal/Court Cases 1 0.45 0.60 overrun :
Encroachments 4 1.79 2.38 168
Tree Felling 12 5.36 7.14

Ministry of Road Transport and Highways (MORT&H) submitted before the

Parliamentary Committee attributing the time overruns on the projects in Bihar to
undue delay in award of works due to lengthy tendering process; lack of good
contractors and poor response necessitating re-tendering; slackness on the part of the
contractors for timely completion; and erratic supply of bitumen [Prabhunath Singh
2006]. Inadequate project preparation, planning and implementation; and delay in
construction, supply of raw materials and equipment by contractors were stated to be
underlying reasons for cost overruns in public sector projects [Sebastian Morris 1990].
A quote from Asian Development Bank (ADB) Validation Report (Project Number:
23251 and Loan Number: 1274) on five different projects in various parts of the
country viz., Gurgaon-Kotputi on NH8, Raniganj-Panagarth on NH2, Banwa Adda-
 76

Bararkar on NH2, Nandigama-Vijayawada on NH9 and Vijayawada-Eluru on NH5

reveals the pan-India reasons for delays reproduced as under :
“There were several reasons for delays, including (a) delays in the start of
prequalification due to late preparation of bidding documents, (b) delays in handing
over the Project to NHAI from MOST, (c) delays in the award of civil works contracts
due to nine cases of litigation, (d) slow start of civil works, (e) delays in land
acquisition, (f) design deficiencies, (g) late approval of a change of scope for Contract
V, (h) delays in approval of contract variations, and (i) delays in clearing encumbrances
from the right-of-way. Delays in project implementation translated into lost benefits
and often higher costs. The Project was completed in June 2002 compared with an
appraisal estimate of October 1998, a 44-month delay” [Asian Development Bank
2008].

The questionnaire survey carried out by the author has revealed various
interesting results as shown at Table 4.2. The results of questionnaire survey as
tabulated at Table 4.2 also puts the preconstruction activities and delays in various
approvals on the top of the list of factors responsible for time overruns. Delays in
Project Approvals, requisite clearances from concerned Ministries as Railways for
ROB/RUBs, MOEF for forest clearance etc were the second most important factor
followed by poor response from concessionaires and shifted priorities of the
government of the day. Law and order also figured quite high on the agenda of the
respondents to the questionnaire owing to the fact that nearly one third of the NHDP
falls in the naxal infested red corridor area.

Table 4.2 Questionnaire Survey Results on Delay Factors

Significance
Cumulative

Importance
Weightage

Weightage
Aggregate

Reasons for Slippage in

Relative

Relative
Factor

Factor
Rank

Completion Schedules
Index
Score
Total

(1) (2) (3) (4) (5) (6) (7)

Pre-construction activities such as
land acquisition, utility shifting etc 16.84 16.84 87.27
1 288 Significant
not geared up so as to keep pace with % % %
the proposed completion schedules.
 77

Significance
Cumulative

Importance
Weightage

Weightage
Aggregate
Reasons for Slippage in

Relative

Relative
Factor

Factor
Rank

Completion Schedules

Index
Score
Total
(1) (2) (3) (4) (5) (6) (7)
Delays in Project Approvals,
requisite clearances from concerned
14.74 31.58 76.36 Significant
2 Ministries as Railways for 252
% % %
ROB/RUBs, MOEF for forest
clearance etc.
Poor response from Concessionaires
to take up projects on BOT (Toll and
11.58 43.16 60.00 Significant
3 Annuity) basis and in that eventuality 198
% % %
inadequacy of funds to get the work
on EPC mode.
Change of guard at the highest
echelons of governance from NDA to
10.88 54.04 56.36 Significant
4 UPA of 2004 - 09 leading to shifted 186
% % %
priorities from highways to rural
development
With 70 odd districts often referred as
red corridor affected by naxalism and
a couple of border states such as J&K
10.88 64.91 56.36 Significant
4 and Assam infected with 186
% % %
insurgency/militancy, law and order
has taken a significant toll on
progress of highway projects.
Delays in preparation of Detailed
Project Reports (DPRs) incorporating 74.74 50.91 Significant
5 168 9.82%
feasibility studies, traffic projections % %
and revenues etc
Contracting Principles of awarding
the work to ‘L1’ alone, thus inferior
84.56 50.91
5 and overloaded contractors unable to 168 9.82% Significant
% %
undertake the gigantic workload of
NHDP leading to inordinate delays.
Lack of supporting infrastructure/
equipment bank such as construction 93.33 45.45
6 150 8.77% Insignificant
machinery, hot mix plants, % %
specialized subcontractors etc.
Rains and floods on annual pattern in
100 34.55
7 some parts or the other have affected 114 6.67% Insignificant
% %
the highway construction
G/Total 1710
Note : (i) Rank at Col (1) is based on the total score at Col (3)
(ii) Total Aggregate Score at Col (3) = Sum total of ratings assigned by all the
 78

respondents to the questionnaire as per the following response scale :

5 - Highly critical factor; 4 - Critical factor; 3 - Important factor;
2 - Significant factor; 1 - Not so important factor; 0 - No Significance at all
(iii) Relative Factor Weightage at Col (4) = {Total Score at Col (3) / G Total of Col (3)
i.e., 2976} x 100
(iv) Cumulative Factor Weightage at Col (5) = Cumulative value of Col (4)
(v) Relative Importance Index at Col (6) = [{Col (3)}/{Highest Response Scale i.e., 5 x
N}] x 100, where N = no of respondents to the questionnaire i.e., 66 in the instant case.
(vi) Significance at Col (7) = Significant if Cumulative Factor Weightage at Col (5) is
within 80% (or) Relative Importance Index at Col (6) is above 50% confirming to
minimum bench mark criterion.

The various causes of delays along with suggested remedial measures have been
discussed under the following subheads :
A) Pre-construction Activities – Land Acquisition, Utility Shifting, Detailed Project
Reports (DPRs), Financing Mechanism.
B) Construction Phase – Contractual problems, Capacity Constraints, Rains/Floods,
Design Changes/Critical Structures Delayed, Law and Order situation.
C) Post Mortem Analysis – Policy Decisions, Cross Continental Experiences.

4.2 Pre-Construction Activities

Much of the progress on the road construction will depend on how rapidly the
constraints such as delays in land acquisition, clearances from State Forest and
Pollution Control Board (PCB), removal of structures and shifting of utilities are
removed so that the stage is set for construction.

4.2.1 Land Acquisition (LA)

Land acquisition more than any other factor is the most important constraint on
development and especially in infrastructure development [Sebastian Morris and Ajay
Pandey 2007]. Land is not only a precious asset in an agrarian economy like India, but
it carries an emotional and sentimental value. No individual likes to get displaced from
his native origins especially during forcible evictions required for developmental
activities such as construction of dams and reservoirs, highways, industries etc. The
history of land acquisition right from the dawn of independence is riddled with
political, economic and social implications requiring massive interference from
parliament, executive as well as judiciary. Historical Perspective of Land Acquisition
 79

which has recorded a massive confrontation between legislature and executive on the
one hand and judiciary on the other hand in the fight for individual liberties versus
broader social justice encompassing the society as a whole has been elaborated in detail
at Appendix 4. Though the debate on the powers of the Government to acquire the land
for public purpose is a settled issue, aspects relating to compensation, litigation and
prolonged delays in the process of acquisition is a matter of serious concern. The
quantum of land acquisition is unprecedented for National Highway Development
Project (NHDP) works since about 8300 hectares required for the Golden Quadrilateral
alone and another 19000 hectares for NSEW corridor. Further the criticality of timely
acquisition of land can be gauged from the obligatory clause from Model Concession
Agreement on BOT projects for handing over the land for construction purposes,
reproduced as under :
“The site shall be made available to the concessionaire pursuant hereto by
NHAI free from all encumbrances and occupations and without the concessionaire
being required to make any payment to NHAI on account of any costs, expenses and
charges for the use of such site for the duration of the concession period save and
except as otherwise expressly provided in this Agreement. NHAI shall procure for the
Concessionaire access to the site, free of encumbrances, not later than 150 (one
hundred and fifty) days from the date of this Agreement. Provided, however, that if
NHAI does not enable such access to any part or parts of the site for any reason other
than a Force Majeure Event or breach of this Agreement by the Concessionaire, NHAI
shall pay to the Concessionaire damages at the rate of ` 1000 (Rupees one thousand)
per month per 1000 (one thousand) sq. meters or part thereof if such area is required by
the Concessionaire for Construction Works. Such damages shall be raised to ` 2000
(Rupees two thousand) per month after Commercial Operations Date (COD) if such
area is essential for the smooth and efficient operation of the Project Highway”.

4.2.1.1 Legislations on Land Acquisition

The Land acquisition Act, 1894 was enacted for the purpose of compulsorily
acquiring of land required for public purpose or for purpose of companies and for
determination of the amount of compensation to be paid on account of such acquisition
[Jagannadha Rao 2002]. The Land Acquisition Act of 1894 is a legal Act in India
 80

which allows the Government of India to acquire any land in the country. “Land
Acquisition” literally means acquiring of land for some public purpose by
government/government agency, as authorised by the law, from the individual
landowner(s) after paying a government fixed compensation in lieu of losses incurred
by land owner(s) due to surrendering of his/their land to the concerned government
agency [LA Act 1894]. After independence in 1947, the Indian Government adopted
“Land Acquisition Act 1894” as a tool for land acquisition. Since then various
amendments have been made to the 1894 act from time to time. Despite these
amendments, the administrative procedures have remained same thus quite often
coming under severe criticism due to lengthy process of LA.

The National Highways Act 1956 is an act to provide for the declaration of
certain highways to be national highways and for matters connected therewith. National
Highway Act 1956 was employed for acquisition of land for widening of various
highways under NHDP. The various clauses pertaining to land acquisition under this
act such as power to acquire land, survey, hearing of objections, declaration of
acquisition, power to take possession, determination of amount payable as
compensation, deposit and payment of amount etc makes this enactment a powerful
tool with the highway administrators. The competent authority under National
Highways Act has certain powers of civil court and Land Acquisition Act of 1894 shall
not apply in the context of highways [NH Act 1956]. Acquisition of land for highways
under the ambit of National Highways Act, 1956 has advantages such as time taken in
land acquisition is much less as compared to the LA Act, purpose of acquisition can’t
be challenged and preliminary works as survey, dig/bore work and setting out
boundaries can be commenced immediately on notification without waiting for
declaration, land is considered acquired on issuance of declaration under sec 3D,
arbitration process to address compensation related grievances, and acquisition cannot
be referred to the courts. At the same time, NH Act 1956 suffers from few limitations
viz., revenue authorities not familiar with NH Act and land records not updated causing
inherent delays in the LA process, delay in award of compensation by competent
authorities, inadequate institutional framework at the state level, difficult to transfer LA
 81

plans on ground, inter-departmental coordination and emergency clause for acquisition

does not exist as provisioned in LA Act, 1894.

4.2.1.2 Land Acquisition on NHDP

Acquisition of land prior to commencement of construction is a basic pre-

requisite in any project, but it is of vital importance in the case of highway projects due
to its linear spread traversing through forests including wild life sanctuaries/protected
zones, habitated areas, rivers, cultivated lands comprising private as well as
Government lands. Land acquisition was found to be the biggest hurdle in the
implementation of highway projects in as much as one third of the projects listed by
MOS&PI as shown at Appendix 5. The responses received in the questionnaire survey
on various issues pertaining to land acquisition are tabulated in Table 4.3. The
following methodology was adopted for ranking the causes of delay. In total, 14 causes
of delays were mentioned in the questionnaire and respondents were asked to rate them
as per the following response scale according to their importance : 5 - Highly critical
factor; 4 - Critical factor; 3 - Important factor; 2 - Significant factor; 1 - Not so
important factor; 0 - No Significance at all. Out of 150 questionnaires circulated,
responses were received from 66 people. The ratings assigned by the 66 respondents
were summed up for every cause of delay and arranged in the descending order.
Removal of encroachments, Lower compensation amount and Delayed resettlement and
rehabilitation were ranked at top in the questionnaire survey with total aggregate score
of 252 as shown in Table 4.3. Relative factor weightage is determined by dividing the
total aggregate score at Col (3) of Table 4.3 by the G/Total of Column (3) i.e., 2976.
The same when multiplied by 100 gives the percentage value and tabulated accordingly
at Column (4). Cumulative Factor Weightage at Column (5) is the cumulative value of
Column (4) and these values are summed up to 100% as shown at Column (5). Relative
Importance Index at Column (6) = [{Column (3)}/{Highest Response Scale i.e., 5 x
N}] x 100, where N = no of respondents to the questionnaire i.e., 66 in the instant case.
Once Cumulative Factor Weightage at Coulmn (5) and Relative Importance Index at
Column (6) are assessed, Relevance at Column (7) is ascertained following the criteria
as under :
 82

Significant if Cumulative Factor Weightage at Column (5) is within 80% (or) Relative
Importance Index at Column (6) is above 50% confirming to minimum bench mark
criterion. Hence pragmacity lies in managing those significant factors and leaving
insignificant ones.
Table 4.3 Delays on account of Land Acquisition

Significance
Cumulative

Importance
Weightage

Weightage
Aggregate
Causes of Delay on Land Acquisition

Relative

Relative
Factor

Factor

Index
Score
Front
Rank

Total
(1) (2) (3) (4) (5) (6) (7)
Removal of encroachments, which
1 252 8.47% 8.47% 76% Significant
quite often take political colours
Delayed resettlement and rehabilitation
1 252 8.47% 16.94% 76% Significant
of Affected Populace (APs)
Fixing of compensation amount on
lower side due to fear of vigilance Significant
1 252 8.47% 25.40% 76%
department, thus compelling the
affected populace to go to court of law.
Disputes in assessment of
Significant
2 compensation amount for acquired 246 8.27% 33.67% 75%
land
Stricter Forest Laws and tedious Significant
3 234 7.86% 41.53% 71%
Environmental Clearences
Resistance by land holders especially Significant
3 234 7.86% 49.40% 71%
in tribal and remote areas
Corruption and extensive delays in Significant
4 228 7.66% 57.06% 69%
disbursing of compensation amount
Non availability or incomplete land Significant
4 228 7.66% 64.72% 69%
records
Lack of commitment from land Significant
5 192 6.45% 71.17% 58%
revenue record holders
Insufficient or ill trained survey staff Significant
6 186 6.25% 77.42% 56%
preparing land details
Lengthy acquisition procedures as per Significant
6 186 6.25% 83.67% 56%
LA or NH Acts
Non Passage of LA Amendment Bill Significant
6 186 6.25% 89.92% 56%
(2007) in the Parliament
Insignifica
7 Frequent changes to alignment 162 5.44% 95.36% 49%
nt
Acquisition of land much beyond Insignifica
8 138 4.64% 100.0% 42%
actual requirement citing future needs nt
G/Total 2976
Note : (i) Rank at Col (1) is based on the total score at Col (3)
(ii) Total Aggregate Score at Col (3) = Sum total of ratings assigned by all the respondents to the
questionnaire as per the following response scale : 5 - Highly critical factor; 4 - Critical factor; 3 -
Important factor; 2 - Significant factor; 1 - Not so important factor; 0 - No Significance at all
 83

(iii) Relative Factor Weightage at Col (4) = {Total Score at Col (3) / G Total of Col (3) i.e., 2976}
x 100
(iv) Cumulative Factor Weightage at Col (5) = Cumulative value of Col (4)
(v) Relative Importance Index at Col (6) = [{Col (3)}/{Highest Response Scale i.e., 5 x N}] x 100,
where N = no of respondents to the questionnaire i.e., 66 in the instant case.
(vi) Significance at Col (7) = Significant if Cumulative Factor Weightage at Col (5) is within 80%
(or) Relative Importance Index at Col (6) is above 50% confirming to minimum bench mark
criterion.

By following the above methodology, 12 causes for delays in land acquisition

were found significant and the last 2 reasons viz., Frequent changes to alignment and
Acquisition of land much beyond actual requirement citing future needs turned out to
be insignificant. Amongst the relevant factors, delays in resettlement and rehabilitation
(R&R) and compensation amount are being addressed to a great extent through the
introduction of Land Acquisition Bill 2011 in the Indian Parliament. The National
Policy on Resettlement and Rehabilitation for Project-Affected Families of 2003
provided additional compensation to project-affected families, over and above the
provisions of the Land Acquisition Act. It recognized the multipurpose use of land by
both title holders and non-title holders of the land. State laws varied in terms of their
compensation package and the definition of project affected people to some extent
[Raghuram 2009]. Whereas issues related to non-availability of revenue records, ill
trained survey staff ranked from 4 to 6 and deserves greater attention thus a separate
paragraph has been devoted under micro-organisational problems. Except for a couple
of factors ranked at the bottom, almost all of them were found to be significant as
shown at Table 4.3 which is a proof of the complex nature of land acquisition due to
pervasiveness of the causes spread in the broad spectrum from political to socio-
economic factors.

Stricter forest laws and tedious environmental clearences were also stated to be
an important reason for delays in the implementation of many highway projects.
Judicial intervention has also further strengthened the case for green cover. There have
been some cases recently, where the Supreme Court of India has intervened and have
forced the government to make changes in laws [Mohammed Arif et al., 2009].
Environmental Impact Assessment has been made mandatory for all projects costing
more than ` 1 billion and the period for obtaining requisite forest clearences is very
time consuming. Infact, Ministry of Road Transport has filed a case on Environment
 84

Ministry in the highest court of the country for impeding highway projects by
Environment Ministry. Procedures envisaging Environmental and Forest Clearences are
covered under Appendix 6. Review meetings at cabinet secretary level have become a
regular practice now with the Government of India to sort out all the important issues
involving various ministries. It usually takes 12-14 months to obtain clearance under
the Forest (Conservation) Act, 1980, for acquiring forest land required for rural road
projects. This is a major implementation constraint in hill states like Uttarakhand,
Himachal Pradesh, Jammu and Kashmir as well as in Madhya Pradesh, Chattisgarh,
Orissa and Maharashtra. Many developmental schemes could not be implemented
because of Forest Conservation Act, 1980. Steps should be taken to amend the related
laws immediately. While determining the parameters in this regard, the available forest
cover in the state and its present economic and social status should be kept in mind. It
is also suggested to use degraded forest land for compensatory afforestation. The states
which have more forest cover than the national average should be given special
financial assistance for preservation and conservation of forests [Madhu Koda 2007].

In order to ensure that forest clearance is available by the time projects are
ready for execution, States have been advised to initiate pro-active upfront action for
seeking forest clearances as soon as survey commences for preparation of Detailed
Project Reports (DPRs). State Governments are, therefore, requested to review the
process and procedure of formulating proposals for obtaining forest clearance with a
view to compressing this time frame [DARPG 2008]. The Indian government’s
ambitious target of building 20 km national highway per day is becoming difficult to
achieve in the event of refusal by few states like UP, Gujarat, Delhi, Tamil Nadu and
J&K to sign the State Support Agreement (SSA) which is an umbrella pact that calls for
all necessary support from the State Governments in the matters of land acquisition,
providing right of way (ROW), removal of encroachments, shifting of utilities,
rehabilitation and maintaining local law and order and so on. In the absence of SSA,
NHAI has to approach states for approval of each and every project. The reason stated
by these states for not signing the agreement is the existence of a provision in SSA that
stops states from building competing roads. Uttar Pradesh, for example, is working on
several expressways that run parallel to projects planned by NHAI. The paradigm shift
 85

to Public Private Partnership (PPP) mode for future development of highways does not
absolve the Government of its basic responsibilities for creating conducive investment
environment.

4.2.1.3 Micro-Level Organisational Problems

On close interaction with revenue authorities in various states, it was revealed

that acute shortage of trained personnel for carrying out survey of land to be acquired is
stated to be a major handicap with them. The survey equipment is outdated and in few
revenue circles, even basic equipment for survey work as link chain, measuring tape etc
is missing. The state of revenue records is pathetic in most of the states and in the
absence of constantly updated revenue particulars, it would be rather impossible to
prepare the crucial details of land holdings and most importantly assessment of
compensation. The delays in land acquisition and construction which is mainly due to
poor planning and pre-engineering work and the same can be improved substantially by
using improved technologies such as aerial surveying methods to cut down construction
time and cost. Aerial Photography capturing large areas for land acquisition analysis
can be integrated with Geographical Information System (GIS) or ESRI software.
Further these multiple images are mosaicked or stitched together and by ortho-
rectification technique corrected to exact scale. The digital aerial mapping is fast,
efficient, accurate with high resolution and offers real time imagery. With legislative
reforms on the anvil, most of the procedural problems associated with land acquisition
are hopefully resolved. The focus hence should be on the attitudinal part of the dealing
officials in making them to realise on the importance of strict adherence to time
schedules. This can be achieved through the establishment of Nodal Officers at various
levels of Government and charting out a convenient time frame which should be
binding on the part of revenue officials for issuance of Notification from the date of
receipt of requisition from the indenting department, preparation of land particulars and
assessment of compensation from the date of notification etc. If required, creation of
special adhoc cells for survey work or outsourcing through an empanelled specialized
survey consultants has to be seriously thought of and a system of charging to the
requisitioning department in the form of fee may be evolved so as to meet the incurring
expenditure towards field job as well as office work. The recruitment and training of
surveyors with the latest state of art technology at well equipped ITIs, Polytechnics and
 86

premier institutes such as National Academy of Construction (NAC) Hyderabad is to

be seriously considered by state governments. Further certain incentives in the form of
increments, prior promotions etc can be offered for trainees so as to encourage them to
adopt these latest skills.

Digitisation of revenue maps and data though it takes a quite a lot of effort, time
and expenditure is a worthy exercise for all the times to come. Difficulty in transferring
of land acquisition plans on ground has also been reported at many locations in the
absence of updated revenue records and the solution to this vexed issue lies in extensive
employment of Geographic Information System (GIS) duly supported by satellite
imagery. GIS based Satellite Imagery is proposed to be implemented by NHAI on a
pilot project of 1200 km covering country’s far flung areas. Pilot project to be part of
updating existing GIS and web based Road Information System (RIS) of 7,000 km
which is available on NHAI website. The envisaged benefits would be better
management of ongoing works by verification and authentication of ground progress.
In the case of new projects, GIS based satellite imagery can be used for route alignment
and fixation as per feasibility report/ DPR submitted by consultant; correct provisioning
and location of costly structures such as RUB/ ROB/ flyover etc; and land acquisition,
shifting of utilities, identification of forest area, encroachments etc [MORT&H 2011].
Further, institutional framework at the state level should be modernised and inter-
departmental coordination should be improved for inducing accountability. The dealing
staff should be made familiar with Land Acquisition and National Highway Acts and
the same can be achieved through seminars, refresher courses and departmental
examinations linking to their annual increments so as to create awareness as well as
seriousness towards their job. On all important assignments such as NHDP works,
extensive delegation of powers to ground executives should be considered where ever
delays are expected in the issuance of declaration by the concerned secretary to the
state government or his authorised official in the Secretariat. All these measures are
intended to avoid delays in the entire land acquisition proceedings from the notification
stage till its culmination in making the award, disbursement of compensation amount to
affected parties and taking possession of the acquired land.
 87

4.2.1.4 Government’s Initiatives on Land Acquisition

The Ministry of Statistics and Programme Implementation’s (MOS&PI) status

report of 742 central projects in vital infrastructure sectors as railways, roads, power,
aviation, mines, coal, telecom, water resources, steel, atomic energy etc states that 216
projects (29%) show cost over-runs and another 269 (36%) have time overruns. Total
cost overrun is about ` 508.60 billion as against an original approved cost of ` 771.18
billion i.e., a staggering 66% jump in expenditure is the price of this delay. Many of the
projects suffer from inadequacies in project formulation and implementation, resulting
in large time and cost overruns, affecting the very viability of the projects and acting as
drag on the economy. As an apex institution for monitoring, the Ministry had initiated
several measures to improve the system and procedures relating to project formulation,
implementation and monitoring such as two stage clearance and appointment of nodal
officers, improved procedures for cost benefit analysis and approval, delegation of
more powers at project level as well as close monitoring, release of project
implementation manual and training of project managers, institution of MOU system
and empowered committee mechanism, adoption of milestone network based
monitoring, and prioritization of projects matching with available resources. Apart from
several project based interventions, a host of other measures, like, amendment to Land
Acquisition Act and development of standard rehabilitation package, on-line
computerised monitoring system etc. are under progress. Improvement in the extant
procedures for formulation, appraisal and downstream procedures would further
improve the delivery of projects. Time and cost overruns in projects in the environment
of uncertainties, inadequate funding, delay in land acquisition, law and order problems,
general escalation in costs and high cost of capital cannot be eliminated altogether, but
these can be controlled by suitable measures.

It was revealed from Table 4.1 that majority of the projects were delayed due to
land acquisition and moreover time overruns noticed in land acquisition delayed
projects ranged between 5 to 78 months in 2008 and the same rose to 19 (minimum)
and 96 (maximum) in the year 2010. The average delay in land acquisition affected
projects was 42 months in 2008 and the same went up to 68 months. Realising the
gravity of the problem by Government of India, National Land Acquisition and
 88

Rehabilitation and Resettlement Bill 2011 was recently introduced in the Indian
Parliament which aims to address rehabilitation and resettlement (R&R) by providing
safeguards for both landowners and livelihood losers while clearly defining the “public
purpose” for which land can be acquired by the government. The proposed bill will not
supersede 16 of the specialized items of legislation on land acquisition, including those
for special economic zones and railways [MoRD 2011]. Apart from envisaging time
bound higher compensation to the affected populace, the bill also addresses the key
R&R issues. The salient features of the bill are given at Appendix 7.

Few suggestions evolved from the respondents to the questionnaires such as

adoption of single window centralized Land Acquisition policy without interference of
local/state governments, compensation at market price, providing alternate avenues of
livelihood to the displaced populace, avoiding the acquisition of fertile agricultural
lands etc for expediting the LA process. Though land acquisition is being carried out
under National Highway Act 1956 with the aim for expeditious acquisition, but in
practice dependence on revenue officials does not cease due to incomplete revenue
records and paucity of trained survey staff for conducting survey to assess the land
requirement.

4.2.2 Shifting of Utilities

Utilities are classified as those bearing water and those related to power,
communication and petroleum. The number of agencies involved has created a huge
mess under the road. Shifting of electrical poles & heavy transmission towers, water
pipe lines, irrigation channels, telephone poles, underground communication cables,
gas/oil pipes etc is infact a major source of worry for any highway engineer
undertaking the road widening works. Constant liaison with the various agencies
requesting them for joint survey and forwarding the necessary estimates for shifting or
relocating the same is the first & fore most step in this tedious process. This is no mean
task considering the number of agencies and casual bureaucratic mode of functioning
prevalent in most of the departments. Thereafter processing those estimates till their
sanction along with payment to the concerned agency so as to enable them to do the
needful for undertaking road construction work is not an easy task. Even after payment
of requisite compensation to these agencies, considerable time is taken for removal &
 89

shifting of the existing utilities and sometimes no guarantee for shifting of utilities even
after making payment as illustrated below.

Nandi Infrastructure Corridor Enterprise (NICE) had entered into a tripartite

framework agreement (FWA) with the Karnataka Government and Bangalore - Mysore
Infrastructure Corridor Project (BMICP) in April 1997 for implementing the
expressway road project between Bangalore and Mysore. It had written to the Chief
Engineer Bangalore Water Supply & Sewerage Board (BWSSB) stating that water
pipelines had to be shifted at four locations in Bangalore to enable it to complete the
expressway. NICE had written several times to the BWSSB to permit it to shift the
lines to enable it to complete the project. It had even deposited ` 77.10 lakh with the
BWSSB towards shifting of these utility lines. Since the water board had not taken any
action to shift the utilities, NICE had moved a petition in the Karnataka High Court. In
reply, the BWSSB stated that the water lines could not be shifted as they were essential
for providing water to residents of western and northern parts of Bangalore and to
several establishments such as the Indian Air Force (IAF) station near Yelahanka,
Border Security Force (BSF) headquarters in Yelahanka and the International Airport
(BIAL) which is coming up at Devanahalli. The matter is pending before the court
leaving the high profile expressway project to uncertainty.

It is of no surprise to anyone that shifting of utilities has been reported by

Project Implementation Units (PIUs) as a third major hindrance next only to land
acquisition and tardy performance of contractor. A significant number of projects i.e.,
44 out of 224 projects under the radar of MOS&PI were found to be delayed due to
shifting of utilities which amounts to 19.64%. In other words, out of every 5 projects,
one is delayed on account of shifting of utilities. Project authorities while reporting the
reasons for delays, shifting of utilities was found mostly along with land acquisition.
The time over-runs are ranging between 30 – 40 months, in few cases even up to 50
months i.e., full 4 years in a project duration generally fixed as four years from the date
of approval/sanction which amounts to 100 % time over-run. In the case of one project
in Bihar on NH 31 from Purnea to Goyakota (km 419 – 447), the commissioning of the
project is delayed by 50 months which is solely attributed to shifting of utilities.
 90

4.2.2.1 Contractual Provisions

The contractor shall be responsible to coordinate with service provider /

concerned authorities for cutting of trees, shifting of utilities and removal of
encroachments etc. and making the site unencumbered from the project construction
area required for completion of work. This includes initial and frequent follow-up
meetings / actions / discussions with each involved service provider/concerned
authorities. The contractor is not entitled for any additional compensation for delay in
cutting of trees, shifting of utilities and removal of encroachments by the service
provider/concerned authorities. Payment for cutting of frees and shifting of utilities as
required by the concerned department shall be made by the Employer. Drawings
scheduling the affected encumbrances such as trees and services like water pipes,
sewers, oil pipelines, cables, gas ducts, electricity lines, accessories, telephone poles
and OFC cables etc. included in the contract document shall be verified by the
contractor for accuracy of scope. The Employer will make payments to the respective
service provider / authorities for cutting of trees and shifting of utilities, wherever
required. The contractor will obtain necessary approval from such Authorities after
payments by the Employer and also in cases where payments are not required to be
made for such shifting. The Employer will also write to all concerned departments/
service provider organization for expediting and facilitating cutting of trees, shifting of
utilities and removal of encroachment etc.

Any services affected by the Works must be temporarily supported by the

Contractor who must also take all measures reasonably required by the various bodies
to protect their services and property during the progress of the Works. It shall be
deemed to be part of the Contract and no extra payment shall be made for the same.
The Contractor may be required to carry out certain works for and on behalf of the
various bodies and he shall also provide, with the prior approval of the Engineer, such
assistance to the various bodies as may be authorized by the Engineer. Two weeks
before undertaking work which would involve any obstruction whatsoever to traffic the
Contractor shall submit, for the Engineers approval, a Traffic Control Plan. The plan
shall include typical drawings for temporary diversions, details of arrangements for
construction under traffic including details of traffic arrangements proposed to be in
 91

place after the cessation of work each day. Special consideration shall be given in the
preparation of the Traffic Control Plan to the safety of pedestrians and workers and
delineation of the roadway at night.

4.2.2.2 Problems Due To Unmapped Utilities

In urban areas, every new construction runs the risk of meeting an existing
utility underground. Most of these are unmarked on maps that might not be updated for
ages, invariably forcing the new projects to shift in part or whole, and leading to huge
escalations in cost. Work on the five flyovers in Central Mumbai has been delayed by a
forced shift of utilities (water mains in the median) which were not anticipated earlier,
according to Mumbai Metropolitan Region Development Authority (MMRDA). The
Municipal Corporation had earlier given the go-ahead, saying no major utility would be
disturbed, but excavation later uncovered large water and power utilities. The shifting
of utilities not only delayed the flyover project, but has resulted in a 25-30 per cent
escalation in the cost. In the absence of updated map of underground utilities, road and
bridge construction workers use the hit and miss technique, digging up the general area
of the foundation until they come across some piped utilities.

Every conceivable utility from electric cables to water mains and phone cables
runs beneath the roads, complicating construction, especially pile driving and
foundation laying. Many instances of piles driven into the ground were abandoned
necessitating design changes. In the construction of one flyover in Mumbai,
anticipating such troubles, the MSRDC has cleverly included the provision for shifting
these utilities in the tender documents. The incentives were offered @ ` 1 lakh for each
day of early project completion to ensure that contractors work double quick to rectify
the fault. The Mumbai Metro rail corridor’s cost rose due to a shift of utilities and
subsequent design changes, another Pedestrian Grade Separation Scheme dropped
midway due to difficulties in shifting utilities and subsequent cost escalation, and even
Eastern Freeway has similar problems of utility shift thus an urgent need for an updated
mapping system for underground utilities. Over 20 agencies are involved in supplying
the various services and when contracts for projects are awarded, they take permission
and start digging without any knowledge of what lies beneath. Though the urban local
 92

body does give a rough estimate of utilities under the site, it is mostly outdated as
newer utilities have been added. Unified mapping of underground utilities like in
Western countries would resolve the issue. According to urban planners, utility
mapping is a crucial aspect of comprehensive urban management. Updated utility
mapping is very important for urban planning anywhere. Unfortunately in our country,
there is no accuracy in maps and records are not maintained and this can be made
feasible by better coordination between various agencies. There are technologies and
equipments available for mapping but they are expensive. The respective urban bodies
as Municipal Corporations should make some efforts to get mappings done on priority.

4.2.2.3 Service Ducts

Removal of trees, shifting of utilities (electric poles) for realignment of bridge

at Nidampur bypass 2 kms long from RD. 83428 to 85488 on Patiala-Sangrur road of
NH 64 was costing ` 11.16 crore. Thus huge cost involved in utility shifting apart from
the time involved can be well appreciated. In all future extensions or widening of
existing road infrastructure especially in urban patches should be well thought of by
providing suitable arrangements such as service ducts which might again add up to the
cost of the project. An underground walkable service duct/corridor (Fig 4.1) is being
provided along the 20 km six lane IT Expressway on Old Mamallapuram Road (OMR)
in Chennai developed by Tamil Nadu Road Development Company (TNRDC).
Connecting pipes were laid to run cables and other wires of utility services across the
road.

Fig 4.1 Underground Walkable Service Duct/Corridor along the 20 km six lane IT
Expressway on Old Mamallapuram Road (OMR) in Chennai
 93

The highlight of the IT expressway would be that there would be no

digging/damage by service/utility providers. Provisions were incorporated in the
Partnership and Development Agreement (PDA) for ensuring that the road was free
from digging/damage for 30 years.

4.2.3 Detailed Project Reports (DPRs)

Financial Express dated back to 20th October 2009 quoted that ‘Despite good
response to the bidding process for NHDP Phase III projects, there is a backlog of
contracts to be awarded to successful bidders. Between May and Aug 2009, against a
target of 28 contracts, only eight could be awarded and NHAI officials attributed this
backlog to problems like non-preparation of DPRs and bid documents’. The Ministry of
Road Transport came under severe criticism as it had failed to capitalise the upsurge in
highway investment as evident through negative grants in many contracts. It may be
noted that in Build Operate Transfer (BOT) contracts under Public Private Partnership
(PPP) introduced for development of highway infrastructure, Viability Gap Funding
(VGF) up to 40% of project cost based on competitive bidding for each project is being
permitted by Government of India. In the competitive bidding, who so ever demands
less VGF from the government is declared the successful bidder. In few attractive
routes under Phase III and V, construction firms instead of seeking VGF from the
government, they in turn were offering grants to the government, thus termed as
negative grants. In a couple of years, National Highways Authority of India (NHAI)
has received revenues to the tune of ` 20 billion through negative grants. Delays in
preparation of project reports has been ranked at No 5 spot in the Table 4.2 depicting
the questionnaire survey probing on project delays. 90% of the respondents felt that
reasons for poor quality of DPRs owes to less time given to consultants for preparation
of DPRs as shown at Table 4.4.

Similarly 90% of the respondents opined for ensuing greater responsibility on

the part of these consultants as being practiced in China. A significant 80 % people
who responded to the queries blamed the regulatory body officials for non-enforcement
of output delivered by consultants and this is attributed to the shortage of consultants as
 94

on date. Two-thirds of the opinion tilted towards the aspect of lack of expertise with the
consultants and lack of seriousness on their part.

Table 4.4 Questionnnaire Survey on Preparation of DPRs

Responses
Reasons for poor quality of DPRs
Yes No
Time devoted for preparation of DPR is quite less. 90% 10%
Do you recommend the Design Consultant’s life time
responsibility for their work built into contracts and their input
90% 10%
should continue until construction is complete as practiced in
China.
Poor enforcement from regulatory body since these lean
organizations have neither capacity nor desire to check the details
81% 19%
[or] may be due to acute shortage of Consultants thus
compromising on the quality of work
Lack of expertise with Consultants. 63% 37%
Lack of seriousness on the part of Consultants as evident from the
absence of Internal Quality Audit System before submitting their 63% 19%
reports.

The system of internal auditing of their reports before submission as mandatory

under ISO 9000 certification if implemented would definitely improve the quality of
DPRs. 18% respondents offered no comments on the lack of seriousness on the part of
Consultants Overall the situation is bad since many of the highway projects are the
victims of inordinate delays due to non-preparation of DPRs, thus many a time have
ended up as a non-starters. Suggestions for improvement measures to expedite DPRs
were segregated into optimistic and pessimistic rankings as shown at Table 4.5. The
respondents to questionnaire were asked to rate the improvement measure on 5 point
scale (5 for most effective to 1 as not workable). Except for induction of state of art
computational tools for improving the DPRs, there was no unanimity amongst the
respondents. Suggestion for involving engineering colleges by offering them
consultancy work for preparation of DPRs did not evoke much response. Filtering of
inefficient consultants was ranked at top, thus the need of the hour is for stricter
enforcement for qualitative reports. The rankings at Table 4.5 were tested for the extent
of agreement between the optimists and pessimists through Pearson’s correlation
 95

coefficient and Spearman rank correlation coefficient which is found to be 0.432 and
0.424 respectively using SPSS computer program.

Table 4.5 Suggestions for improvement of DPRs

Measures to expedite the preparation of Detailed Project Response received

Reports (DPRs) Lowest Highest

Induction of state of art software or computational tools. 3 5

Filtering of Consultants and weeding out incapable/ inefficient
1 5
ones.
Promotion of Consultancy firms by encouraging the interested
1 5
entrepreneurs step into consultancy
High Remuneration packages to Consultants as practised in
China where Design Engineers are paid higher than their
1 4
counterparts in construction or even higher than the average pay
in IT industry.

Inviting Foreign Consultants having requisite expertise 1 4

Involving Engineering Colleges by offering them consultancy
1 3
work
Response Scale : 5 - Most Effective; 4 - Quite Effective; 3 - Effective; 2 - Just Okay; 1 -
Not Workable.
Correlation between Lowest and Highest Responses
Pearson’s correlation coefficient = 0.432;
Spearman rank correlation coefficient = 0.424

The correlation is perfect and positive if r is equal to one and perfect negative in
case r = -1. If r = 0, then there is no correlation between the two variables and thus the
two variables are said to be independent [Arora and Arora 2003]. The values obtained
in this case tends to be around 0.4 showing little coherence amongst the respondents of
the questionnaire thus the solution lies in a mix of the improvement measures listed at
Table 4.5.

The future phases of NHDP will be implemented mainly through PPP route on
Design Build Finance and Operate (DBFO) basis [MORT&H 2000]. The role of
consultants in the implementation of such projects will become more crucial as they, in
addition to the task/ activities for implementation of traditional type of projects, would
 96

be expected to act as independent bodies and as an intermediary between the

government and the entrepreneurs. Aspects like assessment of various risks and
strategy to apportion the risks between various stake holders would require skills in
multidiscipline - engineering, finance, legal, social and environment on the part of the
consultancy organizations. Techniques for more realistic estimation of costs, O&M
expenses and revenues (traffic volume and toll rates) would need to be refined.
Independent engineering experts are also needed by the lenders and financial
institutions. Florida Department of Transportation (1996) Report No. 95-30 identified
certain strategies for minimizing delays as shown below :
a) Develop goals before planning start to minimize delays.
b) Design plans should be reviewed carefully when there are increasing use of
consultants.
c) Review design related problems from past projects.
d) Conduct additional preliminary research and investigations on-site before
bidding.
e) Minimize construction conflict with involved parties by creating better
communication and coordination.
f) Develop innovative contracting methods.
g) Improve quality of design plans.
h) Make use of experienced staff and consultants.
i) Emphasize on meeting project completion date.
j) Perform constructability reviews that can examine whether projects can be built
as designed.

A system of internal quality audit by the consulting companies should be

considered as per the recommendations of the report so as to ensure that the project
delivered by their project unit has been test checked before it is passed on to the client.
A regular interaction and more effective monitoring of the task by the client alone will,
however, help in improving the performance of the consultants. A system of Quality
Assurance and Quality Audit of consultant's work should be introduced. There is also a
need for instituting a system of grading the consulting firms in terms of size of project
that they can handle and some system of keeping a track record of the performance of
 97

firms on various projects. While awarding consulting projects to consultants, their

existing work load in relation to their capacity is to be kept in view. Entrepreneurship
development programmes in engineering institutions can be helpful, not only in solving
the problem of unemployment, but also for sustainable development of small and
medium enterprises (SMEs) in India [Sanjeev Dahiya 2007].

Another novel idea for expediting preparation of DPRs is through ‘Revolving

Fund’ coined by Hon’ble Finance Minister of India in his budget report of 2007-08
under Public Private Partnership and Viability Gap Funding which works as follows :
Revolving fund with a corpus of ` 100 crore to be set up to quicken project preparation;
fund to contribute up to 75% of preparatory expenditure in the form of interest free loan
to be recovered from the successful bidder [BE 2007-08].

4.2.4 Financing Mechanism of NHDP

Historically, investments in infrastructure, particularly in the highways, were

being made by the Government mainly because of the large volume of resources
required, long gestation period, uncertain return and associated externalities [DOEA
2009]. The galloping resource requirements and the concern for managerial efficiency
and consumer responsiveness in recent times have led to an active involvement by the
private sector. Delivery of efficient services to users at affordable prices has
increasingly led to private participation in infrastructure sectors around the world. This
participation may be in the form of service contracts, ownership of assets, or long term
concessions for the right to provide services [Anupam Rastogi 2006]. Public Private
Partnership (PPP) project means a project based on a contract or concession agreement
between a government or statutory entity on the one side and a private sector company
on the other side for delivering an infrastructure service on payment of user charges
[Asian Development Bank 2006].

National Highways Act 1956 was amended in 1995 to permit private sector
participation and with the passage of this amendment, Government of India can enter
into agreement with any person for development and maintenance of NHs, for
collection and retention of user fee (toll) and to regulate and control traffic as per Motor
Vehicle Act 1988. Implementation agencies should be given adequate funds and
 98

decision-making authority so that they can deliver their services in an efficient manner
[Asian Development Bank 2001]. The National Highways Authority of India (NHAI)
Act, which was enacted by the Parliament in 1988, provided for the setting up of a
central authority for the development, maintenance and management of national
highways vested to it. The role of NHAI is that of facilitator for preparation of Detailed
Project Reports (DPRs) thus making information available to bidders culminating in
conclusion of contracts; regulator in setting the terms and conditions in Construction
Contracts, legal bonding with Concessionaires in BOT contracts through Model
Concession Agreements (MCA); monitor for controlling the activities of contractors
and concessionaires during construction as well as operations and maintenance (O&M)
through project management consultants (PMCs); and financier in arranging funds for
construction activities through cess, borrowings, PPP mode etc. The funding of NHDP
is given at Table 4.6 and it may be seen that initial phases of NHDP was partly
financed from funding agencies such as World Bank, Asian Development Bank and
Japanese Bank JBIC to the extent of ` 200 billion. NHAI has also invested about ` 300
billion mostly on EPC projects.

Table 4.6 Source of Funding for NHDP works

SOURCE
Source of Phase III Phase IV Phase
OF Phase I Phase II Phase V Total
Funding II III VII V
FUNDING
Length 845 1637 2482
ADB (Km)
(6.80%) Cost (` 20.01 97.00 117.01
billion)
Length 1320 487 1807
WB (Km)
(4.95%) Cost (` 60.08 28.16 88.24
billion)
Length 204 204
JBIC (Km)
(0.55 %) Cost (` 6.73 6.73
billion)
Length 492 4 496
MORT&H (Km)
(1.36 %) Cost (` 29.52 2.10 31.62
billion)
Length 3206 2088 14 5308
NHAI
(Km)
(14.54 %)
Cost (` 141.31 176.87 1.10 319.28
 99

billion)
Length 90 90
MSRDC (Km)
(0.25 %) Cost (` 5.50 5.50
billion)
Length 454 1279 11445 2549 6775 41 22543
TOLL (Km)
(61.78 %) Cost (` 35.98 104.15 689.33 187.42 364.28 23.35 1404.51
billion)
Length 475 1029 1518 3022
ANNUITY (Km)
(8.28 %) Cost (` 23.53 139.12 95.54 258.19
billion)
Length 435 435
SPV (Km)
(1.19 %) Cost (` 32.48 32.48
billion)
Length 7523 6625 12978 2549 6775 41 36491
(Km)
TOTAL
Cost (`` 325.65 547.42 785.97 187.42 364.28 23.35 2234.09
billion)

Various sources of financing of NHDP and their relative merits and demerits
have been elaborated at Appendix 8. Certain problems related to financial management
of the highway program leading to time and cost overruns are discussed as under.

4.2.4.1 Excessive Dependence on BOT

In the initial phases, much of the success on NHDP works under Phase I and II
owes to BOQ/EPC mode and very minimal BOT contracts were in place. For instance
as may be seen from Table 4.7, out of 5846 km in the case of GQ, BOT toll component
was mere 373 km and another 382 km through annuity model, thus total BOT mode is
less than 13%. Even in the case of NSEW corridor, toll roads were only 10%. In case of
BOT mode, the private sector meets the upfront cost of construction as well as the
expenditure on annual maintenance. The entire cost along with the interest is to be
recovered from user fee collections during the concession period thus taking upon itself
the entire risk. However capital grant up to a maximum of 40% is to be provided by
NHAI as per the risk sharing concept envisaged in Model Concession Agreement
(MCA). The less attractive road stretches were to be executed through Annuity model
 100

wherein the concessionaire invests on construction and maintenance (no capital grants
allowed) and recovers the entire investment through pre-determined annuity payments
by the Highway Authority. BOT mode for development of highways is given in detail
at Appendix 9. Incentives such as 10 year corporate tax holiday and 30% relief for next
5 years, extension of concession period up to 30 years, duty free import of specified
modern high capacity equipment for highway construction etc were allowed to boost
public private partnership in highway construction.

Table 4.7 BOT Component in initial Phases of NHDP (As on Jan 2011)
Total BOT (Toll) BOT (Annuity)
NHDP Length Length Cost Length Cost
Component (Km) (km) (%) ( ` billion) (km) (%) ( ` billion)
GQ 5846 373.4 6.4 26.79 382.57 6.5 19.79
Port 380 80.7 21 9.18 93 24.5 3.75
Total 6226 454.1 7.3 35.97 475.6 7.6 2354
NSEW 7300 787.44 10.8 68.49 1029 14 13.92
Others 1383 205.22 14.8 12.60
Total 8683 992.66 11.4 81.09 1029 14 13.92

In the midst of highway program, Government of India has revised its policy
stating that all projects are to be first bid out as BOT (Toll) and on failure are to be then
offered under BOT (Annuity) and if this also fails, then they are to be taken under EPC
after taking specific approval from Cabinet Committee for Economic Affairs (CCEA).
P. Chidambaram, former Union Finance Minister declared on May 21, 2006 stating that
"the time has come to make the PPP model a success and, for that, a well-designed
framework of policies is needed. We cannot have policy changing with every change in
administration. Investors will only come if there is an assurance of transparency,'' he
said. Noting that a standard of services would have to be maintained for the PPP
model's success, Mr. Chidambaram said : "From now on, all projects under the
National Highway Development Programme would be in the PPP mode. The works
contract model will be adopted only in exceptional circumstances.” The works plan
envisaged by BK Chaturvedi Committee constituted for restructuring of NHDP as
 101

shown at Table 4.8 also reflected the underlying principle, thus BOT component was
aimed at a staggering 90% which is not practical.

Table 4.8 Progress on Works Plan evolved by BK Chaturvedi Committee on

restructuring of NHDP
Awarded upto
Road Length planned to be awarded during the Year
NHDP Phase 31.01.2011
2009-10 2010-11 2011-12 2012-13 2013-14 Total Length Cost
BOT (Toll) : 20706 kms (i.e., 56 %) (km) (`
billion)
III (4 lane) 4373 4373 6625 540.09
II (4 lane) 55 55
V (6 lane) 2403 1200 - - 1477 5080 2300 213.90
VI (expressways) 436 604 1040
III (2 lane paved shoulders 1977 1977
IV (2 lane) 4086 3075 339 7500 589 16.39
VII (4 lane) 681 681 41 23.35
BOT (Annuity) : 13014 kms (i.e., 35 %)
III (4 lane) 524 524 740 45.59
II (4 lane) 380 380
II (J & K) 239 239
III (2 lane paved 1477 1477
shoulders)
IV (2 lane) 4645 4000 1355 10000 176 24.98
SARDP-NE (4 lane) 394 394 111 7.62
EPC : 3330 kms (i.e., 9 %)
SARDP-NE (4 lane) 330 330
IV (2 lane) 1161 1000 339 2500
III (2 lane with paved 500 500
shoulders)

Total 12652 11092 9192 2637 1477 37050

Note : As on 31 Mar 2011, against a total length of 12,109 km under Phase III connecting all state
capitals & centres of economic importance not covered under Phase I & II, only 2242 km has been
four laned and work is under progress in 5769 km leaving a sizeable 4098 km (33%) yet to be acted
upon. In the case of Phase V, a meager 582 km is completed and work under progress in another
1830 km vis-à-vis total length of 6500 km.

Realising the ground reality, Government of India has reversed its earlier stand
on BOT to EPC as shown in the news clipping of September 2012 reproduced below.
 102

Ideally BOT projects can be kept at 50 to 60 % going by the past experience in

GQ and NSEW corridor as shown at Table 4.7. Further barring NHDP Phase III, toll
and annuity component is not encouraging as evident from the statistics reproduced at
Table 4.9.

Table 4.9 Toll and Annuity projects from Phase III onwards during 2007 to 2011

Phase Toll Projects Annuity Projects

Planned Achieved Planned Achieved
km km % km km %
III 6350 6625 104 2001 740 37
IV 7500 589 7.8 10000 176 1.7
V 5080 2300 45 - - -
VI 1040 - - - - -
VII 681 41 6 - - -
SARDP-NE - - - 394 111 28
Total 20706 9555 46 13014 1027 7.8
 103

Only 45 % success rate achieved even on the most attractive six laning of GQ
stretches under Phase V. The poor response from the concessionaires owes to the
prevailing sluggish economic scenario and saturation amongst the construction firms in
view of the huge infrastructure works going on in the country. In a Questionnaire
surveys carried out on selected Grade G7 Malaysian contractors registered under the
Malaysian Construction Industry Development Board Malaysia who had working
experience in India, for a query on ‘What type of procurement system did they use for
the construction projects’, the reply is as follows. Despite various considerations given
to BFOT (Build, Finance, Operate and Transfer) contracts, seventy one percent (71%)
of successful Malaysian contractors were keen to be involved in Lump Sum using BQ
(Bills of Quantities) or Drawing and Specification contracts. Only twenty-nine percent
(29%) of the respondents were involved in BFOT projects. For the unsuccessful
contractors, hundred percent (100%) of the respondents were involved in the Lump
Sum contracts. The reason behind the responses is that BFOT contracts involve higher
financial capabilities and longer time to recoup profits. Lump Sum contracts usually
provide clear cut basis for pricing and claims and require only several years of
involvement [Nur Aishah Mohd Hamdan 2008].

4.2.4.2 Galloping Fund Requirement

The fund requirement kept on escalating from ` 580 billion for GQ/NSEW
corridor to ` 1.6 trillion for all the 7 phases in the year 2004. The same was further
revised to ` 2.2 trillion till reaching a galloping sum of over ` 9 trillion (2009 prices) as
shown at Table 4.10. The sources of financing, be it through cess or budgetary support
has reached a saturation point and moreover loan and borrowings bring in huge
liabilities in the form of debt servicing and repayment. Market borrowings would have
to be raised against suitable forms of support or back-stopping by the Finance Ministry.
This may include a commitment that cess revenues at a pre-determined level would be
made available to NHAI and may be suitably assigned for debt service [CoI 2006].
NHAI has recently introduced 3 year investment bond at 6% interest per annum
exempted from TDS in the denomination of ` 10,000. This bond has been rated as
AAA Stable by CRISIL and an upper ceiling limit of ` 190 billion has been fixed by
the Government for raising funds through the NHAI investment bond.
 104

Table 4.10 Fund Requirement by BK Chaturvedi Committee on restructuring of NHDP

Estimated Expenditure Source of Funding
( ` billion) As % ( ` billion) As %
Project 3750 42% Cess Funds 4007 38.8%
Construction
Annuity 2300 25% Grants and Loans 108.50 1%
Payments
Repayment of 2100 23% Negative Grant 36.50 0.4%
Borrowings
Interest on 850 10% Toll Revenue Net 1304.50 12.6%
Borrowings surplus
Share of Private 2348 23%
Sector
Borrowings 2132 20%
Additional 436.50 4%
Budgetary Support
Budgetary Support 15.50 0.2%
Total 9000 100% Total 10388 100%

From Phase III onwards, emphasis has been on BOT projects as Government
has made it clear that any further investment in the highway sector except for a small
portion has to be from private participation. This is partly responsible for slow down in
awarding of project. BOT projects concluded so far amounts to roughly ` 1000 billion
against requirement of about ` 2500 billion, thus the share of private sector and toll
revenues is purely dependent on the response from concessionaires and general
economic scenario respectively thus filled with some sort of uncertainty. Government
has to seriously consider the accessibility of pension, provident and insurance funds for
tackling the money crunch for infrastructure development. In the event of no substantial
increases in cess revenues and not so encouraging toll projects in the future, the only
available option left to Government is to go for Annuity and EPC models which
increase the financial liability on the government thus the necessity arises for
generating funds for road development. Certain innovative fund mobilisation schemes
such as beneficiary participation, e-auctioning etc was advocated by the author in his
paper titled ‘Sound Financial Management and Reliable Sources of Financing – Key
Attributes for timely completion of NHDP’ presented at International Transportation
Economic Development Conference on 03rd May 2011 in USA and the same have been
reproduced at Table 4.11.
 105

Table 4.11 Fund Mobilisation Schemes

Beneficiary Participation

Working Group on Roads for 11th Five Year Plan (2007-2012) as constituted by
Planning Commission (Transport Division) in their report (Apr 2007) has suggested
that some funds can be tapped from beneficiaries for projects linking Special Economic
Zones (SEZs), satellite towns, ports, power plants, steel plants and other industries.

Corpus Fund

The fund generated from development of land adjoining to highways on the

pattern of disposal of prime railway land figured in rail budget and ongoing six lane
highway from Greater Noida to Agra developed by Jaypee’s Yamuna Expressway
Authority (YEA) can be earmarked for road construction where ever BOT (Toll)
mechanism is not feasible. The huge appreciation in land prices can be made out from
the fact that the land was acquired at ` 700 per sq.m whereas YEA is venturing
residential plots adjacent to expressway @ ` 4750/sq.m i.e., almost 500% ofcourse
after incurring some incidental expenditure on internal roads and drainage.

Electronic Auctioning for awarding Projects

In telecom sector, Government of India has raised ` 1.05 trillion from 3G and
broad band auctions against initial expectations of ` 350 billion. The project with the
lowest internal rate of return (IRR) would be the least expensive because of the low
margin demanded by the developer. In closed bidding system, bidders make blind bids
and this system is considered non-transparent and inefficient as no real price discovery
takes place in the absence of none of bidders knowing the benchmarks [Chowdhary,
2004]. Auction method can allow not just private sector to make an informed bid but
also allow the government to garner more revenues and the same can be utilized for
funding of NHDP. Auctioning lowers entry barriers and brings increased competition
[McMillan, 1994]. Readers may refer to the research scholar’s paper ‘E-Auctioning for
Awarding Highway Projects : An Optimal Methodology for Reaping Maximum
Revenues’ published in NICMAR Journal of Construction Management, ISSN No :
0970-3675, Vol. XXVII, No.I, pp.27-35 for details on auctioning procedure based on
multiple clock rounds.
 106

Foreign Direct Investment (FDI)

No prior Government approval is required for road sector under automatic route
allowing 100% FDI. Government of India has mooted proposals mega highways of
over 500 km, involving contracts worth ` 40 to 50 billion and a concession period
within a 30-50 year range. Mega road projects demand huge investments, high
experience, latest technologies and innovative approach. All these factors have
definitely created a huge opportunity for foreign contractors and investors to enter the
lucrative Indian highways sector, which in turn will spur infrastructure growth in the
country [Jeeta Bandopadhyay 2009]. Moreover the government is insisting that foreign
players will have to engage Indian firms for the projects has given the sector an
additional boost since it would pave way for key learning session for Indian Companies
under Joint Venture. Initially, the Ministry of Road Transport and Highways planned to
take up the six-laning of the 558 km Kishangarh-Udaipur-Ahmedabad section for an
estimated cost of ` 42.84 billion and a concession period of 30 to 50 years.

4.2.4.3 Packaging of Concession Agreements

A survey covering 12 states and 3 central agencies comprising 86 PPP projects

awarded in 5 infrastructure sectors has revealed that highway sector evoked massive
response in as many as 74% PPP projects when compared with other sectors as Urban
Development (13%), Ports (9%), Airports (2%) and Railways (2%) as shown at Fig 4.2.
Still the ambitions highway program under NHDP is lagging far behind completion
schedules. Infrastructure sector has been benefited by the introduction of Model
Concession Agreement (MCA), Request for Qualification (RFQ) and Request for
Proposal (RFP). However each sector under infrastructure has certain unique
requirements and hence certain flexibility has to be provided to seek amendment of
provisions which inhibit market acceptability.

Fig 4.2 PPP Projects in Infrastructure

(Source : Presentation on PPP in National Highways by Secretary MOSRT&H)
 107

Suggested modifications to Model Concession Agreements (MCA) under the

new dispensation scheme of NHAI for making PPP more attractive are given at Table
4.12.

Table 4.12 Modifications to Model Concession Agreements

Increase in equity grant (VGF) to 40% by merging equity and Operation and
Maintenance (O&M) grants.
Project wise Pre-Qualification (PQ) in Request for Qualification (RFQ) to be
substituted with annual/periodic PQ.
Threshold Technical Capability (TTC) of bidders to be reduced from twice the
estimated project cost to just estimated project cost i.e., brought down by 50%.
Applicability of Conflict of interest at RFP stage instead of RFQ since applicants would
be unaware of each other at RFQ stage. The identity of other bidders occurs only when
the list of qualified/eligible applicants is put up for information only after RFQ stage.
Relaxing the condition of forfeiture of entire Bid Security which is a significant amount
between 1 to 2 % of Total Project Cost (TPC) to mere 5% of value of Bid Security due
to non-responsiveness of tenderers.
Extension of concession period of Concessionaire in proportion to cost to be incurred
for capacity augmentation with an upper cap of 5 years instead of existing clause for
termination in case of exceeding of designed traffic.
Termination of Concession Agreement in case of exceeding of designed capacity if
concessionaire refuses for undertaking capacity augmentation through the construction
of additional lanes, of course with the payment of termination fees which was not
included in the original concession agreements.
Exit Policy for Developers for divesting their shares to O&M companies for further
maintenance which does not exist in the MCAs. By permitting such concessionaire
companies to divest in favour of O&M companies, a total capital of ` 160 billion will
be freed and made available to the developer construction companies. Hence a policy
initiative permitting such an action by concessionaires would enable faster rotation of
capital which will translate into a higher level of capital availability for concessionaire
companies.
 108

Constructive suggestions for granting more discretionary powers to Independent

Consultants/Engineers (IEs) for making them truly independent, finalization of new six
lane Manual by IRC, lowering down of minimum criteria for tenderers, reduction of
Earnest Money Deposit (EMD) during the tendering stage, PPP not to be made
mandatory and promotion of new technology/materials were received from certain
quarters. Salient features of Model Concession Agreements (MCA) to materialize PPP
scheme are furnished at Appendix 10.

4.3 Construction Phase

The project implementation has been faced with a number of constraints that
include poor performance of some contractors, capacity constraints, rains/floods, design
changes/critical structures delayed, and law and order problem in some states. The slow
progress of the NHDP Phase I attracted the attention of the Comptroller and Auditor
General (CAG). The CAG has criticized the NHAI, for completing only 1846 km
stretches, out of the target 6359 km of national highways by June 2004. In its report, it
is said that the overall performance of NHAI in terms of output in NHDP Phase I was
only 29 percent. The report has pointed out that there was no corporate plan to
implement such a large project. Deficient planning and inefficient contract management
by the design and project consultants contributed to the underperformance [CAG 2005].
Some of the problems faced by the highway projects are given at Table 4.13.

Table 4.13 Hurdles in the implementation of Highway Projects

Problem Details
Quarries Delayed permissions by the State Governments affected the work
in some cases by 6 to 9 months. Quarries were not given to
contractors in Bihar. They have to procure aggregate from private
suppliers.
Law and order Serious problems of law and order have affected the work in Bihar.
At few places, local people were obstructing work of construction,
making unreasonable demands for structures such as flyovers and
underpasses in many States
Court cases In one case, award of work was held up for 19 months.
 109

Removal of Removal of structures (including places of worship) and utilities

structures and has taken very long time in some states.
utilities
Tardy performance Bad performance by some Indian and foreign contractors.
by contractors
Approvals and Time taken in approval of design and grant of permission for
Permissions construction of Railway Overhead Bridges (ROBs) by Indian
Railways wherein 84 nos of ROBs to be constructed on GQ to
eliminate all rail level crossing.

4.3.1 Contractual Problems

Slow mobilization of resources and inadequate deployment of staff by the

contractor were stated to be reasons for poor performance of contracts in a substantial
number of projects (24% as shown at Table 4.1) which has led to their termination in
few cases. In many instances, even awarding of contracts was delayed and monitoring
agency National Highway Authority of India (NHAI) needs to owe responsibility on
this front. When the target for development of highways was set at a daily pace of 20
km which amounts to around 7000 km/year, the statistics on awarding of contracts as
depicted at Table 4.14 speaks the contrary.

Table 4.14 Awarding of Contracts During 2006 - 11

Year 2006-07 2007-08 2008-09 2009-10 2010-11

Length awarded 1740 1234 643 3360 5083

(km)

The problems expressed by many construction firms peculiar to the Indian

context are produced at Table 4.15. The feedback given by these firms throws light on
the prevailing scenario.
Table 4.15 Problems Expressed by Construction Firms
Applications for pre-qualification are evaluated and, generally, unsuccessful applicants
are not informed. The reasons for rejection in the prequalification stage, as a matter of
healthy practice should be intimated to the bidder so that he can make up his lacunae
 110

and prepare himself for the future works.

The dates for submission and opening of tenders should be strictly adhered so as to
maintain the sanctity of the tendering system.
The cost of bidding documents is high, ranging from ` 25,000 to 50,000 and the same
to be fixed at a reasonable price say ` 10,000.
On the GQ, where one expects standardised tender conditions, there was no uniformity
in all the projects. Modifications to FIDIC conditions should not be made. Where
considered essential, they should be discussed with the enlisted contractors in pre-bid
meeting.
The works are awarded to the responsive bidder without actually giving an
encumbrance-free site to the contractor. The contractor is also asked to refer to the
clause recently introduced in the bidding documents which makes him responsible for
liaising with the concerned authority for getting clearance of all utilities and the land.
“Clause 110 Encumbrances in Construction Area, including Trees and Utilities -
The contractor shall be responsible to coordinate with service provider / concerned
authorities for cutting of trees, shifting of utilities and removal of encroachments etc.
and making the site unencumbered from the project construction area required for
completion of work. This will include initial and frequent follow-up meetings / actions
/ discussions with each involved service provider / concerned authorities. The
contractor will not be entitled for any additional compensation for delay in cutting of
trees, shifting of utilities and removal of encroachments by the service provider /
concerned authorities. Payment for cutting of frees and shifting of utilities as required
by the concerned department shall be made by the Employer” [NHAI 2002].
Where a contractor completes the work before time, flimsy excuses are made by
pointing out minor defects, delaying the issue of completion certificates. Penalty
conditions are often imposed without making any provisions for rewarding the
contractor for early completion.
Clause 9A (Liquidated Damages) – In case of delay in completion of the contract,
liquidated damages (L.D) may be levied @ ½% of the contract price per week of delay,
subject to a maximum of 10% of the contract price.
Clause 9B (Incentives or Bonus) – For early completion of the contract before the
stipulated date of completion, an incentive amount at the rate of ½% of the contract
 111

price per week of early completion, subject to maximum of 5% of the contract price
may be paid to the contractor [MOS&PI 2005a].
Experienced and quality-conscious contractors base their price on the equipment
specified by the client, while in actual practice unscrupulous contractors use inferior
equipment during the execution of work which has an impact on the price of items of
work. Thus the quality-conscious contractor does not have a level playing field. The
contractors arguments for employing motor grader in lieu of Paver is purely guided by
the cost considerations whereas engineers are insisting for laying of Wet Mix Macadam
(WMM) by Pavers from the quality point of view.
Delay in payments is a concern across the board. MORT&H and NHAI are delaying
decisions and approvals on variation of items of work, increase in rates recommended
by lower levels, finalisation of extension of time, final bills, etc, causing delays of
payment to contractors.
On financial matters, there are numerous policy letters being issued by the finance and
administrative departments of the NHAI which are not part of the tender and contract
conditions. For example, there was a dichotomy noticed in the escalation clauses in
some of the contracts of the GQ. An administrative order was issued which stipulated
that the escalation be paid against bank guarantees.
Due to the sudden increase in the number of road projects, qualified persons are not
available in the country. Most companies are poaching on others' turf. The fallout is
that a large number of engineers are a floating population who change jobs frequently,
salary expectations have sky rocketed and the projects are suffering due to lack of
continuity.
It is now almost common practice to appoint a supervision consultant who, as per the
book, has all powers to decide contractual matters but in practice looks towards the
client for approval of any decision. Since, they are appointed by the client, they are
indebted to him. This delays decision-making and makes the contractor knock at two
doors instead of one.
Intended for the early redressal of disputes, in practice Dispute Resolution Board
(DRB) decisions are always challenged by the contractor or by the client (whosoever is
the loser!) making the clause useless.
Many clients provide interest-free mobilisation advance to the extent of 15 per cent of
 112

the contract value. Thus, the cunning bidder can secure the contract by quoting an
unrealistically low price. His intentions are to get the mobilisation advance on award of
the contract and then prolong execution of the work on one small pretext or the other
while earning interest on the non interest-bearing mobilisation advance.
Fear of reprisal from the Central Vigilance Commission (CVC) or Comptroller and
Auditor General (CAG) has caused even independent consultants to keep issues like
drawings, variations in orders, etc, on a complete freeze. They would rather sit on the
decision than run the risk of being questioned for having taken one.

Ninety billion rupees is locked up in disputes and arbitration [World Bank

2008]. The overall goal of a contract is to allocate work, allocate risk and eliminate
confusion [Somkiat Apipattanavis., et al 2010]. However, the employers
representatives are afraid of taking fair and positive decision due to fear of finance,
audit and vigilance or giving room for similar claim in other contracts for same reasons
or because the mistakes committed by the employer, knowingly or unknowingly, which
would reflect back on them. The safe course of action is hence taken to challenge in
arbitration, even if DRB members are of reputed nature. The arbitration itself has
become now-a-days like a court, taking lot of time for award with more legal people
coming and dragging the matter [MOST 1983]. Thus the main purpose of settling in
arbitration early through experts is lost. Again in arbitration, if the arbitrator holds the
decision like Dispute Board, again it is challenged in the court repeatedly up to
Supreme Court. Once a matter goes to court, it takes decades for decision, and the
relevance of quick decision making through arbitration is lost. Per change if any right
thinking person takes a decision in favour of DRB or Arbitrator’s award, his integrity is
doubted. A case study on the inordinate delay to the extent of 20 odd years in
completion of Passighat bridge in Arunachal Pradesh (India) due to the absence of
appropriate dispute resolution mechanism was brought out by the author in his paper
titled ‘Construction of Passighat Bridge in Arunachal Pradesh : A Case Study on
Well Sinking in Bouldery Strata’ published in Journal of Structural Engineering, Vol
39, No. 3, Aug-Sep 2012 pp 318-331. The chronological events documented in the
article substantiate the necessity of Dispute Resolution Boards.
 113

One of the respondents to the questionnaire has opined that NHAI should be
granted authority like say Delhi Metro Rail Corporation (DMRC) to resolve and close
out contractual issues in a time frame. Delhi Metro has been a perfect present day
example of inducing efficiency in the implementation of infrastructure projects.
Surprisingly, majority of the staff were drawn from the typical government department
Indian Railways, but these very same ordinary souls excelled at Delhi Metro and the
important reasons for this is astute leadership of Mr Sreedharan and the special powers
entrusted to them. Certain rules such as governmental contracting principles of
awarding the work to lowest bidder (L1) is done away with the Delhi Metro. For the
query regarding contracting principles of awarding the work to ‘L1’ alone, thus inferior
and overloaded contracting firms unable to undertake the gigantic workload of NHDP
was posed in the questionnaire probing the reasons for inordinate delays in the
implementation of projects as shown at Table 4.2, majority of the respondents voted in
favour of doing away with the ‘L1’ methodology atleast for important project like
NHDP. BK Chaturvedi Committee has suggested a pragmatic one time measure as
shown at Table 4.16 to the vexed issue of prolonged litigations.

Table 4.16 BK Chaturvedi Committee Suggestions for Dispute Resolution

(Source : www. nhai.org.in)
S Category Suggestion by BK Chaturvedi Committee on Dispute
No Resolution Mechanism
i) Claims < ` 100 Review on case to case basis by an Independent Expert
million or 5% of Group (IEG) with eminent representation viz., retired
contract amount Deputy Comptroller and Auditor General, a former
which ever is lower Vigilance Commissioner and a retired Senior Officer of
the Law Ministry besides a technical expert. The IEG’s
opinion may be sought by the variations committee in
all cases where the tribunal awards have already been
published and appeals are pending in various courts, and
on selective basis in respect of cases pending decision
by Arbitral Tribunals (AT). In particular, where the
decisions have been similar and unanimous both in the
DRB and AT stages, the appeals pending in the various
Courts may invariably be withdrawn.
 114

ii) Claims between ` In general, award of arbitral tribunal may be accepted

100 million to ` 1 particularly in cases where the unanimous decision at
billion DRB level is upheld by the tribunal.
iii) Claims > NHAI to carefully consider the award of tribunal before
` 1 billion challenging in the court. NHAI may take up with the
arbitral tribunal/court for early hearing and disposal of
all pending cases. These measures would enable
significant savings in interest payment. In view of the
long time taken by the tribunals to decide (average 2 to
3 years after 70 - 80 sittings), fast tracking and early
disposal of decisions by arbitral tribunals may be
rewarded by way of a flat fee to the tribunal members.

To a query raised in the questionnaire survey on whether Arbitrator’s award be

made final and binding on both the parties without recourse to court of law, 36 % of the
respondents have affirmed the suggestion whereas 27% did not support the idea and
remaining 37% remained indecisive. Among the most important causes found are cash
flow problems and financial difficulties by the contractor, difficulties in obtaining
permits, and the requirement to select the lowest bidder without regard to pre-
qualifications. The recent example of Delhi Metro Rail Corporation (DMRC) wherein
the system of L1 was given a good-bye for selecting the contractors and is stated to be a
significant factor for timely completion of this prestigious project. This can be
implemented only if we can pose trust in the officers deployed for the purpose and the
officer has to be the one with an exceptional integrity as happened to be Mr E
Sreedhran, ex-Chairperson DMRC. As regards to prequalification of contractors, a free
hand was given to DMRC unlike in other departments where past performance is the
sole criteria or predominant factor. This has been validated in one of the surveys carried
out by Hemanta Doloi, KC Iyer and Anil Sawhney, reproduced as under :
While planning and control capability has been found to be the greatest influencing
factor for contractors’ success on project, soundness of business and workforce was
found to have positive influence in developing planning and controlling competency in
the contractor. While contractors’ quality performance was found to have moderate
 115

influence on project success, past performance was found to have least influence on
contractors’ ability to succeed in subsequent projects [Hemanta Doloi et al., 2010].

4.3.2 Capacity Constraints

Going by the World Bank Report on India’s Road Construction Industry :

Capacity Issues, Constraints and Recommendations (Oct 2009), Indian road
construction sector is plagued by poor planning and execution, corruption, and huge
time and cost overruns. When the outer limit of extension for contracts in UK is 25%, it
is as high as 70% in India. About 40% of road contracts have cost overrun of 25 to 50%
and about 90 billion rupees is locked up in disputes and arbitration. Land Acquisition is
another big challenge, with most tracts of land in India lacking clear title deeds and
growing opposition from farmers against use of land for industrial purposes. Another
major issue is funding wherein India needs ` 3500 billion for building roads over next
three years, and government is expecting atleast 50% from Foreign Direct Investment
(FDI), thus heavy dependence on foreign investment. Commenting on the shortage of
manpower, the report states that India has 110,000 highway engineers compared to
more than 500,000 in China during their peak highway program i.e., 1989-97. There is
an acute shortage of qualified and experienced manpower due to proliferation of major
infrastructure projects. The contract stipulates minimum qualifications and experience
for different posts in the contractors' site organization.

According to Colonel Vivek Bopiah (Retd), Executive Director (P),

Bhagheeratha Engineering Ltd, due to the sudden increase in the number of road
projects, qualified persons are not available in India. Most companies are poaching on
others' turf. The fallout is that a large number of engineers are a floating population
who change jobs frequently, salary expectations have sky rocketed and the projects are
suffering due to lack of continuity. It is also difficult to get all contractors to adopt self-
disciplinary measures. As per Mr. Mathew, a senior executive of another construction
giant operating numerous projects of NHDP, contractors themselves should refrain
from poaching qualified and experienced personnel from each other. Bopiah opines that
NHAI must reduce the experience criterion to widen the recruitment base. One to three
years relevant experience (depending on the post) is more than adequate for any
individual to be able to measure up provided he has the total minimum experience,
 116

even if in other fields. When a new appointee is being inducted into a project, NHAI
should insist on the company producing a No Objection Certificate (NOC) from the
previous employer of the individual before the approval process is set in motion. "The
construction industry should meet and evolve a strategy to curb this menace," is
Patwardhan's take on the subject who happens to be Managing Director of Madhucon
Projects Ltd. The author in his paper ‘Capacity Constraints on progressing of National
Highway projects in India’ published in Prabandhan Journal of Management (Aug
2011) has introduced certain strategies for overcoming the capacity constraints as
reproduced below.

4.3.2.1 Strategies for Manpower Deficiencies

Strategies for minimizing construction delays may be categorized as low-effort

or high-effort. Low effort strategies require little capital expenditure and include
modified sequencing of activities, systemization with forms, or establishment of
procedures. High effort strategies may involve providing a new service, upgrading an
existing facility, or implementing a new policy. These require significant planning and
expenditure of capital [Connor and Wahba 1987]. Report of the MOSRT&H Working
Group on Roads (2007-2012) for 11th Five Year Plan (Apr 2007) has come out with
praiseworthy suggestions as reproduced below :
‘The State PWDs are responsible for policy, planning, design, construction and
maintenance of the State Highways and Major District Roads. They also execute works
on National Highways on agency basis. Basically, these organizations are performing
extremely vital role in provision of road infrastructure on the ground. However, they
need to be reoriented to the needs of current emphasis on private sector participation
and implementation of large scale projects for which assistance from the multilateral
funding agencies like the World Bank, the Asian Development Bank and the Japanese
Bank for International Cooperation is being sought. Presently 43,705 km of National
Highways are with the State PWDs. Though NHAI is being entrusted in phases with
the National Highways included in various phases of NHDP and other important
projects substantial lengths of National Highways will continue to remain with the
State PWDs. The PWDs are basically a strong institution and need to be preserved.
Account Codes and Works Manuals in the State PWDs are well developed. However,
 117

they need review in the light of procedural changes made at the Central level to keep up
with the latest technology. There should be proper synchronisation of the workings of
the procedures and systems at the Central and State levels. Many State PWDs have
established a separate organisation for implementation of the works on National
Highways. This needs to be done by all the State Governments. The State Governments
should develop these National Highway departments by posting the officers having
experience only in roads and bridge works. Due to present emphasis on private sector
participation for development and maintenance of National Highways systems and
procedures in the State PWDs are also to be amended. There is considerable stagnation
at the State level of the technical officers with adequate qualification and experiences.
The State Government may adopt a policy of allowing the engineers of the Public
Works Department to take up jobs with the contracting and consulting organisations
both in private and public sectors for a fixed tenure and retain lien with the parent
Department. This would help to the Government departments, individual engineers as
well as the contractor / consultancy organisations. Some State Governments like
Rajasthan and Andhra Pradesh are following this practice. There is urgent need for the
other State Government departments to adopt this policy. The Central Government may
amend their policy in this regard’.

As regards to upgradation of skills, National Academy of Construction (NAC)

at Hyderabad needs to be expanded with branches at all state capitals and important
cities to impart skills (both initial as well as on the job training) for various technicians
and tradesmen and also serving as employment exchanges helping technicians as well
as entrepreneurs being prospective employers. On the same lines, National Institute for
Training of Highway Engineers (NITHE) set up by the Government of India would
need to play a vital role in training of engineers and supervisory staff by entering into
MOUs with the international and national training/academic and research institutions to
provide the institutional support. NITHE should also come out with a comprehensive
booklet indicating the various areas of training for different levels of highway
engineers, duration and course contents. NITHE should also function as a repository of
documentation of all major projects for future lessons. Simultaneously all the
departments dealing with roads both in the Central and State Government should
support the NITHE by sending adequate number of persons for training and also in
 118

financial terms by paying annual contribution. This will help in augmenting the
activities of NITHE. Its charter should be further reactivated vigorously to extend its
services to interested entrepreneurs, consultants and construction firms.

In early 1960s the need for entrepreneurial development as an ingredient of

economic development was realized. It was considered essential to motivate and assist
prospective and potential entrepreneurs to set up their own ventures to contribute in
production, employment and tapping of unutilized resources. Studies have revealed
that, although industrial backwardness is due to infrastructural bottle necks, the real
cause is non-availability of dynamic and skilled entrepreneurs who could mobilize and
productively utilize the available resources. The task of entrepreneurship development
is being shared by several agencies and institutions among which banks are the most
important ones. The banks have their wide-spread branch network to reach out to all
categories of customers. In developing economies like India, an entrepreneur requires
financial input as well as non-financial inputs like scientific and technical knowledge
[Himendu P Mathur 1998]. Innovation is to be initiated by entrepreneurs by seizing
opportunities in changing situations by discovering how to synthesise opportunities in
the marketplace with the capabilities of the organisation and needs of stockholders
[Sanjeev Dahiya, et al., 2007]. India has a strong education base suited to
entrepreneurial activities and to pursue further the entrepreneurial approach to
economic growth, India must now provide opportunities for (i) education directly
specifically at developing entrepreneurial skills, (ii) financing of entrepreneurial efforts,
and (iii) networking among potential entrepreneurs and their experienced counterparts.
Obviously, the government can play a substantial role in helping to provide these types
of opportunities [Anil and Ronald 2005].

4.3.2.2 Solutions to tackle Scarcity of Materials

Absence of local quarries for stone/sand and shortage of constructional

materials such as cement and bitumen has figured prominently as a highly critical
constraint in view of increased construction activity in all the sectors. Nano Polymer
Base Stabilisation employed on NH1 Panipat-Jalandhar section from Km 96 to 387 in
the state of Haryana and Punjab as described at Appendix 11 provides an effective
solution. Polymer base stabilizer when blended with the soil subgrade enhances the soil
 119

strength by over 300 percent, thus pavement can be designed with reduced bituminous
and base courses. The trial stretch adopted at NH1 showed significant reduction in the
crust thickness by 40 to 50 % and totally eliminated the layer of dense bituminous
macadam as proclaimed by the manufacturer India Polyroads Pvt Ltd (IPPL) Gurgaon
(Haryana). Hence usage of new technology/materials such as nano polymers can reduce
the requirement of materials, thus reduced quarrying efforts and construction time. The
manufacturers also claim an overall savings of 12 % as shown at Appendix 12 by
partially compensating the extra expenditure on polymer solution through reduced crust
thickness and speedy completion. Addition of superplasticisers in cement concrete
apart from increased workability has a vast potential for reduced sections due to
enormous strength multiplication [Mishra, L.K 1997]. Utilisation of flyash in road
construction is another innovative alternative as elaborately dealt by Abhai Kr Verma
and Ashish Gupta in their paper ‘Study on the utilization of flyash’ presented at
Seminar Udaipur (India) and the relevant extract is reproduced as under :

Fly ash is a lightweight material, as compared to commonly used fill material (local
soils), therefore, causes lesser settlements. It is especially attractive for embankment
construction over weak subgrade such as alluvial clay or silt where excessive weight
could cause failure. Fly ash embankments can be compacted over a wide range of
moisture content, and therefore, results in less variation in density with changes in
moisture content. It is easy to handle and compact because the material is light and
there are no large lumps to be broken down and can be compacted using either
vibratory or static rollers. High permeability ensures free and efficient drainage. After
rainfall, water gets drained out freely ensuring better workability than soil. Work on fly
ash fills / embankments can be restarted within a few hours after rainfall, while in case
of soil it requires much longer period. Considerable low compressibility of flyash
results in negligible subsequent settlement within the fill. It further conserves good
earth; which is precious topsoil, thereby protecting the environment. Higher value of
California Bearing Ratio as compared to soil provides for a more efficient design of
road pavement. Pozzolanic hardening property imparts additional strength to the road
pavements/ embankments and decreases the post construction horizontal pressure on
retaining walls. Fly ash is amenable to stabilization with lime and cement and can
replace a part of cement and sand in concrete pavements thus making them more
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economical than roads constructed using conventional materials. Fly ash admixed
concrete can be prepared with zero slump making it amenable for use as roller
compacted concrete. Considering all these advantages, it is extremely essential to
promote use of fly ash for construction of roads and embankments.

4.3.2.3 Questionnaire Survey on Capacity Constraints

Capacity related problems prioritised by respondents from the questionnaire

survey carried out by the author are compiled at Table 4.17 which is self explanatory.

Table 4.17 Perception of Capacity Constraints by various Stakeholders

Capacity/Site Constraints Monitoring Consultants Construction
Agencies Firms
Shortage of construction goods viz., Critical Low Importance Critical
cement, bitumen, steel etc.
Deficiency of experienced engineers Critical High Highly Critical
and supervisors Importance
Nonavailability/shortage of tradesmen Critical Critical Highly Critical
as mason, welders, carpenters,
drivers, electrician
Absence of local sources for stone, Critical Critical Highly Critical
sand and water
Inclement weather or climatic Critical No Impact High Importance
conditions as rains, floods etc.
Security threat to personnel deployed High High High Importance
on construction sites Importance Importance
Resistance / disturbance from local High High Critical
populace Importance Importance
Inordinate delays in LA, utilities Highly Highly Critical Highly Critical
shifting, clearances and approvals Critical
Hindrance from existing traffic High Low Importance High Importance
Importance
Power cuts, nonavailability of Low Low Importance High Importance
equipment spares etc Importance
Delay in approved drawings, High High Critical
payments to contractors etc Importance Importance
Rivalry from competing firms No Impact Low Importance High Importance
Ranking Scale (in descending order) : Highly Critical, Critical, High Importance, Low
Importance and No Impact

Deficiency of experienced engineers and supervisors, non availability and/or

shortage of tradesmen as mason, welders, carpenters, drivers, electrician and absence of
local sources for stone, sand and water were stated to be highly critical by construction
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firms and the same were acknowledged as critical by monitoring agencies and
consultants too. Shortage of construction goods such as cement, bitumen, steel etc was
rated critical by monitoring agencies as well as construction firms. Security threat to
personnel deployed on construction sites and resistance and/or disturbance from the
local populace are of high importance and needs to be dealt locally on a case to case
basis. Surprisingly, power cuts were not given any importance, probably due to their
own captive arrangements such as generator sets etc. Absence of local quarries for
stone and sand was rated highly critical by construction firms and some contractors are
complaining that they are compelled to go for their own arrangement for quarrying and
mining on private lands by shelling huge money, thus possibility of time and cost
overruns.

4.3.3 Rains/Floods

The peculiarity of any construction project lies in its exposure to natural

calamities as rains, snow, scorching heat, torrential winds & dust storms etc unlike
manufacturing in covered factories. A sizeable number of projects were reported to be
delayed viz., 24/224 (10.71%), a respectable double digit percentage. The nature of
natural calamities & its intensity though beyond the control of project authorities but
can be predicted to some extent and preparedness in this direction can bring down the
delays. The North-Eastern (NE) states of our country experience heavy rains for about
6 months in a year commencing from March itself while the rest of the country wait for
monsoons somewhere in June. Snow fall & cold climate terribly affects all construction
works due to its impact on cement setting as experienced in J&K, Arunachal &
Himachal Pradesh.

The 2008 floods in Orissa and Bihar have taken a heavy toll of delays in NHDP
projects in these states. The western front is also equally affected going by the spate of
damages occurred on the Vadodara-Surat section of NH-8. Major repair work has been
ordered by NHAI on NH-8. Meanwhile, the Ahmedabad-Vadodara Expressway has
reported an increase in traffic with commuters avoiding the rain-hit NH-8 between the
two towns. In September 2008, even as the Bihar floods had not receded completely,
the north-eastern state of Assam faced floods with rising waters from the Brahmaputra
River. Kaziranga National Park, which has the highest density of rhinos in the world,
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was 90% submerged in water. The flood situation has affected estimated 2.1 million
people causing 24 deaths. Worst affected districts are Dhubri, Jorhat, Kamrup,
Lakhimpur, Dhemaji and Morigaon thus badly affecting the East – West corridor
project. The following pan-Indian data at Table 4.18 pertaining to NHDP works
affected by rains & floods in the year 2008 alone illustrates the wide spread nature of
the natural fury on the developmental works.

Table 4.18 NHDP works affected by 2008 rains/floods

S/No State Affected NHs Remarks
i) Assam 31C, 37 and 54 Floods
ii) Bihar 28 and 57 Kosi river Breach
iii) Gujarat 8A, 14 and 15 Incessant rains
iv) Tamil Nadu 4, 5 and 45 Torrential Rains
v) West Bengal 31 Rains & Floods

4.3.3.1 Solution for Overcoming Natural Calamities

Natural Calamities such as rains & floods cannot be eliminated and project
authorities have neither control over such furies of nature. Even they cannot be
predicted accurately thus a situation of uncertainty prevails. The only solution available
to the construction engineer lies in proper planning of works duly accounting for
unpredictable weather and strict monitoring of the worked out plans subjected to
various ‘ifs & buts’ of the unknown future. An exclusive case study on road widening
works under Prime Minister’s Package to J&K covering various management
techniques and their applications as advocated by the author in his paper ‘Planning and
Monitoring of Road Construction Projects in Jammu and Kashmir’ published in
NICMAR Journal (July 2010). A great emphasis has been made on the basics of project
management techniques and seriousness with which project managers have to put these
techniques into practice inorder to attain the broader goal of timely completion of
projects within the budgeted cost avoiding time & cost over-runs.

Project management employed in the construction circles though relatively new

dating back to early ‘90s, is flooded with lots of techniques mainly borrowed from the
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industrial set up. The learned readers are well aware of the peculiar unorganized
scenario of the construction industry exposed to the vagaries of climate unlike
controlled manufacturing in factories thus the implications of employing such tested
techniques in the construction arena. Moreover Project Management is confined to just
one aspect of time planning through Critical Path Method (CPM) and Bar Charts thus
totally ignoring the related cost and resource factors. The lack of enthusiasm in their
applications amongst the practitioners is mainly attributed to non-availability of
sophisticated tools which have the potential of integrating the management techniques
incorporating all the related criteria for successful completion of any project. The
advent of computer software packages such as MS Project and Primavera facilitating
planning, scheduling and monitoring techniques with inbuilt resource levelling and cost
control mechanisms have brought in revolutionary changes in the mindset of managers,
who otherwise used to term these management tools as ‘mere theoretical’. A simple
Line of Balance (LOB) control chart is adequate for monitoring the construction of
protective/cross drainage structures as R/Wall, B/Wall, Culverts etc and Bar charts are
good enough to monitor each of those structures. Precedence Network Analysis (PNA)
depicting various activities on nodes of the network was employed for bridge
construction works showing the complex interdependencies, critical path and floats
available for each and every activity, so that project managers can exercise effective
control over the project. For works progressing on a continuous linear scale works as
pavement layers for sub-base, base courses and bituminous layers, Linear Programme
Chart (LPC) representing activity location, rate of work and time schedule can be
successfully employed for planning as well as its monitoring throughout the project
duration [Chitkara 2001].

Primarily the international standard software was used in the industry for
general administration and project management processes. Like MS Office for
administrative functions, MS Project and Primavera Project Planner are appropriate
tools for time and cost scheduling processes. Only 19 surveyed organizations (about
13%) utilized customized software for ‘Bill of Quantities (BOQ) preparation,
Comparative analysis of bids received, Tender preparation and Contract management
[V. Ahuja et al.. 2009]. Having realized the potential of these techniques, all
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government bodies are insisting on employing the same in all construction works
making them mandatory through the contract clauses. The engineering fraternity too
should welcome the same and adopt these techniques for ensuring better planning,
monitoring and execution of the works.

4.3.4 Design Changes/Critical Structures Delayed

In this era of rapid technological advancements, construction arena cannot

remain aloof from the latest developments. The overwhelming progress in the designs
as well as construction technology being adopted for various structures is evident from
the standing monuments of this country built in the recent past as Mumbai-Pune
Expressway, Konkan rail track with numerous impossible tunnels, Bandra/Worli Sea
Link road at Mumbai, cable stayed Rabindra Setu over Hoogly at Kolkata, Metro Rail
Project at Kolkata and Delhi etc. At a time when India was advancing in the pace of
construction technology with the mention of land mark projects stated above,
surprisingly NHDP has witnessed delays due to design changes to structures in 3 odd
cases, 9 cases of delays due to approval of Road Over Bridges (ROBs) and 6 cases of
critical structures completion as shown at Table 4.1

4.3.4.1 Need for Appropriate Design and Construction Methodology

Unfortunately, no enthusiasm is shown by the engineering fraternity for

innovative and new methodologies such as prestressed ground anchoring of earth
retaining structures and instead relying blindly on old conventional techniques as
gravity based masonry retaining structures or breast walls. No doubt these structures
have worked by and large but need not be a panacea for all situations. More over
technological advancements need not necessarily be a costly and scientific hi-fi thing,
but can be a simple and neglected approach like sand/soil-bags for embankment
construction.

Except for very primitive slab bridges, most masonry bridges have been arch
bridges. These arch bridges imply permanence and have a graceful appearance but at
the same time require unyielding abutments and piers. Stone masonry arch bridges are
by nature strong and require very little maintenance. Their inherent reserve strength is
evident from the many stone arch bridges existing in service, now carrying many times
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their originally designed load. Their main disadvantage and probably the reason for
discarding these durable arch bridges is the slow pace of construction. It takes time to
build them piece by piece. Each stone is required to be quarried, dressed and
individually matched with the surrounding stones. Hence in developed nations with
high labour costs, stone/brick arch bridges are not favored and developing countries
seem to follow suit by extensively going in for concrete girder bridges of various
configurations. Girder bridges of reinforced concrete will be highly uneconomical for
spans beyond 35 m whereas arch type can be used advantageously in the span range of
35 to 200 m. The most important advantage of these arch bridges are total elimination
of movable parts like bearings which require regular periodic maintenance and often
replacement after a very few years during the designed life of bridge which add to the
cost of the bridge. That’s the reason these arch bridges continue to be in service with no
maintenance at all well beyond their designed life that too under the increased traffic
intensity to the extent of 200 to 300 %. Coronation bridge near Siliguri with main span
of about 80 m can be taken as a classic example of majestic arch bridge which is in
totally sound condition without any repairs/maintenance even after a life of 80 years
since its commissioning in 1930. The research scholar’s paper titled ‘Back to Arches :
Increasing Incidences of Distress in Concrete Bridges & Renewed Interest on
Durable Arch Bridges’ published in Civil Engineering & Construction Review
(CE&CR), ISSN No : 0975-9034, Vol 24, No 12, pp 102-112 stressed the need for
adopting appropriate design and construction methodology for eliminating time
overruns.

The persisting problems often associated with the construction of well

foundations such as prolonged sinking period extending to numerous working seasons,
complicated and time consuming tilt and shift rectifications, complex and costly
pneumatic sinking if warranted by site conditions and huge requirement of construction
materials as steel, concrete etc force the designers to think seriously for an alternative
solution. The availability of sophisticated bore drilling machines capable of piercing
through even rocks has now made it possible to go in for drilled shafts. As compared to
well foundations which may take 3 months to even one year, each shaft can be drilled
and concreted in just 3 days. The author’s paper ‘Large Diameter Pile Foundations
for Cost Effective & Fast Track Construction’ published in the International Journal
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of Earth Sciences and Engineering, ISSN No : 0974-5904, Vol. 4, No.6 Spl, Oct, 2011,
pp. 780-784 has brought out a case study on Tidding bridge in Arunachal Pradesh
where the partially complete bridge was to be abandoned due to dangerous tilt to one of
the pier wells at 1 in 3 vertical slope. Appropriate structural design scheme at the initial
planning stage itself was advocated by the author in his review article titled
‘Economics of Alternative Structural Schemes of Prestressed Concrete Bridges’
published in the International Journal of Civil and Structural Engineering, ISSN No :
0976-4399, Vol.1, No.3, 2010, pp. 425-439 for eventually eliminating the delays.

4.3.4.2 Fast Track Construction

The normal process of construction scheduling involves the performance of a

series of discrete functions, one after the other, in a predetermined sequential order and
each activity is virtually completed before the next may be commenced. The Fast Track
construction concept is based on the premise that project duration can be compressed
by overlapping some of the functions i.e., concurrent activities as shown at Fig 4.3. The
biggest hurdle in the implementation of fast track construction lies in early engaging
the contractor but this is not feasible in Government departments in the absence of
finalized drawings and specifications, requisite government approvals and tender
documents which form the basis for any contractor to bid.

With the advent of BOT concept under public private partnership (PPP) being
implemented by National Highway Authority of India (NHAI), the Concessionaires are
free to carry out their own designs and construction, thus fast track construction can be
advantageously employed on all highway projects eliminating time and cost overruns.
For that matter, NHAI came into existence solely for executing the massive highway
development project NHDP on fast track basis. Prime Contractor is one who performs a
substantial part of the construction work himself and the balance, if any, by
subcontractors, while bearing full responsibility for the whole contract [SPD 2005].
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Negottation
Normal construction

Approvals
schedule

Bidding
Planning Design Construction

Govt

and
1 2 3

◊ ∆ ©

Fast track construction

Schedule
Planning Design

1 2 3

Bidding
and Negotition
◊ Govt Approvals Time saved

∆ Construction ©

Fast track construction schedule - With early foundation start

1 2 3

◊
Time saved

∆ ©

1 Schematic Design ◊ Contractors First involvment

2 Design Development ∆ Contract Award
3 Construction Phase © Completion of construction

Fig 4.3 Schematic Diagram of Fast Track Construction Concept

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As per FIDIC Conditions of Contract for Construction, the contractor shall not
subcontract the whole of the works [FIDIC 2006]. Whereas, NHAI in the true spirit of
fast track construction allows the Concessionaire a free hand as evident from the Clause
5.4 (a) (iv) of Model Concession Agreement for Annuity Based Projects as reproduced
below :

“The Concessionaire may undertake construction works by itself or through a

contractor possessing requisite technical, financial and managerial expertise/capability;
but in either case, the Concessionaire shall remain solely responsible to meet the
concession requirements” [NHAI 2001].

4.3.5 Deterioration of Law and Order

Discussion on development of roads in left wing extremism (LWE) area in 6th

Consultative Committee meeting was held at highest administrative echelons on 18th
February 2011 followed up with meeting of contractors and engineers working in LWE
area on 15th March 2011 signifies the importance attained to this factor particularly in
view of the majority of Phase III projects dispersed in the interior and troubled areas.
The spread of naxalism in as many as 72 districts spreading in nine major states often
referred as ‘red corridor’ is a matter of serious concern [Kritika Malhotra 2007].
Incidents of kidnapping of highway engineers seeking ransom and killings by insurgent
groups have generated a fear psychosis amongst the people involved in these highway
projects. Considerable magnitude of projects were reported to be delayed due to law
and order by PIUs (10% as shown at Table 4.1) and surprisingly this factor weighed
10.88 % in the questionnaire survey tabulations given at Table 4.2. There is no option
to fight this menace other than by beefing up the security apparatus by the respective
state governments and special efforts should be made by all the concerned parties to
expedite the projects in these trouble torn areas since any amount of delay would
burden the expenditure on the maintenance of law and order as well as heavy toll on the
precious lives of people working on the projects.

Central Industrial Security Force (CISF) may be roped in NHDP since CISF
services were only available to Government Organisations and PSUs in the past but by
amendment in CISF Act, the Government of India has now permitted CISF to offer
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Consultancy Services in the field of Security and Fire Protection to public as well as
private sector. NHAI may consider special incentives in the form of security cover
through CRPF/BSF armed battalions, increased viability gap funding on toll projects,
attractive annuity packages and if required to undertake these projects through EPC.
NHAI may explore the possibility of entrusting works to Border Roads Organisation
(BRO) which operates mostly in the insurgency prone areas of J&K and NE states and
is the largest employer in these remote border areas. It is not surprising to know that
even in the peak of insurgencies in the states like J&K, Nagaland, Assam, Manipur and
Mizoram when armed forces were being attacked recklessly, BRO was left relatively
untouched and this is due to goodwill generated by them through productive
employment. But for this livelihood, these local tribals could have easily taken to arms.
These local labourers, infact stood solidly behind BRO and prevented the assault from
ultras due to fear of losing their jobs in the case of BRO withdrawing from the area due
to militant threats.

4.4 Post Mortem Analysis

Infrastructure is an engine for economic development. It may be broadly defined

as a system of linkages that facilitate and enable the flow of goods and services. These
linkages include road, rail and airways, river systems, electric power systems, and all
the different types of communication and service lines. With enhanced requirements of
the economic development, investment in infrastructure is crucial to support a higher
level of industrial growth. On the path of development, India's immediate goal is to
achieve industrial growth of at least 10 per cent per annum and sustainable GDP growth
of at least 8 per cent per annum. Out of 31 thrust areas to be monitored by Prime
Minister, timely completion of the Golden Quadrilateral and North South East West
Corridor figures in that list thus highlighting the importance of National Highway
Development Project.

In this era of economic liberalisation, the importance of efficient transport

network increases further for raising productivity and enhancing competitive efficiency
of the economy in the world market. The road network lies at the base of
developmental process and play a key role in the national integration and socio-
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economic development of the country through connecting remote areas and creating
conducive environment for domestic and foreign investment. The present road policy in
India has two basic tenets, viz. accessibility and mobility. The accessibility objective is
to be achieved through improved rural roads network viz., Pradhan Mantri Gram Sadak
Yojana (PMGSY) to provide all weather road connectivity in rural areas. Mobility is to
be facilitated through improvement in capacity and strengthening of high-density
corridors. The National Highway Development Project (NHDP) is the main initiative in
this regard and it aims at four laning and six laning of Golden Quadrilateral and North
South East West corridor. Apart from focus on the improvement of low grade sections,
rehabilitation and reconstruction of weak bridges, construction of bypasses, emphasis
was also on improving the riding quality of the existing highways. Construction of
more transportation hubs and logistics SEZs is also being initiated to create more
common shared facilities for transportation. Lack of industry status makes it difficult
for transporters to raise capital and debt through organized banking and financial
channels. Uniform integrated tolling systems can be introduced where vehicles need to
only slow down rather than completely stop and wait in queues for collection of toll at
toll gates. At present, construction activities are administered through 32 laws, rules
and statutes. Besides, there is no singular nodal agency empowered by the government
to administer construction activities. Requirement of Unified Construction law is being
envisaged by many entrepreneurs so as to induce efficiency and create effectiveness.

4.4.1 Policy Decisions

Golden Quadrilateral which was commenced in 1998 for linking the four major
metropolitan cities initially slated for completion in December 2003, whereas the same
was 100% completed after 10 long years during May 2013. As regards to NSEW
Corridor, 86 % of 7000 km is four laned as on 31st May 2013 against its stipulated
completion in December 2009. A mere glance at the progress of various packages
under NHDP as given at Table 1.3 in chapter 1 illustrates the inordinate delays in the
ambitious highway programme taken up by Government of India and various policy
decisions responsible for the present state of affairs are discussed in the subsequent
paragraphs as under.
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4.4.1.1 Shifted Priorities from Highways to Rural Development

Because of the active interest of the Prime Minister and his key advisors in the
area of Information technology and Telecom, the policy was not allowed to fail
[Virmani 2004]. Hence for any policy to succeed, active support of the government is
the need of the hour. Change in the corridors of power at centre with focus on National
Rural Employment Guarantee program (NREGA) has put NHDP commenced by
previous National Democratic Alliance (NDA) government on a back seat. However
United Progressive Alliance (UPA) government on its reelection in 2009 has shown its
resolve to speed up the highway program.

4.4.1.2 Huge Increase in Scope Of Works

The Government of India instead of completing the ongoing projects has

expanded NHDP to seven phases with projected investment shooting up from 50 to 200
billion USD over the period 2005 - 2012. The highway program has become
unmanageable at times due to bowing down to pressures from local parliamentarians
for extending NHDP to their constituencies under Phase III not covered under GQ or
NSEW corridor. Pruning the highway program from time to time by prioritizing the
projects on the basis of feasibility and marketability with an eye on the mobilization of
the budget is the need of the hour. Recently Government has taken a pragmatic decision
to defer certain packages for double lane highways with paved shoulders under Phase
IV due to poor bidding response as well as resource crunch. The time delays are in turn
causing cost overruns due to general price inflation. Coupled with this frequent
changing of Chairman of NHAI had led to administrative paralysis affecting the
government flag ship programme NHDP. NHAI should be given greater authority in
terms of human resource management and financial autonomy and MORT&H should
be restructured to have a better management and repooling of the staff [Nand Sharma
2004]. Inter Ministerial Committee (IMC) deliberating on the task of restructuring of
NHAI concluded that ‘For all practical purposes and in line with NHAI’s
role/positioning, the Chairman and Members together function as the equivalent of a
Board of Directors in a company” [CoI 2008].
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4.4.1.3 Slow pace on Increased Involvement of Private Sector

With the rapid growth of the economy in recent years the importance and the
urgency of removing infrastructure constraints have increased. Traditionally, power,
railways, roads, ports, airports and telecommunications were the exclusive domain of
the government. Policy has changed gradually over the past two decades under the
pressure of rising gaps between demand and supply of infrastructure and deteriorating
quality of assets. Government has made an effort to facilitate the entry of private
enterprise into this sector through changes in the legal framework. A role for private
sector participation has also been facilitated by technological change that allow
unbundling of infrastructure, so that the public and the private sectors can take up the
components most suited to their capacities. Government continues to invest significant
sums in areas where private participation is minimal or not forthcoming. It will
continue to play a lead role in infrastructure development during the Eleventh Plan
[Economic Survey 2007-2008]. NHDP Phase III downwards, the highway projects are
being implemented on a ‘pay-as-you-use’ principle, they are usually constructed and
operated on commercial principles implying efficiency in execution and better level of
service to users. The concept of direct tolling, viewed mainly as a user charge was
initially implemented successfully mainly on bridges, bypass roads and on four lane
National Highways. The developer assumes the majority of the risk associated with
design, construction, maintenance, operation and financing of the road. To encourage
private sector participation, the Govt. has introduced annuity approach in which a fixed
annual payment is made to the entrepreneur. Due to limitation of the budgetary
resources, the role and participation of private sector are to be encouraged by and large
for the development of National Highways. In order to encourage participation of
private sector, the Department of Road Transport and Highways has laid down
comprehensive policy guidelines for private sector participation in the highway sector.
The private sector participation envisaged in Phase- II of NHDP has also been
increased. The Government has also announced several incentives such as tax
exemptions and duty-free import of road building equipments and machinery to
encourage private sector participation. Implementation of projects through construction
contracts is to be done in exceptional cases where private sector participation is not
possible at all. Preparatory work has begun in consultation with the Planning
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Commission for seeking the Government approvals for the enhanced scope of NHDP.
Following actions are recommended to expand the role of PPPs as the main basic
delivery mode at both the national, state and municipal levels.

a) Most countries engaged in broad based PPP program recognized the need to develop
a cross sectoral pool of expertise in a dedicated PPP unit. Creation of national level
PPP unit may be considered, that would perform the functions of information
dissemination and guidance so as to provide advisory to PPP programme. It is
recognized that such a unit has been created in Ministry of Finance and is in the process
of being created in NHAI. Such PPP unit should also be established at state levels for
guidance for developing roads in states and municipal level for PPP projects.

b) The existing ambiguities for tax treatment, licensing, imports, banking, audits
require critical re-look and substantial modifications so as to facilitate commercial
matter to provide encouragement for foreign investors.

c) There would be need to have a regulatory mechanism so as to standardise the

processes, thereby providing greater predictability and confidence to investors and for
protecting the interest of users.

d) For highway projects implemented through PPP, traffic is a critical and sensitive
issue. Therefore traffic studies and projection has to be studied and established as
accurately as possible so that investors are aware of the risk involved. Possibility of
involving insurance companies for providing suitable insurance cover to
concessionaires to mitigate risks (traffic risks etc.) may be explored.

e) The project cost estimation should be as realistic as possible and should be based on
actual market forces.

f) The core technical requirements, standards and specifications, safety requirements,

etc., should be clearly spelt out in the concession agreements so as to leave no scope for
different interpretation.

g) Land acquisition and utility removal is another important area which can adversely
impact the implementation process of PPPs. Therefore, the projects on PPP are to be
identified and land acquisition process started quite early so that most of the land is
available at appointed date.
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h) BOT (Annuity) and shadow tolling could be better options for medium/ low traffic
density corridors and should preferably be adopted.

i) While formulating the PPP proposals for highway projects, the scope for innovations
and using latest technologies and materials may be suitably incorporated.

Encouragement to private players by way of tax or other benefits such as cost

subsidies and incentives might promote some private players to devote energies on
research and development (R&D). Implementation of Unified Construction Law for
clubbing all laws under a single umbrella boosts the private sector since construction
organisations are governed by different laws and various registration/licensing
procedures. There are few areas such as modified bitumen, construction machineries,
soil stabilization, bridge rehabilitation where private players can undertake some
meaningful R&D.

4.4.1.4 Laxity on implementing National Road Transport Policy

Department of Road Transport and Highways has drafted a National Road

Transport Policy to ensure greater participation of the private sector and the
rationalization of the motor vehicle tax regime across states with a view to eliminating
octroi alongside implementation of value added tax (VAT). The proposed policy is
focused on environmental, technological and fiscal aspects of motorised transport
which would be complementary to the urban transport policy and rural road
development programme being pursued by the ministries of urban and rural
development respectively. It makes a strong case for state level statutes to facilitate
land acquisition, shifting of utilities, approval for cutting of trees, and control of law
and order and encroachments for the ongoing national highway development project. It
has suggested creation of equipment leasing companies, accreditation of vehicle body
manufacturers and a differential taxation system to encourage the use of multi-axle
vehicles. To generate employment, it envisages co-operative societies to be set up by
state governments to train unemployed and unskilled youth for maintenance services as
is the present practice in Kerala and Maharashtra. The draft says though the road
network is extensive, it remains inadequate due to paucity of funds. Broad estimates
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indicate that a three to four fold increase in investments would be required and
budgetary resources could be leveraged to increase private investments.

While the light motor vehicle industry such as cars has seen substantial influx of
new technology, truck and bus manufacturing has a clear and urgent need for a major
technology upgradation. The fabrication of bus and truck bodies has become virtually
unregulated. A bus body code has been developed and work is on to draft a similar
code for trucks. To implement these norms, a system of accreditation of heavy vehicle
body manufacturers needs to be evolved. Proposing a differential tax on multi-axle
vehicles that save 50 per cent of fuel per tonne km, the draft says there is need for
increased use of low tyre weight. On the environment front, it has proposed a fitness
regime for non-transport vehicles which includes adherence to pollution control norms,
temperature and engine speed standards.

4.4.2 Cross Continental Experiences

A network of high capacity and high speed highways known as Interstate

highway system was developed by United States of America to link its vast territory.
These highways were commissioned in the 1950s by President Dwight D. Eisenhower
and modeled after the German Autobahn [Mark Rose 2008]. Inspired by the impressive
road network existed in Germany during the World War II, President Eisenhower put
his might for passing the resolution for Interstate highway system in the Congress.
Earlier during the great economic depression prevailed in 1930s, President Franklin D
Roosevelt seeking to pull the nation out of the economic mess saw a network of toll
superhighways as a way to provide new jobs for the unemployed. At that time, he
thought a system of three east-west and three north-south routes would be enough. The
successful completion of the Interstate highway system wasn’t a smooth affair but had
to resolve thorny issues such as expenditure sharing by federal and state governments,
ways and means to generate funds for highway development such as highway bonds or
gasoline tax etc. While created in part to help defend the nation in the event of an
emergency, the interstates with limited access and many lanes, have also spurred and
speeded the development of commerce throughout the country and abroad. Trucks
move quickly from one region to another, transporting everything from durable goods
 136

and mail to fresh produce and the latest fashions. And they have increased the mobility
of all Americans, allowing them to move out of the cities and establish homes in a
growing suburbia even farther from their workplaces and to travel quickly from one
region to another.

As regards to National Highway Development Project (NHDP), many parallels

can be drawn from Interstate highway system in USA. Federal Gasoline tax was levied
for financing of highways in USA similar to cess levied on pertroleum products was the
main source of funds for construction of NHDP. In USA, federal government shared
90% of the expenses with the state governments funding the remaining 10%, whereas
in India it is 100% funding from the central exchequer. The limited access concept
followed for US highways is being followed here too in India due to toll roads concept.
One can learn from the US experience that firm commitment from the political
leadership is required for successful implementation of any public project. Even in the
case of NHDP in India, it was a flagship developmental programme of the then NDA
government under the able leadership of former Prime Minister Shri Atal Bihari
Vajpayee which is being pursued relentlessly by the successive governments as evident
from the statements of ministers for expediting the highway construction at a laudable
pace of 20 km per day. A detailed write up on American Interstate highway system
incorporating the genesis, implementation and its impact is given at Appendix 13.

Analogous to National Highway Development Project (NHDP) in India,

People’s Republic of China has undertaken construction of expressways popularly
known as 5 vertical (North South routes) and 7 horizontal (East West direction). This
programme was later on converted to 7-9-18 (7 vertical, 9 horizontal and 18 diagonal
routes) spreading to around 45,000 kms [China Study Tour 2007]. The Chinese
expressway programme has been elaborated in Appendix 14 giving a detailed account
of their nurturing of the project overcoming the shortcomings. The transformation of
Chinese State Owned Enterprises (SOEs) in delivering the product after tie-ups with
the western construction giants through transfer of technology and knowhow is an
example to emulate by the developing countries [Mark Mobius 2008]. India too can
learn from the Chinese in the following areas :
 137

i. Strong need for advance planning and capacity building. Before embarking
upon any major highway development program, the stakeholders, particularly the
government, should undertake assessment and measures to enhance the country’s
policy and design capabilities and to augment the capacity of construction and the
associated supply chain industry to meet the demand, in addition to developing
uniform policies and standards.

ii. Strong emphasis on design quality and reviews. There should be a strong
design review mechanism built into the system of project approvals. The design
consultants should have a life-time responsibility for their work built into
contracts and their input should continue until construction is complete. More
effort and time should be spent on surveying, data collection and design and more
funds should be allocated for these very important project preparatory activities.
The design costs are much higher in China (typically 2.5% of project cost)
compared to India (typically 1%) and in China about 40-50% of the overall
project period is spent in surveys and design, while in India it is less than 20% of
total time [but the extra time and cost spent on design are more than recouped
later through timely construction within budget]. To ensure better quality
engineers, the salaries for design engineers have to be comparable with other
industries. In China the design engineers are offered substantially higher salaries
than their counterparts in construction or even than the average pay in the IT
industry. Entry requirements to the design institutes in China are often quite
stringent and a Masters degree in a relevant field is a minimum.

iii. Putting enough manpower and attention into completing land acquisition
and pre-construction before starting works is also amply rewarded by
subsequent rapid construction. In Hubei, although land acquisition and
resettlement are easier than in India, large teams are mobilized within the
implementing agency to work speedily on these issues with success.

iv. Precision and advanced topographic survey methods (like aerial

photogrammetry and GPS) are followed, and due care is taken in quality control,
as surveys, investigations and designs are carried out by the same agency. The
lifetime accountability system for project designers and constructors also creates a
strong incentive for quality and precision in designs. It is well recognized that
 138

designs are dynamic in nature and the core design team is maintained throughout
project implementation. Time and cost overruns on account of design deficiencies
are unheard of in China.

v. Partnering approach among stakeholders: There is a need to inculcate a

partnering approach among the contractors, consultants and employer for the
success of the project, which the team observed during its visits to project offices
in China. In China most disputes are resolved mutually and very few disputes are
referred to arbitration.

vi. Contract enforcement. Chinese experience demonstrates the efficacy of strict

contract enforcement, management, and monitoring of completion dates by
government officials at highest level. The majority of contracts in China finish
within the stipulated contract time and budget due to this practice. The project
completion dates and completion countdown measures are publicly displayed,
which puts substantial societal pressure on the project authority for timely
completion of projects.

vii. Stricter mobilization requirements and control. In China joint accounts are set
up for mobilization advances to monitor their use and avoid the diversion of funds
to other contracts by the contractor. Moreover, the mobilization requirements are
much more stringent in China than in India. To cite an example, for structures the
contractor must mobilize 25% of the staging, centering and shuttering materials
(formwork), so that the work can be completed in four to five cycles of casting.

viii. Supply chain industry. There is a need to strengthen the supply chain industry
and agencies specialized in pavement, earthwork, road furniture and maintenance,
etc. The strong supply chain industry can attract foreign contractors with good
project management skills.

ix. Faster decisions on variations and design changes. Decision making in China
is fairly decentralized, in contrast to the highly centralized decision making
practice in India. Moreover, the overwhelming fear of vigilance (intrusive audits)
also slows down decision making in projects in India. In China such situations are
averted by fully involving the design consultant, the anticorruption department
 139

(equivalent to CVC) and the audit department in arriving at decisions on large

variation orders.

x. Ministry of Finance’s role in coordination. There is a need for the Ministry of

Finance and its provincial counterpart (state level in India) to play a major role in
inter-agency coordination for large projects and programs, which the team
observed in China. There is a separate department under the Ministry of Finance
in China called “Comprehensive Department’ for carrying out this role, including
the relocation of utilities and the inter-departmental transfer of assets.

xi. Vendor database and performance monitoring system. The Government

should develop a national and state-level database of the various classes of
contractors and consultants, as well as a system to monitor their performance.
xii. Creation of authorities effectively empowered for coordination of planning
and implementation of the multiple agencies involved in urban transport projects
in a given urban area will facilitate speedy implementation.

At the end of this chapter, it would be interesting to present few revelations

from the Questionnaire survey. Majority of the respondents felt that democratic setup in
India is a major hurdle for emulating Chinese in rapid expansion of highway network.
Hesitation/atmosphere not favourable to making decisions at the various levels of the
Authority was cited by one of the respondents for delays in implementation. A retired
technocrat suggested that Pension, Provident and Insurance Funds should be made
available followed with uniform, sustainable and long term policy for infrastructure
development. One of the reputed consultants stated that poor planning and deficient
implementation rigor make the infrastructure less performing and unsafe. He further
claims that PPP is not understood correctly in India. Appoint only efficient and
performing staff in the road agency was the remark given by one of the respondents.
Another eminent person from the construction industry insisted on the requirement of
efficient design consultants at site since presently supervision consultants take long
time for resolving even minor design changes.
 140

The author’s paper ‘A Decade of Highway Infrastructure Development

under NHDP – An Insight on Varied Experiences’ published in International Journal
of Earth Sciences and Engineering (Dec 2010) comprehensively covered the various
causes of delays in the implementation of highway projects in India. Further owing to
the practical relevance of the detailed study on time and cost overruns carried out by
the author, the prestigious Indian Roads Congress has accepted another paper titled
‘Time and Cost Overrun Analysis of Highway Development Projects’ for
presentation as a discussion paper at 73rd IRC Annual Session held at Coimbatore
(Tamil Nadu) in January 2013 and eventually published the paper in its Journal of
Indian Roads Congress, Vol 73-3, Oct-Dec 2012.
 141

CHAPTER 5
CONCLUSIONS AND RECOMMENDATIONS
Concluding chapter 5 at the end tried to summarise the findings of the
analysis of time and cost overruns. This chapter has brought out the
importance of physical connectivity through highway infrastructure in
the country through the massive development programme in the form of
NHDP and at the same time envisaging the role of the governments in
removing the constraints. The various impediments on the path of
project implementation were listed according to their criticality.
Tabulation of various factors causing delays and suggested measures to
overcome the delays is the highlight of this chapter giving the readers
the crux of the research carried out by the research scholar. The chapter
ends with a note of optimism shared by the engineering fraternity stating
that the committed target of achieving the road construction at the rate
of 20 km per day is attainable if timely corrective actions are taken.

Contents
5.1 Introduction 141
5.2 Findings of the Study 143
5.3 Recommendations for Effective Implementation 146
5.4 Limitations of Study 151
5.5 Scope for Further Research 152

5.1 Introduction

According to Paul Hugentobler, Member of Executive Committee, Holcin Ltd,

India has achieved air and telecommunication connectivity and now to push growth, the
country must achieve physical connectivity through roads for connecting urban and
rural areas. Due to peculiarity from project approvals to plan and then to capital, the
highway construction industry is largely influenced by the government policies. There
are many models for increasing private sector participation in transport. These include
management contracts, lease contracts, franchises and concessions, or full privatization
[World Bank 2008a]. Indian government is actively pursuing public private
 142

participation (PPPs) through concessionary agreements viz., tolls and annuity models to
bridge the infrastructure deficit in the country. Several initiatives have been taken since
2002 to promote PPPs in sectors like power, ports, highways, airports, tourism and
urban infrastructure. Under the overall guidance of the Committee of Infrastructure
(COI) headed by the Prime Minister, the PPP programme has been finalised and the
implementation of the various schemes is being closely monitored by the constituent
Ministries/Departments under this programme. The appraisal mechanism for the PPP
projects has been streamlined to ensure speedy appraisal of projects, remove red tape,
adopt international best practices and have uniformity in guidelines. An appraisal
mechanism has been notified including the setting up of the Public Private Partnership
Appraisal Committee (PPPAC) responsible for the appraisal of PPP projects in the
central sector. The committee has mandated detailed guidelines for submitting
proposals and follows a pre-determined time frame for according approval to proposals
submitted in a time bound manner.

PPP projects involve long-term detailed contracts between Government and

Private parties spelling out the rights and obligations of both the contracting parties.
Given the complex issues involved and the exposure of Government in such contracts,
Committee on Infrastructure has mandated issue of model documents. Government of
India has decided to create standardized frameworks based on due diligence rather than
evolving agreements on a project-by-project basis. The agreements will be based on
international practices and will create a framework with the right matrix of risk
allocation obligations and returns covered exhaustively in the Model Concession
Agreement (MCA). The paradigm shift to PPP mode for future development of
highways does not absolve the Government of its basic responsibilities since much of
the progress on the roads and highways front will depend on how rapidly constraints
such as delays in land acquisition, clearances from State Forest and Pollution Control
Board (PCB), removal of structures and shifting of utilities, law and order problem in
some States are removed [MORT&H 2007]. Besides issuing of permits required for
project implementation, the State Support Agreement in the form of assistance in
highway patrolling, assurances for no additional toll way (generally before 8 years) as
per the Concession Agreement needs to be followed up.
 143

5.2 Findings of the Study

National Highway Development Project (NHDP) to upgrade, rehabilitate and

widen 45000 km of Indian highways commenced in 1998 is a great learning experience
leaving a vast scope for improvements on the implementation of ongoing works.
Besides sharing the achievements of this grandiose plan, this thesis has attempted to
bring out the various impediments faced at different stages of its execution which in
turn would help the planners to rightly take stock of the ongoing highway program.
Statistical Analysis using correlation and regression technique was carried out on 224
Nos highway projects spread in the various parts of India. The analysis has brought out
that delays were mostly in initial phases of NHDP viz., GQ and NSEW corridor work.
No significant improvement in the implementation of projects was noticed as evident
from the fact that the time overruns have almost doubled from 2008 to 2010. At the
same time it was noticed that time overruns are considerably reduced in the later phases
of NHDP from Phase III onwards. The analysis has brought out certain interesting
results involving project cost and time overruns thus recommending for packaging of
larger projects costing more than ` 6.0 billion so as to arrest the time overruns. No
meaningful correlation could be established between project cost and time overruns on
an All India basis, but reliable regression equations were derived state wise except for
few states such as Assam, West Bengal etc. In few states, data was inadequate for
drawing any inferences on time and cost overruns. Regression equations were also
established between project cost and cost overruns in the affected states. The Delay
Index model suggested in this study is specially tailored to highway projects and
attempt has been made to incorporate the inputs given by Project Implementation Units
(PIUs) for assessing the time overruns. An illustration on the application of Delay
Index model was given in Chapter 3 and the results were more or less tallying with the
ground situation.

Questionnaire Survey was carried out to obtain relevant primary data to

ascertain the various factors causing delays. Out of 150 questionnaires sent covering
various aspects associated with the implementation of highway projects, 66 eminent
persons from the comity of consultants, construction firms and officials representing
the monitoring agencies have responded. The respondents were asked to rate a number
 144

of variables using a rating scale (0 - 5). The reasons for slippage of completion
schedules on NHDP are shown below :

Critical Factors

ƒ Pre-construction activities such as land acquisition, utility shifting etc not geared up
so as to keep pace with the proposed completion schedules.
ƒ Delays in preparation of Detailed Project Reports (DPRs) incorporating feasibility
studies, traffic projections and revenues etc.
ƒ Delays in Project Approvals, requisite clearances from concerned Ministries as
Railways for ROB/RUBs, MOEF for forest clearance etc.
ƒ With 72 odd districts often referred as red corridor affected by naxalism and a
couple of border states such as J&K and Assam infected with insurgency/
militancy, Law and Order has taken a significant toll on progress of highway
projects.

Significant Reasons

ƒ Poor response from Concessionaires to take up projects on BOT (Toll and Annuity)
basis and in that eventuality inadequacy of funds to get the work on EPC mode.
ƒ The following pan-Indian data pertaining to NHDP works affected by rains and
floods in the year 2008 alone illustrates the wide spread nature of the natural fury
on the developmental works affecting highway programme
S No State Affected NHs Remarks
i) Assam 31C, 37 and 54 Floods
ii) Bihar 28 and 57 Kosi river Breach
iii) Gujarat 8A, 14 and 15 Incessant rains
iv) Tamil Nadu 4, 5 and 45 Torrential Rains
v) West Bengal 31 Rains and Floods

ƒ Change of guard at the highest echelons of governance from National Democratic

Alliance to Congress led UPA government in 2004 leading to shifted priorities from
highways to rural development (Even interstate highway success in USA owes to
nurturing by the then US President DD Eisenhower).
 145

Areas requiring reforms

ƒ Lack of supporting infrastructure and absence of equipment bank such as

construction machinery, hot mix plants, specialized subcontractors etc.
ƒ Contracting Principles of awarding the work to ‘L1’ alone, thus inferior and
overloaded contracting firms unable to undertake the gigantic workload of NHDP
leading to inordinate delays.

Active support of the government is required for any policy to succeed. Change
in the corridors of power at centre with focus on National Rural Employment
Guarantee program (NREGA) has put NHDP commenced by previous National
Democratic Alliance (NDA) government on a back seat. However United Progressive
Alliance (UPA) government on its reelection in 2009 has shown its resolve to speed up
the highway program. Further, NHAI instead of completing the ongoing projects has
expanded NHDP to seven phases with projected investment shooting up from 50 to 200
billion USD over the period 2005 - 2012. The highway program has become
unmanageable at times due to bowing down to pressures from local parliamentarians
for extending NHDP to their constituencies under Phase III not covered under GQ or
NSEW corridor. Pruning the highway program from time to time by prioritizing the
projects on the basis of feasibility and deferment of certain packages due to poor
bidding response as well as resource crunch was carried out. The time delays are in
turn causing cost overruns due to general price inflation. Coupled with this frequent
changing of Chairman of NHAI had led to administrative paralysis affecting the
government flag ship programme NHDP. At the lower level incorporating Project
Managers, decision making was affected due to fear of vigilance thus piling up of many
disputes on claims and extra work etc affecting the smooth progressing of works. Thus
dispute resolution is another sore issue in the project implementation and NHAI needs
to seriously consider implementation of BK Chaturvedi’s suggestions as one time
measure.

In principle, the corridors having medium or low traffic density may not be
viable on BOT (Toll) basis and therefore for such corridors, BOT (Annuity) mode
would be more appropriate for PPP. If a proper due diligence indicates any project to be
 146

unviable on BOT (Toll), then it should be offered on BOT (Annuity) basis in the first
instance itself. Therefore, there is need to revisit the policy of first offering the project
on BOT, and then BOT annuity, and then to civil works contracts, with an approval at
each stage, since this process would not only take more time, but may also lead to lack
of seriousness among the bidders. Where ever less response is anticipated for toll
projects, straight away these projects can be earmarked under annuity mode so as to
save the precious time involved in tendering and awarding. EPC mode should be the
last resort and NHAI should be geared up to mobilize the funds for annuity and EPC
projects. Presently, a huge 90% of the projects were planned through BOT mechanism
which appears to be not practical, hence switching over partly to annuity and EPC
models may be resorted to. This will be coupled with requirement of fund generation
for sustaining the flow of finances and this study has suggested certain innovative
methods such as beneficiary participation, corpus fund and e-auctioning. Periodic
reviewing needs to be done for tailoring the requirements to suit the prevailing
economic and market scenario.

5.3 Recommendation for Effective Implementation

World over, globalisation has the fundamental effect on economic development.

India is no exception to this global phenomenon. Developing countries can no longer so
easily play the protectionist card and assure their development in the globalised regime
[Jean-Francois Huchet 2006]. In reality, the Indian reforms entailed both the reduction
of barriers to entry and the elimination of controls on the production decisions of firms.
The delicensing triggers both the entry of new firms accompanied by the exit of less
productive incumbents and the expansion of more productive firms accompanied by the
contraction of less productive ones [Philippe Aghion 2005]. The new millennium has
seen the Indian economy surge ahead breaking all previous barriers.

India is among the world's youngest nations with a median age of 25 years as
compared to 43 in Japan and 36 in USA. According to the World Fact Book, of the
BRIC (Brazil, Russia, India and China) countries, India is projected to stay the
youngest with its working-age population estimated to rise to 70 per cent of the total
demography by 2030 -- the largest in the world. The economy is vibrant - India's
foreign exchange reserves stood at a healthy $300 billion. In 2007-08 alone, foreign
 147

institutional investors (FIIs) brought in $ 16.1 billion and foreign direct investment
(FDI) inflows rose 56.5 percent to $ 24.57 billion. The number of companies
incorporated has increased from 712,000 to 865,000. However, all the progress made
by the country is obscured by the core problems that plaques the nation such as poor
infrastructure, poor educational standards, balance of payments, high levels of debt,
unemployment, economic inequality, large budget deficit, high inflation, rigid labor
laws and high subsidies. These problems stunt growth and restrict India to being only a
developing economy. Reform of inappropriate policies, unproductive government
programs and inefficient public organizations and projects can generate hope and
confidence in a more productive future.

It is strongly believed that the key to solving the critical problems that are faced
by the nation lies in the integration of the efforts of the different states and the centre.
The states of the Indian federation should share the responsibility of fiscal
consolidation and prudence in a federal polity. State finances need to be strengthened,
for both macroeconomic and structural reasons. A shuffle in the revenue expenditure by
states can decrease the revenue deficit while leaving sufficient funds for developmental
expenditures, especially for the key area of human resource development. Inadequate
infrastructure such as irrigation, electricity, roads etc and human capital formation viz.,
expenditures on education, basic health etc where states shoulder major responsibilities
have large costs not only to the states concerned but beyond their borders. Improving
the center-state financial relations and working towards economic integration would go
a long way in nation building and socio-economic development. For this India can take
learning from integration models followed in USA (between states) and European
Union (between countries) and thus target inclusive economic growth in the nation. The
taxation and subsidy regimes of states and center should be in consonance for creating
an encouraging and exciting business environment such that the benefits accruing from
the reforms of central policies are maximized. Nearly 30 per cent of the Central Road
Fund (CRF) collected through a cess @ ` 1.50 on petrol and diesel, goes to states.
About 60 per cent is used for building national highways and the rest for rail over-
bridges. States have not come forward with enough proposals on road development.
The amount released to state government is based on the progress in various projects.
The fund is non-lapsable. A low utilization despite high accruals, would mean locking
 148

up of resources, till the states have found a use for them. There are few instances of
states such as Uttar Pradesh not coming forth in signing State Support Agreement
(SSA) meant for removal of hurdles in project implementation.

In a project like NHDP of vast magnitude spread in the length and breadth of
the country over a period of two decades, the reasons for delay are mostly from
preconstruction activities like land acquisition, shifting of utilities etc. Contractor’s
poor performance which owes to capacity constraints in the form of requisite number of
contracting firms, skilled manpower etc was also found to be a predominant hindrance
in the implementation of projects. Cost overruns are mostly prevalent in EW corridor
projects. Lack of consistent policy on the implementation of highway projects is also
responsible for slackness in the implementation and eventual cost and time overruns.
The role of the state in addressing these larger issues of national importance such as
capacity constraints, law and order and necessary policy formulations so as to promote
the highway construction cannot be negated. It is also emphasised in this thesis that
strategies for reinforcing the highway program can be of low effort without any
financial burden on the government such as issuing circulars to the concerned
departments for expeditious working and better coordination, sparing of surplus
technical staff from engineering departments on deputation/lien and offering few
incentive schemes etc. The gist of recommendations to overcome the hurdles in
implementation of NHDP is brought out at Table 5.1.

Table 5.1 Recommended Measures for Project Implementation

S No Delay Factor Suggested Measures
i) Land ƒ Speedy Enactment of LA and R&R Bill 2011
Acquisition ƒ Digitisation of Revenue Maps and Training of survey staff
ƒ Usage of advanced survey techniques as aerial photography
ii) Natural ƒ Advanced contingency planning
Disasters ƒ Insistence on Fast Track Construction and Appropriate
Project Management Techniques
iii) Tardy ƒ Termination of defaulting contracts on case to case basis
Performance of ƒ Exemption of ‘L1’ tendering policy for certain trouble torn
Contractors regions for specified period in order to weed out
incapable/unworthy firms bagging the contracts
ƒ Methodology to monitor the performance of subcontractors
 149

S No Delay Factor Suggested Measures

iv) Capacity ƒ Instructions to all Government Departments from PMO for
Constraints relieving all technical staff/tradesmen on 2 to 3 year
leave/lien interested to join consultancy or contracting firms
on NHDP works to overcome the shortage of qualified
manpower
ƒ Promoting alternate and new technologies such as Nano
Polymer Soil Stabilisers for reduction in crust thickness thus
savings in material and also faster construction.
ƒ Promotion of Construction Equipment Banks
ƒ Skills upgradation for tradesmen through National Academy
of Construction (NAC) and training of highway engineers
by National Institute for Training of Highway Engineers
(NITHE).
v) Project ƒ Conceiving larger projects ( > ` 6.0 billion ) wherever
Packaging feasible as evident from statistical regression analysis to
arrest time overruns.
ƒ Reduced Dependence on BOT from the present 90%.
ƒ Fund raising through Beneficiary Participation, Corpus
Fund, increased negative grants from e-auctioning etc.
ƒ FDI on attractive stretches of NHDP Phase V so as to
conserve the potential of local firms for remaining stretches.
vi) Detailed ƒ Adequate time frame for preparation of DPRs
Project Reports ƒ Design Consultant’s life time responsibility for their work
(DPRs) ƒ Induction of state of art survey equipments and training
vii) Law and Order ƒ Security Cover through State Support Agreement
ƒ Incentives through increased VGF in disturbed areas
ƒ Additional Cost for Security incorporated in DPRs
ƒ Entrustment of work in trouble prone areas to Border Roads
Organisation which has experience of working in militancy
infested areas
viii) O&M ƒ Periodic restructuring and reorganisation of NHAI
ƒ Refinements to Model Concession Agreement (MCA),
Procurement Procedures etc
ix) Absence of ƒ Unified Construction Law for clubbing all laws under a
Common laws single umbrella since construction organisations are
governed by different laws and various
registration/licensing procedures
 150

S No Delay Factor Suggested Measures

x) Misc ƒ Necessity of Dispute Resolution Mechanism to eliminate
time/cost overruns
ƒ Integrated Project Monitoring with inbuilt resources
management for effective implementation of construction
works
ƒ Need for Appropriate Design and Construction
Methodology to arrest delays
ƒ Necessity to learn from Chinese such as
¾ By putting enough manpower and attention on pre-
construction activities such as land acquisition, utility
shifting etc.
¾ Stricter contract enforcement and efficient dispute
resolution mechanism
¾ Advance planning and capacity building including
strengthening of supply chain industry
¾ Decentralisation and conducive work environment for
faster decision making at ground level.

Infrastructure is an engine for economic development [Shukhla 2004].

Regardless of the constraints as mentioned at Table 5.1, the impact on the economy due
to completion of Golden Quadrilateral is wide spread. The result of the initiatives
taken by the government of India is now visible and has dramatically enhanced the
quality of road travel and transport in India [DIPP 2004]. The substantial completion of
NHDP has necessitated greater emphasis on corridor management, that is, on managing
the highways in such a manner as to deliver maximum throughput in terms of speed
and traffic volume while minimizing the cost of operation and enhancing road safety.
The concept of corridor management as explained at Appendix 15 is being applied on
the completed sections of NHDP through operation and maintenance (O&M) contracts.
The scope of work among other things includes road maintenance, road property
management, incident management, traffic management, toll fee collection, wayside
amenities and engineering improvements.

It is pertinent to mention at this juncture that majority of the respondents to the

questionnaire have voiced their optimistic opinion stating that highway augmentation at
20 km per day is possible if timely corrective action is taken in the implementation of
 151

highway program. Owing to the size of the robust economy of the Indian subcontinent,
it is just the political will and dedicated push for integrated effort on the
implementation front, which is required at this hour.

5.4 Limitations of Study

The list of projects considered for statistical analysis is not exhaustive and only
those projects which are reported by the Project Implementation Units (PIUs) in the
MOS&PI’s status reports were considered for the analysis. Particularly some of the
projects costing less than ` 200 million are not reported by the Ministry of Road
Transport and Highways (MORT&H). The anticipated dates of commissioning and
anticipated cost of the projects do not reflect the exact assessment of the project
authorities at the time of reporting. This needs to be reviewed taking the progress in the
master network of the project. This will reveal the true status. The project authorities
are not furnishing complete and accurate data in time. Further the reasons brought out
by Project Implementation Units (PIUs) might turn out to be superficial and do not
reflect the root cause of the problem/ground reality.

Delay Index model developed by the author suffers from the limitation that
computation is not possible due to lack of data or paucity of information from PIUs.
Moreover the gravity of the delay factors cannot be assessed in the absence of any such
information from PIUs. This shortcoming can be overcome if PIUs are asked to share
the information on delay factors as well as their intensity in the form of certain ranking
on linear rating scale. Further no significant relationship between Delay Index and
Time Overruns could be established on all India basis for all the 224 projects since
correlation coefficient ‘R’ was just 0.109 with significance value ‘α’ of 0.104, thus
implying no uniformity amongst the states. However, the model suggested in this study
has a scope for improvement if data on delay factors can be further elaborated by PIUs
in terms of intensity of delay factors and also bringing out the reasons for delay where
PIUs have left blank for as many as 101 projects.

As regards to Questionnaire survey, despite best efforts by the authors, response

was received from 66 people only against the circulation of 150. There could have been
some interpretation problems in understanding few queries and subsequently might
 152

have affected the responses. For certain queries such as regarding the quantum of
mobilization of funds through beneficiary participation or corpus fund, response was
nil since these concepts were new and not familiar to the respondents.

5.5 Scope for Further Research

Regression analysis can be further extended in future studies incorporating

some more variables affecting time and cost overruns. Apart from the regression
analysis, time series forecasting models can be employed for predicting the trend of
overruns. Further the study recommended few innovative funding mechanisms for
highway projects such as beneficiary participation, generation of corpus fund, and
electronic auctioning in the place of tendering for awarding the highway projects.
Requirement of Unified Construction law is also necessitated for effecting reforms in
the construction arena, which is presently unorganized to a great extent. Thus there lies
a tremendous scope for carrying out further studies on all the above aspects
recommended by this study.
 153

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APPENDIX 1
PHASE WISE SCHEDULE OF NHDP
The National Highways Development Project (NHDP) is a project to upgrade,
rehabilitate and widen major highways in India to a higher standard. The project was
commenced in 1998. National Highways account for only 2% of the total length of
roads, but carry about 40% of the total traffic across the length and breadth of the
country. This project is managed by the National Highways Authority of India (NHAI)
under the Ministry of Road Transport and Highways (MORT&H).

x Phase I : The Golden Quadrilateral (GQ) connects the four major cities of Delhi,
Mumbai, Chennai and Kolkata. The length of this project connecting the four metro
cities is 5846 km. Total cost of the project is ` 300 billion funded largely by the
cess levied on the petroleum products and government borrowings.

x Phase II : North South East West (NSEW) corridor comprising national highways
connecting Srinagar in the north to Kanyakumari in the south including spur from
Salem to Kochi (via Coimbatore), and Silchar in the east to Porbandar in the west.
Total length of the network is 7300 km at a cost of ` 350 billion with funding
similar to Phase I.

x Phase III : Government of India has approved NHDP III to upgrade 12,109 km of
national highways on a Build, Operate and Transfer (BOT) basis. Phase III takes
care of the high density traffic routes connecting state capitals and places of
economic importance which are not covered under Phase I and II.

x Phase IV : This comprises widening of 20,000 km of highways that were not part of
Phase I, II, or III. Phase IV will convert existing single lane highways into two
lanes with paved shoulders.

x Phase V : As road traffic increases over time, a number of four lane highways will
need to be upgraded/expanded to six lanes. The current plan calls for upgrading of
about 5,000 km of four-lane roads mostly from Golden Quadrilateral.

x Phase VI : The Indian government is working on constructing expressways that

would connect major commercial and industrial townships. It has already identified
400 km of Baroda-Mumbai section that would connect to the existing Baroda-
 165

Ahmedabad section. The World Bank is studying this project. The project will be
funded on BOT basis.

x Phase VII : This phase calls for improvements to city road networks by adding ring
roads to enable easier connectivity with national highways to important cities. In
addition, improvements will be made to stretches of national highways that require
additional flyovers and bypasses considering the population and housing growth
along the highways and increasing traffic.
 166

APPENDIX 2
QUESTIONNAIRE SURVEY

INTRODUCTION
The rapid growth of traffic from 1.9 to 8.8 million in a span of two decades @
8.9% per annum without a matching augmentation of capacity has only added to the
deterioration of the road network. Coupled with inadequate capacity, the principal
causes of congestion that slow down the movement of traffic and increase the
consumption of fuel are mainly due to poor maintenance, lack of bypasses to
circumvent urban areas, octroi/tax barriers, road side encroachments and mixed traffic.
The advantages of having a well developed network of world class highways are many
for a nation like India poised to surge ahead as shown below :
x Savings in vehicle operating costs and safer travel;
x Faster and comfortable journey along with reduced fuel consumption;
x Reduced maintenance costs and all round development of areas; and
x Benefits to trade especially in the movement of perishable goods.

Accounting for the vast importance of National Highways and to overcome the
problems as explained above, National Highway Development Project (NHDP) was
envisaged through four laning of the existing high density highway corridors linking
four mega metropolises known as Golden Quadrilateral (GQ), and NSEW corridor with
port connectivity (overall length of 14,146 Km at an estimated cost of ` 580 billion at
1999 price level is one of the largest highway projects in the world. Later on the NHDP
was expanded in its scope covering 45,000 kms under Phase I to VII at a gigantic sum
of ` 2200 billion in 2006. There were 224 projects on the Ministry of Statistics and
Project Implementation (MOS&PI) monitor at Q/E March 2008. The status of various
projects as on 31st Mar 2008 were as under :
Category Total Within Within Time Within Cost With Time
No. of Time but with but with and Cost
Projects and Cost Time overrun overrun
Cost overrun
Mega - - - - -
Major 202 30 21 133 18
Medium 22 5 0 15 2
Total 224 35 21 148 20
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The main factors contributing to occurrence of time overrun in the NHDP

packages according to Project Implementation Units (PIUs) are as follows :
ƒ Adverse law and order situation in states like Bihar and Jharkhand;
ƒ Difficulties experienced in land acquisition as in Maharashtra, Karnataka, and
Tamil Nadu;
ƒ Removal of large number of structures including places of worship like temples,
mosques, and, ‘majars’(tombs), ’dargahs’ as in case of Tamil Nadu and Andhra
Pradesh from the alignment of various packages;
ƒ Forest clearances and felling of trees in states like J&K, MP etc;
ƒ Removal of various utilities such as water mains, electrical lines, sewer lines,
telephone lines, wind mills in Bihar, Karnataka, Maharashtra, West Bengal and
Tamil Nadu;
ƒ Pending court cases as in West Bengal and Gujarat;
ƒ Slow progress on the part of contractors, non-availability of quarry stone of the
desired grade, award of contracts without land acquisition;
ƒ Changes in the design and delay in obtaining approval for rail over/under bridges
(ROB/RUBs);
ƒ Changes in alignment subsequent to award of contract due to factors such as local
soil and geology of the region;
ƒ Inadequate deployment of qualified staff by contractors at project–sites;
ƒ Difficult geology of the region as in case of packages undertaken in the Deccan
region of Maharashtra.

SCOPE OF RESEARCH

In order to give a positive fillip to the highway programme so as to attain the

ambitious target of building 20 km of highways per day set by Union Minister Kamal
Nath from the current 2 km/day, B.K. Chaturvedi Committee was constituted for
resolving procedural impediments to the project. The committee after taking a holistic
view on the status of implementation of NHDP has arrived at a suitable works plan as
shown below :
 168

Work Plan : Year – wise Length in km

NHDP Phase 2009-10 2010-11 2011-12 2012-13 2013-14 Total
BOT (Toll) : 20706 kms (i.e., 56 %)
III (4 lane) 4373 4373
II (4 lane) 55 55
V (6 lane) 2403 1200 - - 1477 5080
VI (expressways) 436 604 1040
III (2 lane with paved 1977 1977
shoulders
IV (2 lane) 4086 3075 339 7500
VII (4 lane) 681 681
BOT (Annuity) : 13014 kms (i.e., 35 %)
III (4 lane) 524 524
II (4 lane) 380 380
II (J and K) 239 239
III (2 lane with paved 1477 1477
shoulders)
IV (2 lane) 4645 4000 1355 10000
SARDP-NE (4 lane) 394 394
EPC : 3330 kms (i.e., 9 %)
SARDP-NE (4 lane) 330 330
IV (2 lane) 1161 1000 339 2500
III (2 lane with paved 500 500
shoulders)
Total 12652 11092 9192 2637 1477 37050

However no significant improvement is visible on the ground scenario as

evident from the news item of 6th May 2010 published in World Highways stating that
Indian Government has granted approvals for 32 highway projects during 2009-10 for a
length of 3600 km well below the targeted 126 projects stretching to 11,928 km in total.
Even after the most optimistic assumption that these projects go into operation without
serious delays, the situation is quite alarming with the gross slippages of the stupendous
 169

targets assigned by BK Chaturvedi Committee rolling down to subsequent years as

substantial backlogs thus further pushing the adhered completion schedules astray. The
present situation demands major surgical measures and not merely cosmetic ones. A
Questionnaire in this perspective covering certain important aspects pertaining to
implementation of highway projects is presented for collating the ammunition to be
provided by you for analysing the genuine reasons behind the much discussed project
delays. This would further help in evolving suggested remedial measures to reduce if
not totally mitigate the much avoidable time and cost overruns plaguing the highway
projects.

QUESTIONNAIRE

1. Slippage of completion schedules – Few important reasons for time over-runs of

GQ and NSEW Corridors are listed below. Assign the figure from the rating scale
corresponding to its importance and impact on the completion schedule.
Highly critical Critical Important Significant Not so No
factor causing factor factor factor important significance
delays factor at all
5 4 3 2 1 0

x Delays in preparation of Detailed Project Reports (DPRs) incorporating feasibility

studies, traffic projections and revenues etc [ ]
x Delays in Project Approvals, requisite clearances from concerned Ministries as
Railways for ROB/RUBs, MOEF for forest clearance etc. [ ]
x Pre-construction activities such as land acquisition, utility shifting etc not geared up
so as to keep pace with the proposed completion schedules. [ ]
x Contracting Principles of awarding the work to ‘L1’ alone, thus inferior and
overloaded contracting firms unable to undertake the gigantic workload of NHDP
leading to inordinate delays. [ ]
x Change of guard at the highest echelons of governance from NDA to UPA of 2004
- 09 leading to shifted priorities from highways to rural development (Even
interstate highway success in USA owes to nurturing by the then US President DD
Eisenhower) [ ]
 170

x Poor response from Concessionaires to take up projects on BOT (Toll and Annuity)
basis and in that eventuality inadequacy of funds to get the work on EPC mode.
[ ]
x The following pan-Indian data pertaining to NHDP works affected by rains and
floods in the year 2008 alone illustrates the wide spread nature of the natural fury
on the developmental works.
S No State Affected NHs Remarks
i) Assam 31C, 37 and 54 Floods
ii) Bihar 28 and 57 Kosi river breach
iii) Gujarat 8A, 14 and 15 Incessant rains
iv) Tamil Nadu 4, 5 and 45 Torrential rains
v) West Bengal 31 Rains and floods

These rains and floods on annual pattern in some parts or the other have
affected the highway construction. [ ]
x With 150 odd districts often referred as red corridor affected by naxalism and a
couple of border states such as J&K and Assam infected with insurgency/militancy,
Law and Order has taken a significant toll on progress of highway projects. [ ]
x Lack of supporting infrastructure/equipment bank such as construction machinery,
hot mix plants, specialized subcontractors etc. [ ]
x Any other reason, as you think fit and appropriate.

2. Land Acquisition (LA) - The quantum of LA is unprecedented for NHDP works

since about 8300 hectares required for the GQ alone and another 19000 hectares for
NSEW corridor work under the second phase of NHDP. LA was found to be the
biggest hurdle in the implementation of highway projects in as many 73 Nos out of 224
projects listed by the Ministry of Statistics and Programme Implementation (MOS&PI)
i.e., 32.58 %. The paradigm shift to PPP mode for future development of highways
does not absolve the Government of its basic responsibilities since much of the
progress on the roads and highways front will depend on how rapidly constraints such
as delays in LA, clearances from State Forest and Pollution Control Board (PCB),
 171

removal of structures and shifting of utilities, law and order problems in some states are
removed.
Some of the reasons attributed to delays in LA are listed below. Assign the
figure from the rating scale corresponding to its importance and impact on the LA
process.
Highly critical Critical Important Significant Not so No
factor causing factor factor factor important significance
delays factor at all
5 4 3 2 1 0
Disputes in assessment of compensation amount for acquired land
Corruption and extensive delays in disbursement of compensation amount
Non availability or incomplete land records
Removal of encroachments, which quite often take political colours
Insufficient or ill trained survey staff preparing land details
Lack of commitment on the part of revenue circle holding land records
Delayed resettlement and rehabilitation of Affected Populace (APs)
Acquisition of land much beyond actual requirement citing future needs
Lengthy acquisition procedures as per LA or NH Acts
Frequent changes to alignment by concerned agencies involved in LA
Stricter Forest Laws and tedious Environmental Clearences
Resistance by land holders especially in tribal and remote areas
Fixing of compensation amount on lower side due to fear of vigilance department,
thus compelling the affected populace to go to court of law.
Non Passage of LA Amendment Bill (2007) in the Parliament

x The basic distinction which made difference between highway development

programs adopted by India and China is speedier land acquisition by China which is
attributed to the nature of their polity i.e., Communism. Suggest some measures to
accelerate LA process without diluting our strong commitment to democratic
credentials.
 172

3. Feasibility Reports/DPRs by Consultants - Financial Express dated back to 20th

October 2009 quoted that ‘Despite good response to the bidding process for NHDP
Phase III projects, there is a backlog of contracts to be awarded to successful bidders.
Between May and Aug 2009, against a target of 28 contracts, only eight could be
awarded and NHAI officials attributed this backlog to problems like non-preparation of
DPRs and bid documents’. The Ministry came under severe criticism as it had failed to
capitalise the upsurge in highway investment as evident through negative grants in
many contracts. Measures to expedite the preparation of DPRs are listed below and rate
the effectiveness of these measures in expediting DPRs as per the efficacy scale given
below.
Most Quite Effective Just Okay Not Workable
Effective Effective
5 4 3 2 1
x Promotion of Consultancy firms by encouraging the interested entrepreneurs step
into consultancy. [ ]
x High remuneration packages to consultants as practised in China where design
engineers are paid higher than their counterparts in construction or even higher than
the average pay in IT industry. [ ]
x Involving Engineering Colleges by offering them consultancy work. [ ]
x Inviting Foreign Consultants having requisite expertis [ ]
x Filtering of Consultants and weeding out incapable/ inefficient ones. [ ]
x Induction of state of art software/computational tools. [ ]
x Any other measure you think appropriate....

Reasons for poor quality of DPRs -

ƒ Time devoted for preparation of DPR is quite less. [Yes/No]
ƒ Lack of expertise with Consultants. [Yes/No]
ƒ Poor enforcement from regulatory body since these lean organizations have neither
capacity nor desire to check the details [or] may be due to acute shortage of
Consultants thus compromising on the quality of work. [Yes/No]
 173

x Lack of seriousness on the part of Consultants as evident from the absence of

Internal Quality Audit System before submitting their reports. [Yes/No]
x Do you recommend Design Consultant’s life time responsibility for their work built
into contracts and their input should continue until construction is completed as
practiced in China. [Yes/No]

4. Pre-Qualification (PQ) – NHAI has evolved a methodology of prequalification

limiting to top 6 high score firms or number of projects for which only they can be
prequalified. This has caused many companies, who would otherwise have been single
bidders to go in for Joint Venture unnecessarily to gain higher score. After getting
qualified, when the scheme is really put to tender, if the same is not viable, they do not
quote. Thus for many schemes, either there were no tenderers or only a single tender.
Single tender gives always a doubt for its competitiveness to accept the tender by the
employer. Hence precious time is lost. Instead would you recommend single stage
tendering with post qualification be resorted to ?
[ Yes / No / Yes only in instances where response is expected to be poor from tenderers
/ Decide on case to case basis ]

5. Public Private Partnership (PPP) –A survey covering 12 states and 3 central

agencies covering 86 PPP projects awarded in 5 infrastructure sectors has revealed that
highway sector evoked massive response in as many as 74% PPP projects when
compared with other sectors as Urban Development (13%), Ports (9%), Airports (2%)
and Railways (2%). Still the ambitions highway program under NHDP is lagging far
behind completion schedules. Certain modifications to Model Concession Agreement
(MCA) suggested by BK Chaturvedi Committee for making PPP more attractive are
given as under :
ƒ Increase in equity grant (VGF) to 40% by merging equity and OandM grants.
ƒ Project wise PQ in RFQ to be substituted with annual/periodic PQ.
ƒ Threshold Technical Capability (TTC) of bidders to be reduced from twice the
estimated project cost to estimated project cost i.e., brought down by 50%.
ƒ Applicability of Conflict of interest at RFP stage instead of RFQ since applicants
would be unaware of each other at RFQ stage. The identity of other bidders occurs
 174

only when the list of qualified/eligible applicants is put up for information only
after RFQ stage.
ƒ Relaxing the condition of forfeiture of entire Bid Security which is a significant
amount between 1 to 2 % of Total Project Cost (TPC) to mere 5% of value of Bid
Security due to non-responsiveness of tenderers.
ƒ Extension of concession period of Concessionaire in proportion to cost to be
incurred for capacity augmentation with an upper cap of 5 years instead of existing
clause for termination in case of exceeding of designed traffic.
Would you suggest anything else, which you feel important ?

6. Financing of NHDP - The economic meltdown led to a sluggish infrastructure

growth in India. In July 2009, the country reported a 1.2% infrastructure growth as
against a robust 6.1% growth in July 2000. This prompted Finance Minister to
exclusively focus on infrastructure development in the Union Budget 2009-10 and set a
target of increasing infrastructure investment to 9% of the GDP by 2014. Financing
Plan evolved by BK Chaturvedi Committee for balance NHDP works spanning
between 2009 to 2014 is shown below :

Estimated Expenditure Source of Funds

( ` billion ) ( ` billion)
Project Construction : 3379 (41.59%) Cess Funds : 3606 (38.56%)
**Annuity Payments : 2075 (25.54%) Grants and Loans : 97 (1.05%)
Interest on Borrowings : 782 (9.63%) Toll Revenue Net surplus : 1174
(12.56%)
Repayment of Borrowings : 1888 (23.24%) Negative Grant : 33 (0.35%)
Budgetary Support : 13 (0.15%)
Addl Budgetary Support : 393 (4.20%)
Share of Private Sector : 2113 (22.60%)
Borrowings : 1919 (20.53%)
Total : 8126 (100%) Total : 9351 (100%)
 175

NHDP Phase I II III IV SARDP-NE SARDP-J&K

**Annuity ( ` billion) 86 319 462 844 97 265

For the development of Interstate Highways in USA, American Congress

provided revenues from the Federal Gasoline tax to the extent of 90% of the cost of
construction with the states picking up the remaining 10 percent. In the Indian context
also, initially NHDP phase-I was financed mostly from the petroleum cess and
reasonable success of GQ (though some delay noticed in its completion) can be
attributed to uninterrupted source of its financing through cess and borrowings.
However inordinate delays in later phases of NHDP from phase-II onwards owes to
excessive dependence on private sector participation including foreign capital and in
the event of its poor response in a developing economy like India.

On perusal of source of funding proposed by BK Chaturvedi Committee, nearly

40% of financing of NHDP is from cess revenues alone and any further increase in cess
revenues may be met with stiff resistance from Opposition. The share of private sector
and toll revenues is purely dependent on the response from concessionaires and general
economic scenario respectively, thus filled with some sort of uncertainty. Same is the
case with borrowings from multi-lateral funding agencies as World Bank, ADB, JBIC
etc which has reached a saturation limit of around ` 2000 billion. In this scenario, give
a rough assessment of fund mobilisation on certain innovative modes of funding
suggested as under :
ƒ Beneficiary Participation – Working Group on Roads for 11th Five Year Plan
(2007-2012) as constituted by Planning Commission (Transport Division) in their
report (Apr 2007) has suggested that some funds can be tapped from beneficiaries
for projects linking Special Economic Zones (SEZs), satellite towns, ports, power
plants, steel plants and other industries.
[ ` 4000 billion / ` 3000 billion / ` 2000 billion / ` 1000 billion / ` 500 billion /
< ` 500 billion / No idea ]

ƒ Corpus Fund generated from development of land adjoining to highways on the

pattern of disposal of prime Railway land figured in Rail Budget and ongoing six
lane highway from Greater Noida to Agra developed by Jaypee’s Yamuna
 176

Expressway Authority (YEA). The huge appreciation in land prices can be made
out from the fact that the land was acquired at ` 700 per sq.m whereas YEA is
venturing residential plots adjacent to expressway @ ` 4750 / sq.m i.e., almost
500% after accounting for incidental expenditure on development.
[ ` 4000 billion / ` 3000 billion / ` 2000 billion / ` 1000 billion / ` 500 billion /
< ` 500 billion / No idea ]
ƒ Any other source of funding, according to you... so as to avoid further delays since
completion schedules already shifted by 3 years as per the revised strategy
formulated by BK Chaturvedi committee of 2009.
ƒ Our country spends only about 6% of GDP on infrastructure when China is
spending about 20%. Does India has the means and will to enhance the investment
on highway construction on par with China ?
Means Yes No
Yes No
Will No Yes

7. Foreign Direct Investment (FDI) – Shri Kamal Nath, the Minister of Road
Transport and Highways is actively pushing for mega projects to attract global players.
These mega projects will build highways of over 500 km, involving contracts worth `
40 - 50 billion and a concession period ranging between 30 to 50 years. Mega road
projects demand huge investments, high experience, latest technologies and innovative
approach. All these factors have definitely created a huge opportunity for foreign
contractors and investors to enter the lucrative Indian highways sector, which in turn
will spur infrastructure growth in the country. Moreover, the Minister’s announcement
that the foreign players will have to engage Indian firms for the projects has given the
sector an additional boost since it would pave way for key learning session for Indian
Companies under Joint Venture. Now, tell me your opinion on the success of these
mega projects by quoting the relevant figure as per the ‘degree of success’ scale given
below.

Highly Successful Average Not Not even take

Successful Success Successful off
5 4 3 2 1
 177

x Initially, the Ministry of Road Transport and Highways planned to take up the six-
laning of the 558 km Kishangarh-Udaipur-Ahmedabad section for an estimated cost
of ` 42.84 billion and a concession period of 30 to 50 years. What is your
expectations on the success of this project ? [ ]
x Predictions for such mega projects in future ? [ ]

8. India vs China - Construction of expressways began in 1988 in Peoples Republic of

China which had just 147 kms of free way. The rapid pace with which expressways
were added can be gauged from the following table :
Year

1989

1990

1995

1997

1998

1999

2000

2001

2002

2005

2007

2008
Length

11605

16314

19453

34300

45339

53913
(kms)

1603

3422

4771

8733
147

271

The unprecedented expansion in the expressway network was accompanied by

continuing development of intermediate class I and II roads. Why couldn’t India
emulate Chinese success story and what in your opinion are major hurdles in this
direction?
ƒ Democratic political structure [Yes / No / Can’t Say]
ƒ Lack of political will [Yes / No / Can’t Say]
ƒ Inadequate financial outlays [Yes / No / Can’t Say]
ƒ Failure in project implementation [Yes / No / Can’t Say]
ƒ No patriotism to promote ‘India Shining’ concept [Yes / No / Can’t Say]
ƒ Wide spread corruption at all levels [Yes / No / Can’t Say]
ƒ Capacity hiccups to tackle work load [Yes / No / Can’t Say]
ƒ Preconstruction delays as land acquisition etc [Yes / No / Can’t Say]
ƒ No enthusiasm from foreign investors [Yes / No / Can’t Say]
ƒ No effective Dispute Resolution mechanism [Yes / No / Can’t Say]
ƒ Anything else you would like to add ...
 178

9. Capacity Building – In China, many international contracting firms mainly from

Hong Kong, Japan and South Korea were allowed to work on expressway projects only
as a Joint Venture (JV) with local Chinese State Owned Enterprises (SOEs) so that
SOEs could benefit from technology transfer and develop its own capacity. As the
expressway program developed, small entirely private enterprises were spanned from
SOEs which are specialist sub contractors. Such initiative is missing in India for roping
in road construction specialist firms like Border Roads Organisation (BRO) which has
huge presence in remote and far flung disturbed region of North, East and J&K where
NHDP is lagging. Indicate the option you recommend on such initiative in the presence
of capable Indian Public Sector Undertakings (PSUs) like IRCON, MSRDC, UP Bridge
Construction Corporation, MP Road Development Corporation, NPCC, IRCC etc ?

Option 1 – Not possible for such initiative since highway development being carried
out through PPP and these PSUs cannot finance BOT projects on their own without
government budgetary support.
Option 2 – Only possibility for engaging these PSUs in EPC contracts where response
to BOT mode is poor and not many private enterprises are forthcoming.
Option 3 – Compulsory for Consortiums to bid as JV with PSUs similar to China.

10. Ground problems at Construction sites – From the list of constraints generally
faced by construction firms, identify as per the rating scale given below according to
their impact causing delays in development of highways.
Highly Critical High importance Low No impact
critical importance
4 3 2 1 0

ƒ Shortage of constructional material such as cement, bitumen, steel etc. [ ]

ƒ Deficiency of experienced engineers and supervisors. [ ]
ƒ Non-availability/acute shortage of tradesmen such as masons, carpenters, drivers,
welders, operators, electricians etc. [ ]
ƒ Absence of local quarries for stone, sand and shortage of water. [ ]
ƒ Inclement weather/climatic conditions such as rains, floods etc. [ ]
 179

ƒ Security threat to personnel deployed on construction sites [ ]

ƒ Resistance / disturbance from local populace [ ]
ƒ Inordinate delays in LA, utilities shifting, clearances/approvals [ ]
ƒ Hindrance from existing traffic [ ]
ƒ Power cuts, non-availability of equipment spares etc [ ]
ƒ Delay in receipt of approved drawings, payments to contractors etc [ ]
ƒ Rivalry from competing firms [ ]
ƒ Any thing else, you would like to jot down…..

11. Dispute Resolution - The employers representatives are afraid of taking fair and
positive decision due to fear of finance, audit and vigilance or giving room for similar
claim in other contracts for same reasons or because the mistakes committed by the
employer, knowingly or unknowingly, which would reflect back on them. The safe
course of action is hence taken to challenge in arbitration, even if Dispute Resolution
Board (DRB) members are of reputed nature. The arbitration itself has become now-a-
days like a court, taking lot of time for award with more legal people coming and
dragging the matter. Thus the main purpose of settling in arbitration early through
experts is lost. Again in arbitration, if the arbitrator hold the decision like Dispute
Board, again it is challenged in the court repeatedly up to Supreme Court. Once a
matter goes to court, it takes decades for decision, and the relevance of decision is lost.
Per change if any right thinking person takes a decision in favour of DRB or
Arbitrations award, his integrity is doubted. Should Arbitrator’s award be made final
and binding on both the parties without recourse to court of law [Yes/No/Can’t say]

12. Final Say on NHDP - As per the World Bank Report on India’s Road
Construction Industry : Capacity Issues, Constraints and Recommendations (Oct 2009)
ƒ Indian road construction sector is plagued by poor planning and execution,
corruption, and huge time and cost overruns. When the outer limit of extension
for contracts in UK is 25%, it is as high as 70% in India.
ƒ About 40% of road contracts have cost overrun of 25 to 50%.
ƒ 90 billion rupees is locked up in disputes and arbitration.
 180

ƒ Shortage of manpower – India has 110,000 highway engineers compared to more

than 5 lakh in China during their peak highway program i.e.,1989-97.
ƒ Land Acquisition, a big challenge, with most tracts of land in India lacking clear
title deeds and growing opposition from farmers against use of land for industrial
purposes.
ƒ Another major issue is funding. India needs $ 70 billion for building roads over
next three years, and government is expecting atleast 50% from FDI, thus heavy
dependence on foreign investment.
Now tell me, what is your opinion on the achievability of building 20 km of highway
per day as compared to present rate of 2 km/day ?

[ Achievable / Possible only in case of timely corrective actions / Partly Achievable

even with damage control measures / Difficult / Very Difficult / Impossible ]

Name and Address

______________________________________________________________________
______________________________________________________________________
____________

Contact No and email id

______________________________________________________________________
________________________________________

(Don’t fill up particulars in case of official restrictions/personal reasons if any)

 181

APPENDIX 3 - DATA BASE OF ONGOING HIGHWAY PROJECTS

Cost/km (Rs in million)

Anticipated Cost (Rs in

Time Overrun in Mar

Time Overrun in Mar

Original Cost ( Rs in

Cost Overrun (Rs in

Anticipated Date of
Date of Approval

Original Date of
Commisioning

Commisioning

2008 (months)

2010 (months)
Length (km)

million)
billion)

billion)
NHDP
Name of road N
SNo State
stretch H

Lucknow
Uttar Apr Dec Jun-
1 Kanpur Km 25 16 EW 0.51 0.51 32.05 0 78 96
Pradesh -00 -01 08
59.5-75.5
Purnea
Ma
Gayakota Km Apr Mar
2 31 Bihar 15 EW 0.63 0.63 41.99 0 y- 74 98
410-419 & 470- -00 -02
08
476
Mehsi Kotwa Dec Jul- Sep
3 28 Bihar 40 EW 2.39 2.39 59.75 0 50 68
Km 480 - 440 -03 05 -09

Muzzaffarpur
Dec Jul- Sep
4 Mehsi Km 520- 28 Bihar 40 EW 2.75 2.75 68.75 0 50 68
-03 05 -09
480
Purnea
Apr Jul- Sep
5 Gayakota Km 31 Bihar 28 EW 2.06 2.06 73.48 0 50
-00 04 -08
419-447
Bijni-
Assam/WB 31 Dec Jun- Jun-
6 Assam 30 EW 2.30 2.30 76.67 0 48 78
Border Km 30 - C -03 05 09
0
25
Lucknow Uttar Apr Jun- Jun-
7 & 23 EW 1.83 1.86 79.88 30 48 75
Bypass Pradesh -00 04 08
28

Jhansi Bypass Uttar Dec Aug Apr

8 25 13 EW 1.58 1.58 121.54 0 44 58
Km 104 - 91 Pradesh -03 -05 -09

Deesa Ma
Dec 798. Feb
9 Radhanpur Km 14 Gujarat 86 EW 4.00 4.80 46.50 y- 39
-03 5 -05
372 - 458 08
Radhanpur Ma
10 Dec - Feb
10 Gagodhar-V 15 Gujarat EW 4.29 4.10 40.09 y- 39
7 -03 190 -05
Km 138.8 - 245 08
Harangajo
Maibang Km Dec Sep Dec
11 54 Assam 26 EW 2.12 2.12 81.54 0 27
164.08 - -03 -07 -09
190.587
Orai Jhansi Km Uttar Dec Mar Dec
12 25 50 EW 3.40 3.40 68.00 0 21 33
220 - 170 Pradesh -03 -08 -09

Silchar
Dec Sep Jun-
13 Udarband Km 54 Assam 34 EW 1.57 1.55 46.31 -29 21 42
-03 -07 09
309-275
Sonapur
Dec Mar Dec
14 Guwahati Km 37 Assam 19 EW 2.45 2.45 128.95 0 21 33
-03 -08 -09
183 - 163.895
Dharmatul Ma
Dec Dec
15 Sonapur Km 31 Assam 22 EW 1.60 1.60 72.73 0 y- 19 31
-03 -09
205 - 183 08
 182

Original Cost ( Rs in

Anticipated Cost (Rs

Cost Overrun (Rs in

Anticipated Date of

Mar 2008 (months)

Mar 2010 (months)

Date of Approval

Time Overrun in

Time Overrun in
Original Date of
Cost/km (Rs in

Commisioning

Commisioning
Length (km)

in billion)

million)

million)
billion)
NHDP
Name of road
SNo NH State
stretch

Nagaon
Dec Jun- Dec
16 Dharamtul Km 37 Assam 25 EW 2.65 2.65 105.89 0 18 30
-03 08 -09
255 - 230
Gagodhar
Dec Nov Mar
17 Garamore Km 8A Gujarat 36 EW 4.12 4.79 114.44 670 16 31
-03 -07 -09
245 - 281.3

Orai Jhansi Km Uttar Dec Apr Aug

18 25 66 EW 4.52 4.52 68.48 0 16 30
170 - 104 Pradesh -03 -08 -09

Guwahati
Dec Apr Jun-
19 Nalbari Km 31 Assam 28 EW 1.98 1.98 70.71 0 14 32
-03 -08 09
1093 - 1065
Guwahati
Dec Apr Jun-
20 Nalbari Km 31 Assam 28 EW 1.76 1.76 62.86 0 14 47
-03 -08 09
1121 - 1093

Nalbari Bijni Dec Apr Jun-

21 31 Assam 27 EW 2.08 2.08 77.04 0 14 32
Km 1040 - 1013 -03 -08 09

Simrahi
Dec Apr Jun-
22 Ringbund Km 57 Bihar 25 EW 1.01 1.01 40.20 0 14 23
-03 -08 09
190 - 165
Gogunda
Rajasta Dec Aug Sep
23 Udaipur Km 76 31 EW 2.66 2.88 85.81 220 13 28
n -03 -07 -08
104 - 73
Bijni-
Assam/WB 31 Dec Jun- Jun-
24 Assam 30 EW 1.95 1.95 65.00 0 12
Border Km 30 - C -03 08 09
60
Bijni-
Assam/WB 31 Dec Jun- Jun-
25 Assam 33 EW 2.38 2.38 72.06 0 12 42
Border Km 93 - C -03 08 09
60
Dakoba Nagaon Dec Jun- Jun-
26 36 Assam 31 EW 2.25 2.25 73.77 0 12 30
Km 36 - 5.5 -03 08 09

Darbhanga
Dec Jun- Jun-
27 Muzaffarpur 57 Bihar 30 EW 2.92 2.92 97.27 0 12 24
-03 08 09
Km 30 - 0
Darbhanga
Dec Jun- Jun-
28 Muzaffarpur 57 Bihar 40 EW 3.05 3.05 76.25 0 12 24
-03 08 09
Km 70 - 30
Dharmatul
Dec Jun- Jun-
29 Sonapur Km 31 Assam 26 EW 2.00 2.00 78.43 0 12 30
-03 08 09
230.5 - 205

Lanka Daboka Dec Jun- Jun-

30 54 Assam 20 EW 2.25 2.25 112.50 0 12 26
Km 22 - 2.4 -03 08 09

Maibang
Dec Nov Nov
31 Lumding Km 54 Assam 15 EW 1.55 1.55 100.32 0 12 25
-03 -08 -09
111 - 126.45
Maibang
Dec Nov Dec
32 Lumding Km 54 Assam 23 EW 1.67 1.67 72.61 0 12 25
-03 -08 -12
60.5 - 83.4
 183

Cost Overrun (Rs

Date of Approval

of Commisioning
Time Overrun in

Time Overrun in
Anticipated Date
Anticipated Cost

Original Date of
Original Cost (

Cost/km (Rs in

Commisioning
(Rs in billion)
Rs in billion)
Length (km)

in million)

Mar 2008

Mar 2010
(months)

(months)
million)
NHDP
Name of road
SNo NH State
stretch

Nagaon
Byepass Km 36
Dec Jun- Jun-
33 5.5(NH36) to &3 Assam 18 EW 2.30 2.30 127.78 0 12 21
-03 08 09
Km 7
262.7(NH37)
Nalbari Bijni Dec Jun- Jun-
34 31 Assam 30 EW 2.00 2.00 66.67 0 12 25
Km 1013 - 983 -03 08 09

Nalbari Bijni
Dec Jun- Jun-
35 Km 1065 - 31 Assam 25 EW 2.25 2.25 90.00 0 12 30
-03 08 09
1040.3

Nalbari Bijni Dec Jun- Jun-

36 31 Assam 22 EW 1.42 1.42 66.05 0 12 30
Km 983 - 961.5 -03 08 09

Purnea
Dec Apr Apr
37 Forbesganj Km 57 Bihar 62 EW 3.10 3.10 50.00 0 12 24
-03 -08 -09
268-330
Purnea
Dec Apr Apr
38 Forbesganj Km 57 Bihar 41 EW 2.76 2.76 67.32 0 12 24
-03 -08 -09
309-268
Ringbunds
Dec Jun- Jun-
39 Jhanjharpur Km 57 Bihar 45 EW 3.40 3.40 75.56 0 12 24
-03 08 09
155 - 110
Deewanpur
UP/Bihar Dec Oct- Sep
40 28 Bihar 42 EW 3.00 3.00 71.43 0 11 25
Border Km 402 -03 08 -09
- 360
Kotwa Dewapur Dec Oct- Sep
41 28 Bihar 38 EW 2.40 2.40 63.16 0 11 29
Km 440 - 402 -03 08 -09

Raj/MP Border
Rajasta Dec Apr Mar
42 - Kota Km 76 43 EW 2.97 3.59 69.07 620 11
n -03 -08 -09
449.15 - 406
Siliguri
West Dec Jul- Jun-
43 Islampur Km 31 26 EW 2.25 2.25 86.54 0 11 23
Bengal -03 08 09
526 - 500
Garamore
Dec Nov Sep
44 Bamanbore Km 8A Gujarat 72 EW 3.60 3.80 50.00 200 10
-03 -07 -08
254 - 182.6
Harangajo
Dec Feb Dec
45 Maibang Km 54 Assam 14 EW 2.80 2.80 200.00 0 10 22
-03 -09 -09
126.45 - 140.70

Jetpur Bhiladi Dec 108 Nov Sep

46 8B Gujarat 65 EW 4.00 5.09 61.52 10
Km 117 - 52.5 -03 6.1 -07 -08

Jhansi Shivpuri Madhya Dec Feb Dec

47 25 35 EW 2.13 2.13 60.86 0 10
Km 50 - 15 Pradesh -03 -08 -08

Forbesganj
Dec Sep Jun-
48 Simrahi Km 57 Bihar 40 EW 3.33 3.33 83.25 0 9 30
-03 -08 09
230 - 190
Ganga Bridge-
Ramadevi Uttar Dec 466. Sep Jun-
49 Crossing Km 75 -
25 5 EW 1.55 2.02 310.00 9 33
Pradesh -03 6 -08 09
80
 184

Original Date of
Original Cost (

Cost/km (Rs in

Commisioning

Commisioning
Time Overrun

Time Overrun
(Rs in million)
Cost Overrun
Rs in billion)
Length (km)

in Mar 2008

in Mar 2010
Anticipated

Anticipated
Cost (Rs in
Approval

(months)

(months)
million)
Date of

Date of
billion)
NHDP
Name of road
SNo NH State
stretch

Jhajharpur
Dec Sep Jun-
50 Darbanga Km 57 Bihar 40 EW 3.40 3.40 85.00 0 9 39
-03 -08 09
110 - 70
Ayodhya
Uttar Dec Oct- Jun-
51 Lucknow Km 28 42 EW 2.12 2.12 50.48 0 8 24
Pradesh -03 08 09
135 - 93
Ayodhya
Uttar Dec Oct- Jun-
52 Lucknow Km 28 37 EW 1.93 1.93 52.16 0 8
Pradesh -03 08 09
45 - 8
Ayodhya
Uttar Dec Oct- Jun-
53 Lucknow Km 28 48 EW 2.17 2.17 45.21 0 8 24
Pradesh -03 08 09
93 - 45
Bakaria
Rajasta Dec Apr Dec
54 Gogunda KM 76 44 EW 4.57 5.30 103.86 730 8
n -03 -08 -08
73 - 29
Karur Madurai
TamilN Dec Dec Dec
55 Km 373.275 - 7 53 NS 2.84 2.84 53.16 0 0
adu -03 -08 -08
426.60
Gorakhpur
Uttar Dec Oct- Jun-
56 Ayodhya Km 28 44 EW 2.27 2.27 51.59 0 8 26
Pradesh -03 08 09
208 - 164
Gorakhpur
Uttar Dec Oct- Jun-
57 Ayodhya Km 28 43 EW 2.39 2.39 55.58 0 8 24
Pradesh -03 08 09
251 - 208
-
Kota Bypass Rajasta Dec Oct- Jun-
58 76 25 EW 2.75 2.50 110.00 246. 8 20
Km 406 - 381 n -03 08 09
1
Maibang
Dec Apr Dec
59 Lumding Km 54 Assam 21 EW 2.00 2.00 97.56 0 8 20
-03 -09 -09
40 - 60.5
Maibang
Dec Apr Apr
60 Lumding Km 54 Assam 28 EW 2.00 2.00 71.36 0 8 20
-03 -09 -09
83.4 - 111
Raj/MP Border
Rajasta Dec Apr Dec
61 - Kota Km 509 - 76 60 EW 3.78 4.30 63.00 520 8
n -03 -08 -08
449.15
Swaroopganj 76
Rajasta Dec 231. Apr Dec
62 Bakaria Km 29- &1 44 EW 2.20 2.43 50.00 8
n -03 1 -08 -08
0 & 264-249.7 4
Assam/WB
Border - West Dec Nov Jun-
63 31 32 EW 2.22 2.22 69.32 0 7 19
Gairkatta Km Bengal -03 -08 09
255 - 223
Rajasta Dec Feb Sep
64 Chambal Bridge 76 6 EW 2.75 2.81 500.00 63.1 7 10
n -03 -10 -10

Ma
Jhansi Shivpuri Madhya Dec Dec
65 25 41 EW 2.20 2.20 53.66 0 y- 7
Km 91 - 50 Pradesh -03 -08
08
Kasia
Uttar Dec Dec Jun-
66 Gorakhpur Km 28 40 EW 2.42 2.42 60.50 0 6 24
Pradesh -03 -08 09
319.8 - 279.8
 185

Commisioning

Commisioning
Time Overrun

Time Overrun
(Rs in million)
( Rs in billion)

Cost Overrun

Original Date
Original Cost
Length (km)

Cost/km (Rs

in Mar 2008

in Mar 2010
Anticipated

Anticipated
Cost (Rs in

in million)
Approval

(months)

(months)
Date of

Date of
billion)
NHDP
Name of road

of
SNo NH State
stretch

UP/Bihar
Border - Kasia Uttar Dec Dec Jun-
67 28 41 EW 2.27 2.27 55.37 0 6 24
Km 360.9 - Pradesh -03 -08 09
319.8
Chittorgarh
Rajasta Dec Apr Sep
68 Bypass Km 253 76 40 EW 3.84 4.48 96.00 640 5
n -03 -08 -08
- 213
Harangajo
Dec Jul- Dec
69 Maibang Km 54 Assam 24 EW 1.96 1.96 81.67 0 5 41
-03 09 -09
140.7 - 164.08
Kota
Rajasta Dec 631. Apr Sep
70 Chittorgarh Km 76 63 EW 4.41 5.04 69.92 5
n -03 6 -08 -08
316 - 253
Kota
Rajasta Dec Apr Sep
71 Chittorgarh Km 76 65 EW 4.46 5.28 68.62 820 5
n -03 -08 -08
381 - 316
Shivpuri Bypass
upto MP/Raj
Border 25
Uttar Dec Feb Jun-
72 Km 15 - 0 of &7 46 EW 3.60 3.60 78.26 0 4
Pradesh -03 -08 08
NH25 & Km 6
610 - 579 of
NH76
Palanpur
Rajasta Dec Mar Jun-
73 Swaroopganj 14 76 EW 4.98 4.98 65.53 0 3
n -03 -09 09
Km 264 - 340
Raj/MP Border
Rajasta Dec Mar Jun-
74 - Kota Km 579 - 76 70 EW 3.11 3.49 44.43 380 3
n -03 -08 08
509
Bara Orai Km
2& Uttar Dec Apr Apr
75 449-422 & Km 62 EW 4.65 4.65 75.00 0 0 14
25 Pradesh -03 -09 -09
255-220
Brahmaputra
Dec Apr Apr
76 Bridge Km 31 Assam 5 EW 2.18 2.18 435.22 0 0 8
-03 -10 -10
1126 - 1121
Kosi Bridge incl
Dec Mar Mar
77 approaches Km 57 Bihar 10 EW 4.18 4.18 418.00 0 0 15
-03 -10 -10
155 - 165
Rajkot Bypass-
Dec 123 Mar Mar
78 Gondal Jetpur 36 Gujarat 10 EW 2.65 3.88 265.00 0
-03 0 -08 -08
Km 185-175
Siliguri
West Dec Oct- Oct-
79 Islampur Km 31 25 EW 1.55 1.55 62.00 0 0
Bengal -03 08 08
551 - 526
Gorakhpur
Uttar Dec Oct- Jun-
80 Bypass Km 28 28 EW 6.00 6.00 214.37 0 -4 17
Pradesh -03 09 09
251.7 - 279.8
Sunakhala
Apr Apr Dec
81 Ganjam Km 5 Orissa 54 GQ 2.25 2.25 41.67 0 68 90
-00 -04 -09
338-284

Tumkur Bypass Karnata Apr Dec Dec

82 4 13 GQ 0.83 0.83 63.85 0 60 81
Km 75-62 ka -00 -03 -08
 186

Commisioning

Commisioning
Time Overrun

Time Overrun
(Rs in million)
( Rs in billion)

Cost Overrun

Original Date
Original Cost
Length (km)

Cost/km (Rs

in Mar 2008

in Mar 2010
Anticipated

Anticipated
Cost (Rs in

in million)
Approval

(months)

(months)
Date of

Date of
billion)
NHDP
Name of road

of
SNo NH State
stretch

Balasore
Apr Feb Dec
83 Bhadrak Km 5 Orissa 62 GQ 2.27 2.27 36.65 0 58 82
-00 -04 -08
137-199
Bridges
Dhankuni- West Apr Feb Dec
84 6 2 GQ 0.81 0.81 500.00 0 58
Kharagpur Km Bengal -00 -04 -08
17.6-136
Ganjam
Apr Feb Nov
85 Icchapuram Km 5 Orissa 51 GQ 2.63 2.63 51.62 0 57 76
-00 -04 -08
233-284

Etawah Bypass Uttar Apr 426. Oct- Jun-

86 2 15 GQ 0.90 1.32 61.30 56
Km 307.5-321.1 Pradesh -00 8 03 08

Haveri Harihar Karnata Apr Aug Mar

87 4 56 GQ 2.41 2.41 43.04 0 55 71
Km 340 - 284 ka -00 -04 -09

Bhubaneswar
Apr Jan- Jun-
88 Khurda Km 5 Orissa 30 GQ 1.41 1.41 46.95 0 53 74
-00 04 08
388-418

Fatehpur Khaga Uttar Apr Jul- Dec

89 2 77 GQ 3.72 3.72 48.36 0 53 69
Km 38-115 Pradesh -00 04 -08

Hubli Haveri Karnata Apr Dec Mar

90 4 64 GQ 2.61 2.61 40.77 0 51
Km 404 - 340 ka -00 -03 -08

Chitradurga
Karnata Apr Aug Oct-
91 Bypass Km 207 4 18 GQ 1.04 1.04 57.78 0 50 69
ka -00 -04 08
- 189
Bridges
Ma
Balasore- Apr Apr
92 5 Orissa 3 GQ 1.55 1.55 500.00 0 y- 47
Chandikhole -00 -08
04
Km 61-199
Handia Varnasi Uttar Apr Jul- Apr
93 2 72 GQ 2.86 2.86 39.72 0 45
Km 245-317 Pradesh -00 04 -08

Chitradurga
Karnata Apr Aug Apr
94 Sira Km 189- 4 67 GQ 3.04 3.04 45.37 0 44
ka -00 -04 -08
122
Gorhar Barwa
Jharkha Apr Mar Sep
95 Adda Km 320- 2 79 GQ 4.00 4.00 50.60 0 42 63
nd -00 -05 -08
399
Agra
Uttar Apr Mar Jul-
96 Shikohabad Km 2 51 GQ 3.67 3.67 72.06 0 40 69
Pradesh -00 -05 08
200-251
Ma
Etawah Rajpur Uttar Apr Mar
97 2 72 GQ 3.48 3.48 48.39 0 y- 38
Km 321-393 Pradesh -00 -05
08
Varanasi Ma
Uttar Apr Mar
98 Mohania Km 2 12 GQ 4.68 4.68 390.00 0 y- 38 63
Pradesh -00 -05
317-329 08
Kanpur
Uttar Apr Mar Apr
99 Fatehpur Km 2 13 GQ 4.95 4.95 381.04 0 37
Pradesh -00 -05 -08
470-483
 187

Commisioning

Commisioning
Time Overrun

Time Overrun
(Rs in million)
( Rs in billion)

Cost Overrun

Original Date
Original Cost
Length (km)

Cost/km (Rs

in Mar 2008

in Mar 2010
Anticipated

Anticipated
Cost (Rs in

in million)
Approval

(months)

(months)
Date of

Date of
billion)
NHDP
Name of road

of
SNo NH State
stretch

Sasaram Dehri-
Apr Mar Apr
100 on-Sone Km 2 Bihar 30 GQ 2.22 2.22 73.96 0 37
-00 -05 -08
110-140
Shikohabad
Uttar Apr Mar Apr
101 Etawah Km 2 57 GQ 2.61 2.61 45.83 0 37
Pradesh -00 -05 -08
250.5-307.5
Allahabad
Ma
Bypass Uttar Apr Mar
102 2 1 GQ 0.91 0.91 913.60 0 y- 26
Contract-I Km Pradesh -00 -06
08
158-159
Allahabad
Bypass Uttar Apr Dec Jun-
103 2 40 GQ 4.41 4.41 110.23 0 18 36
Contract-II Km Pradesh -00 -06 08
158-198
Allahabad
Ma
Bypass Uttar Apr Jun-
104 2 44 GQ 5.34 5.34 121.45 0 y- 13 31
Contract-III Km Pradesh -00 08
07
198-242
Harihar
Karnata Apr Aug
105 Chitradurga Km 4 77 GQ 3.18 3.18 41.30 0 0 70
ka -00 -04
284 - 207
Jalandar
Mar Feb Nov
106 Amritsar Km 1 Punjab 49 III 2.63 2.63 53.67 0 9 14
-05 -09 -09
407 - 456
Tovaramkurchi
TamilN Dec Aug Jan-
107 Madurai Km 60 64 III 2.63 2.63 41.09 0 4 16
adu -03 -08 08
- 124

Agra Bharatpur Uttar Mar Mar Mar

108 11 46 III 1.95 1.95 42.39 0 0
Km 17 - 63 Pradesh -05 -09 -09

21
Ambala Mar Nov Nov
109 &2 Punjab 36 III 2.98 2.98 82.78 0 0
Zirakpur -05 -08 -08
2

Aurang Raipur Chattis Mar Jan- Jan-

110 6 49 III 1.90 1.90 38.78 0 0 16
Km 232 - 281 garh -05 09 09
Bangalore
Hoskote Karnata Mar Jul- Jul-
111 81 III 5.65 5.65 69.75 0 0 24
Mudbagal Km ka -05 10 10
237 - 318
Bharatpur
Rajasta Mar Jan- Jan-
112 Mahua Km 63 - 11 57 III 2.50 2.50 43.86 0 0
n -05 09 09
120
Elevated
Highway Karnata Mar Jul- Jul-
113 9 III 4.50 4.50 500.00 0 0 18
SilkBoardJn to ka -05 08 08
Electronic City
Gonde Vadape
Mahara 10 Mar Apr Apr
114 (Thane) Km 3 III 5.79 5.79 58.19 0 0 13
shtra 0 -05 -09 -09
440 - 539.5

Madhya Mar Sep Sep

115 Indore Kalaghat 3 80 III 4.72 4.72 59.00 0 0
Pradesh -05 -09 -09

Kondali
Mahara Mar Mar Mar
116 Telegaon Km 6 50 III 2.12 2.12 42.40 0 0
shtra -05 -09 -09
50 - 100
 188

Original Date of
Original Cost (

Cost/km (Rs in

Commisioning
Commisioning

Time Overrun

Time Overrun
(Rs in million)
Cost Overrun
Rs in billion)
Length (km)

in Mar 2008

in Mar 2010
Anticipated

Anticipated
Cost (Rs in
Approval

(months)

(months)
million)
Date of

Date of
billion)
NHDP
Name of road
SNo NH State
stretch

Mar Jun- Jun-

117 Kurali Kiratpur 21 Punjab 61 III 3.09 3.09 50.66 0 0 15
-05 10 10

Mahua Jaipur Rajasta 10 Mar Mar Mar

118 11 III 4.83 4.83 44.72 0 0
Km 120 - 228 n 8 -05 -09 -09

Meerut
Uttar Mar Mar Mar
119 Muzaffarnagar 58 79 III 3.59 3.59 45.44 0 0 15
Pradesh -05 -09 -09
Km 52 - 131
Nagpur
Mahara Mar Dec Dec
120 Kondhali Km 9 6 41 III 1.68 1.68 40.98 0 0 16
shtra -05 -08 -08
- 50
Neelamangala
Jn (NH4) to Karnata Mar Jul- Jul-
121 4 55 III 4.41 4.41 80.00 0 0 30
Devihalli ka -05 10 10
(NH48)
Pondichery TamilN Mar Jul- Jul-
122 40 III 2.85 2.85 71.25 0 0 30
Tindivanam adu -05 20 10

Salem
TamilN 13 Mar Jan- Jan-
123 Ulundrupet Km 68 III 9.41 9.41 69.19 0 0 30
adu 6 -05 11 11
0.313 - 136.67
Sitapur
Uttar Mar Jun- Jun-
124 Lucknow Km 24 75 III 3.22 3.22 42.93 0 0 20
Pradesh -05 09 09
488 - 413
Six Laning
Bangalore Karnata Mar Jul- Jul-
125 7 15 III 1.10 1.10 73.33 0 0
Hosur Km ka -05 08 08
18.75 - 33.51
Thanjavur
TamilN Mar Jun- Jun-
126 Trichy Km 80 - 67 55 III 2.80 2.80 50.91 0 0 12
adu -05 09 09
135

TamilN Mar Jul- Jul-

127 Trichy Dindigul 45 88 III 5.76 5.76 65.25 0 0 16
adu -05 10 10

TamilN Mar Jul- Jul-

128 Trichy Karur 67 80 III 5.16 5.16 64.74 0 0 32
adu -05 10 10

Dhule
Mahara 11 Mar Mar Dec
129 Pimpalgaon Km 3 III 5.56 5.56 48.35 0 -3 12
shtra 5 -05 -09 -08
380 - 265
Madurai
45 TamilN 12 Mar Nov Nov -
130 Tuticorin Km III 6.29 6.29 49.92 0 -5
B adu 6 -05 -10 -10 10
138 - 264

Bangalore Karnata Mar Jul- Jul- -

131 4 20 III 4.45 4.45 228.21 0 -3
Neelamangala ka -05 10 09 12

MO
Service road & Mar Aug Aug
132 Assam 10 RT 0.34 0.34 33.78 0 12
Flyover -05 -07 -08
H
4,5 MO
TamilN Dec Nov Oct-
133 Chennai Bypass &4 32 RT 4.80 4.80 150.00 0 11 31
adu -03 -07 08
5 H
 189

Commisioning

Commisioning
Time Overrun

Time Overrun
(Rs in million)
( Rs in billion)

Cost Overrun

Original Date
Original Cost
Length (km)

Cost/km (Rs

in Mar 2008

in Mar 2010
Anticipated

Anticipated
Cost (Rs in

in million)
Approval

(months)

(months)
Date of

Date of
billion)
NHDP
Name of road

of
SNo NH State
stretch

Improvement of MO
TamilN Jan- Apr Mar
134 Access of GQ 4 4 RT 2.10 2.10 525.00 0 11 44
adu 05 -07 -08
within Chennai H
MO
TamilN Jan- Sep Aug
135 Lalapet ROB 0 RT 0.24 0.24 503.96 0 11
adu 06 -07 -08
H
Trichy Bypass- MO
45 TamilN Dec Aug Mar
136 Tuvaramkurchi 61 RT 2.61 2.61 42.79 0 7 19
B adu -03 -08 -09
Km 0 - 60.95 H
MO
Dhalkola West Mar Aug Aug
137 34 6 RT 0.67 0.67 121.82 0 0 28
Bypass Bengal -06 -08 -08
H
Islam Nagar to MO
Andhra Dec Mar Mar
138 Kadtal Km 230 48 RT 5.46 5.46 113.75 0 0 4
Pradesh -03 -10 -10
- 278 H
Kangayam MO
TamilN Feb Aug Aug
139 Coimbatore Km 55 RT 0.80 0.80 14.46 0 0 18
adu -06 -08 -08
277 - 332 H
Karur MO
TamilN Feb Aug Aug
140 Kangayam Km 59 RT 0.63 0.63 10.64 0 0 14
adu -06 -08 -08
218.2 - 277.4 H
Lumding MO
Dec Aug Aug
141 Daboka Km 44 Assam 22 RT 1.30 1.30 59.09 0 0
-03 -10 -10
- 22 H
NH
MO
Connectivity to Apr Feb Feb
142 SH Kerala 86 RT 5.57 5.57 65.07 0 0 10
JCTT -07 -10 -10
H
Vallarapadam
Haryana Border
- Mukaraba Apr 272. Apr Sep
143 1 Delhi 13 NS 0.71 0.98 55.51 65
Chowk Km -00 2 -03 -08
29.3-16.5
Panchi Gujran
Haryan Apr Sep Sep
144 Sonepat Km 44- 1 22 NS 0.82 0.84 37.27 16.7 60 85
a -00 -03 -08
66
Thumpipadi
TamilN Apr Aug Jun-
145 Salem Km 180- 7 19 NS 0.82 0.82 42.96 0 58 82
adu -00 -03 08
199.2
Nandhi Hills
Karnata Apr Mar Aug
146 Devanahalli Km 7 17 NS 1.72 1.72 101.21 0 53
ka -00 -04 -08
556-539
Kunjwani Jammu
Apr Dec Dec
147 Vijaypur Km 1A & 17 NS 1.10 1.10 64.71 0 48 72
-00 -04 -08
80-97 kashmir
Devdhari
Mahara Dec Jul- Jun-
148 Wadner Km 94- 7 29 NS 1.45 1.45 50.00 0 47
shtra -03 05 09
123

Borkhedi Jam Mahara Dec Jun- Mar

149 7 27 NS 1.10 1.10 40.15 0 45 57
Km 36.6 - 64 shtra -03 05 -09

Devdhari
Mahara Dec Jul- Mar
150 Kelapur Km 7 30 NS 1.44 1.44 48.00 0 44 59
shtra -03 05 -09
123-153
 190

Commisioning

Commisioning
Time Overrun

Time Overrun
(Rs in million)
( Rs in billion)

Cost Overrun

Original Date
Original Cost
Length (km)

Cost/km (Rs

in Mar 2008

in Mar 2010
Anticipated

Anticipated
Cost (Rs in

in million)
Approval

(months)

(months)
Date of

Date of
billion)
NHDP
Name of road

of
SNo NH State
stretch

Jam Wadner Mahara Dec Jul- Mar

151 7 30 NS 1.45 1.45 48.33 0 44 65
Km 64-94 shtra -03 05 -09

Thopurghat Ma
TamilN Dec Sep
152 Thummipadi 7 17 NS 0.93 0.93 55.41 0 y- 40 56
adu -03 -08
Km 163.3-180 05

Butibori ROB Mahara Dec Jun- Sep

153 7 2 NS 0.26 0.26 144.44 0 39 57
Km 22.85-24.65 shtra -03 05 -08

Agra Bypass
Uttar Dec Sep Oct-
154 Km 176/NH2 to 2 39 NS 3.48 3.48 89.23 0 37 41
Pradesh -03 -07 10
Km 13/NH3
Gundla
Pochampally Andhra Apr Dec Dec
155 7 10 NS 0.72 0.72 71.57 0 36 54
Shivrampalli Pradesh -00 -05 -08
Km 464-474
Jammu - Ma
Srinagar Bypass Dec Sep
156 1A & 18 NS 1.25 0.61 70.22 643. y- 28 55
Km 286-303.8 -03 -08
kashmir 4 06
Pathankot Ma
Dec Dec
157 Bhogpur Km 1A Punjab 44 NS 2.84 2.84 64.55 0 y- 19 31
-03 -09
26-70 08
Pathankot Ma
Dec Dec
158 Bhogpur Km 1A Punjab 40 NS 2.29 2.29 57.25 0 y- 19 27
-03 -09
70-110 08
Pathankot J&K Jammu Ma
Dec Dec
159 Border Km 1A & 7 NS 0.98 0.98 136.69 0 y- 19 31
-03 -09
110.45-117.6 kashmir 08
Vijaypur Jammu
Dec Mar Jun-
160 Pathankot Km 1A & 34 NS 1.93 1.93 56.76 0 15 28
-03 -08 09
16.35 - 50 kashmir
Hyderabad
Andhra Dec Sep Sep
161 Bangalore Km 7 40 NS 2.43 2.43 60.85 0 12 21
Pradesh -03 -08 -09
336-376
Vijaypur Jammu
Dec Mar Mar
162 Pathankot Km 1A & 30 NS 1.66 1.66 55.42 0 12
-03 -08 -09
50-80 kashmir
Gorakhpur
Uttar Dec Oct- Jun-
163 Ayodhya Km 28 29 NS 2.05 2.05 70.69 0 8 24
Pradesh -03 08 09
164-135
Rajmarg
Choraha Madhya Dec Oct- Jun-
164 26 54 NS 2.51 2.51 46.49 0 8 32
Lkhnandon Km Pradesh -03 08 09
297-351
Rajmarg
Choraha Madhya Dec Oct- Jun-
165 26 55 NS 2.30 2.30 41.80 0 8 32
Lkhnandon Km Pradesh -03 08 09
351-405.7
Sagar Rajmarg
Madhya Dec Oct- Jun-
166 Choraha Km 26 44 NS 2.03 2.03 46.23 0 8 26
Pradesh -03 08 09
211-255

Sagar Bypass Madhya Dec Oct- Jun-

167 26 24 NS 1.51 1.51 63.04 0 8 26
Km 187-211 Pradesh -03 08 09
 191

Commisioning

Commisioning
Time Overrun

Time Overrun
(Rs in million)
( Rs in billion)

Cost Overrun

Original Date
Original Cost
Length (km)

Cost/km (Rs

in Mar 2008

in Mar 2010
Anticipated

Anticipated
Cost (Rs in

in million)
Approval

(months)

(months)
Date of

Date of
billion)
NHDP
Name of road

of
SNo NH State
stretch

Jammu
Kunjwani Jammu Ma Ma
Dec
168 (Jammu 1A & 15 NS 0.85 0.85 56.89 0 y- y- 7 24
-03
Bypass) Km 0- kashmir 08 09
15
Madurai
TamilN Dec Mar Oct-
169 Kanyakumari 7 40 NS 5.07 5.07 126.87 0 7 25
adu -03 -08 08
Km 120-160
Madurai
TamilN Dec Mar Oct-
170 Kanyakumari 7 38 NS 4.74 4.74 124.79 0 7
adu -03 -08 08
Km 42-80
Madurai
TamilN Dec Mar Oct-
171 Kanyakumari 7 40 NS 3.23 3.23 80.84 0 7 30
adu -03 -08 08
Km 80-120
Madurai
TamilN Dec Mar Oct-
172 Tirunelveli Km 7 42 NS 5.67 5.67 135.09 0 7
adu -03 -08 08
0-42
Kelapur Ma
Mahara Dec Nov
173 Pimpalkatti Km 7 22 NS 1.17 1.17 53.36 0 y- 6 31
shtra -03 -08
153 - 175 09
Tirunelveli
TamilN Dec Mar Sep
174 Panagudi Km 7 43 NS 4.24 4.24 98.50 0 6
adu -03 -08 -08
160-203

Lalitpur Sagar Madhya Dec Oct- Mar

175 26 65 NS 2.25 2.25 34.62 0 5 24
Km 132-187 Pradesh -03 08 -09

Panipat Panchi
Haryan Dec Oct- Mar
176 Gujaran Km 86- 1 20 NS 1.09 1.09 54.50 0 5 26
a -03 08 -09
66
Salem Karur
TamilN Dec Aug Nov
177 Km 258.65 - 7 34 NS 2.06 2.06 60.47 0 3
adu -03 -08 -08
292.6
AP Border
Nandi Hill Karnata Dec Mar Mar
178 7 63 NS 4.03 4.03 63.94 0 0 9
Crossing Km ka -03 -09 -09
464-527
Dholpur
Madhya Dec Sep Sep
179 Morena Km 51- 3 10 NS 2.32 2.32 232.00 0 0 6
Pradesh -03 -10 -10
61
Farukhnagar
Andhra Dec - Feb Feb
180 Kotakotta km 7 46 NS 2.67 2.55 58.09 0
Pradesh -03 122 -09 -09
34-80
Farukhnagar
Andhra Dec - Feb Feb
181 Kotakotta km 7 55 NS 3.14 3.02 57.04 0
Pradesh -03 117 -09 -09
80-135

Gwalior Bypass Madhya Dec Oct- Oct-

182 75 42 NS 3.01 3.01 71.65 0 0 12
Km 0 - 42.033 Pradesh -03 09 09

Gwalior Jhansi Madhya Dec Dec Dec

183 75 80 NS 6.04 6.04 75.50 0 0 24
Km 16 - 96.13 Pradesh -03 -09 -09

Hyderabad -
Andhra Dec Mar Mar
184 Bangalore Km 7 76 NS 6.11 5.92 80.95 194. 0
Pradesh -03 -09 -09
135.47 - 211 4
 192

Original Date of
Original Cost (

Cost/km (Rs in

Commisioning

Commisioning
Time Overrun

Time Overrun
(Rs in million)
Cost Overrun
Rs in billion)
Length (km)

in Mar 2008

in Mar 2010
Anticipated

Anticipated
Cost (Rs in
Approval

(months)

(months)
million)
Date of

Date of
billion)
NHDP
Name of road
SNo NH State
stretch

Hyderabad
Andhra Dec Aug Aug
185 Bangalore Km 7 40 NS 1.95 1.95 48.70 0 0 8
Pradesh -03 -09 -09
211-251
Hyderabad
Andhra Dec Aug Aug
186 Bangalore Km 7 42 NS 2.08 2.08 49.63 0 0 8
Pradesh -03 -09 -09
251 - 293.4
Hyderabad
Andhra Dec Sep Sep
187 Bangalore Km 7 43 NS 2.39 2.39 55.63 0 0 9
Pradesh -03 -09 -09
293 - 336
Hyderabad
Andhra Dec Aug Aug
188 Bangalore Km 7 42 NS 2.06 2.06 49.03 0 0 8
Pradesh -03 -09 -09
376-418
Hyderabad
Andhra Dec Aug Aug
189 Bangalore Km 7 45 NS 2.44 2.44 54.14 0 0 8
Pradesh -03 -09 -09
418-463

Jhansi Lalitpur Uttar Dec Sep Sep

190 26 50 NS 3.55 3.55 71.00 0 0 12
Km 0 - 49.7 Pradesh -03 -09 -09

Jhansi Lalitpur Uttar Dec Sep Sep

191 26 49 NS 2.76 2.76 56.34 0 0 12
Km 49.7 - 99 Pradesh -03 -09 -09

Kadal Armur Andhra Dec Nov Nov

192 7 70 NS 2.71 2.71 38.71 0 0
Km 278-208 Pradesh -03 -09 -09

Krishnagiri
TamilN Dec Dec Dec
193 Thopurghat Km 7 62 NS 3.73 3.73 60.11 0 0
adu -03 -08 -08
94-156
Lakhnandon -
Madhya Dec Jun- Jun-
194 MP/Mah Border 7 50 NS 4.07 4.07 81.40 0 0 12
Pradesh -03 10 10
Km 547-597
Lakhnandon -
Madhya Dec Sep Jun-
195 MP/Mah Border 7 49 NS 2.63 2.63 53.67 0 0 9
Pradesh -03 -09 10
Km 596 -653

Lalitpur Sagar Madhya Dec Nov Nov

196 26 38 NS 1.98 1.98 52.11 0 0 28
Km 94-132 Pradesh -03 -08 -08

Mah/AP Border
Andhra Dec Nov Nov
197 to Islam Nagar 7 55 NS 3.60 3.60 65.45 0 0 4
Pradesh -03 -09 -09
Km 175-230
Sagar Rajmarg
Madhya Dec Oct- Oct-
198 Choraha Km 26 72 NS 2.07 2.07 28.74 0 0 18
Pradesh -03 08 08
225-297
Salem Karur
TamilN Dec Jan- Jan-
199 Km 207.05- 7 42 NS 2.54 2.54 60.97 0 0
adu -03 09 09
248.625
Salem Kerala
Border Km TamilN Dec Dec Dec
200 47 54 NS 4.70 4.70 87.76 0 0 16
203.96(NH7) - adu -03 -08 -08
Km 53(NH4)
Salem Kerala
TamilN Dec Dec Dec
201 Border Km 53- 97 47 NS 3.80 3.80 80.81 0 0
adu -03 -08 -08
100
 193

Commisioning

Commisioning
Time Overrun

Time Overrun
(Rs in million)
( Rs in billion)

Cost Overrun

Original Date
Original Cost
Length (km)

Cost/km (Rs

in Mar 2008

in Mar 2010
Anticipated

Anticipated
Cost (Rs in

in million)
Approval

(months)

(months)
Date of

Date of
billion)
NHDP
Name of road

of
SNo NH State
stretch

Srinagar Bypass Jammu

Dec Dec Dec
202 Km 286-303.8 1A & 17 NS 0.63 0.63 37.04 0 0 24
-03 -08 -08
Phase I kashmir
Thrissur
Dec Mar Mar
203 Angamalli Km 47 Kerala 47 NS 3.13 3.13 66.92 0 0 15
-03 -09 -09
270-316.7
Kadloor
-
Yellareddy Andhra Dec Apr Mar
204 7 80 NS 5.46 4.90 68.27 561. -1
Pochampalli Pradesh -03 -09 -09
5
Km 367-447
Karur Madurai
TamilN Dec Jan- Dec
205 Km 305.6 - 7 68 NS 3.27 3.27 48.12 0 -1
adu -03 09 -08
373.28
Panipat
Elevated Haryan Dec Jan- Jun-
206 1 10 NS 2.70 2.70 270.00 0 -7
Highway Km a -03 09 08
96-86
Kanyakumari
TamilN Dec Sep
207 Panagudi 7 31 NS 1.20 1.20 39.22 0 49
adu -03 -06
Km233.6-203
Chittorgarh 79
Rajasta Oth Mar Aug Jun-
208 Bypass Km 159 &7 54 1.33 1.33 24.63 0 34 50
n er -05 -05 08
- 213 6
Delhi Gurgaon
Haryan 10 Oth Apr 155 Jul- Jan-
209 Expressway Km 8 5.55 7.10 54.95 30
a 1 er -00 0 05 08
143 - 42
Hapur
Uttar Oth Apr Sep Dec
210 Garhmukteswar 24 35 2.20 2.20 62.86 0 15 45
Pradesh er -00 -07 -08
Km 58 - 93
Garhmukteswar
Uttar Oth Apr Sep Jun-
211 Muradabad Km 24 56 2.75 2.75 49.11 0 9 39
Pradesh er -00 -07 08
93 - 149
Tindivanam
TamilN Oth Dec Mar Dec
212 Uiundurpet Km 45 71 4.80 4.80 67.61 0 -3
adu er -03 -09 -08
121 - 192
Ma
Padalur Trichy TamilN Oth Dec Dec
213 45 40 3.20 3.20 80.00 0 y- -5 11
Km 285 - 325 adu er -03 -08
09
Uiundurpet
TamilN Oth Dec Jun- Dec
214 Padalur Km 192 45 93 4.60 4.60 49.46 0 -6
adu er -03 09 -08
- 285

Tuticorin Port TamilN Apr Aug Dec

215 7A 47 Port 2.31 2.31 48.94 0 40
Km 0 - 47.2 adu -00 -06 -09

Ma
Paradip Port Apr Feb
216 5A Orissa 77 Port 4.28 4.28 55.58 0 y- 15
Km 0 - 77 -00 -07
08
Ma Ma
Mahara Apr
217 JNPT Phase II 54 14 Port 1.43 1.43 99.65 0 y- y- 12 29
shtra -00
07 08

Chennai Ennore TamilN Apr Dec Jul-

218 9 9 Port 0.45 0.45 50.32 0 7 7
Expressway adu -00 -07 08
 194

Commisioning
Commisioning

Time Overrun

Time Overrun
(Rs in million)
( Rs in billion)

Cost Overrun

Original Date
Original Cost
Length (km)

Cost/km (Rs

in Mar 2008

in Mar 2010
Anticipated

Anticipated
Cost (Rs in

in million)
Approval

(months)

(months)
Date of

Date of
billion)
NHDP
Name of road

of
SNo NH State
stretch

17
New Mangalore Karnata Apr Jun- Dec
219 &4 37 Port 1.97 1.97 53.11 0 6 24
Port ka -00 08 -08
8

Chennai Ennore TamilN Apr Aug Aug

220 9 15 Port 0.77 0.77 51.20 0 0
Expressway adu -00 -08 -08

Cochin Port Km Apr Aug

221 47 Kerala 10 Port 1.06 1.06 106.00 0 0 44
348 - 358 -00 -06

Haldia Port Km West Apr Mar

222 41 53 Port 2.73 2.73 51.51 0 0 66
53 Bengal -00 -05

Bharuch Surat Ma
Jul- Jul-
223 BOT-II Km 0 - 8 Gujarat 65 V y- 4.92 4.92 75.69 0 0
09 09
65 (6 Laning) 06
Vadodara
Ma
Bharuch BOT-I Jul- Jul-
224 8 Gujarat 84 V y- 6.60 6.60 78.57 0 0
Km 108-192 (6 09 09
06
Laning)

APPX 3 (CONTD)
Delay in Approvals of
Late Conclusion of

Critical Structures

Legal/Court Cases
Design Changes to
Land Acquisition

Poor Contractor

Encroachments
Termination of
Utility Shifting

Law & Order

Performance

Rains/Floods

Tree Felling
ROB/RUB

Structures
Contracts

Contracts

Delayed
Name of road Delay
SNo
stretch Index

Lucknow Kanpur
1 1 1 0.3246
Km 59.5-75.5

Purnea Gayakota
2 Km 410-419 & 470- 0.0000
476

Mehsi Kotwa Km
3 1 0.0926
480 - 440

Muzzaffarpur Mehsi
4 1 1 0.5064
Km 520-480

Purnea Gayakota
5 1 1 0.5047
Km 419-447

Bijni-Assam/WB
6 1 1 0.6098
Border Km 30 - 0

7 Lucknow Bypass 1 1 0.3246

 195

Land Acquisition

Poor Contractor

Late Conclusion

Design Changes

Encroachments
Termination of
Utility Shifting

Law & Order

to Structures
Approvals of
Performance

Rains/Floods
of Contracts

Legal/Court

Tree Felling
ROB/RUB

Structures
Contracts

Delay in

Delayed
Critical

Cases
SNo Name of road stretch Delay Index

Jhansi Bypass Km
8 1 1 1 0.4360
104 - 91

Deesa Radhanpur
9 1 1 0.1775
Km 372 - 458

Radhanpur
10 Gagodhar-V Km 1 1 0.2146
138.8 - 245
Harangajo Maibang
11 Km 164.08 - 1 1 1 1.3489
190.587

Orai Jhansi Km 220

12 1 1 0.2315
- 170

Silchar Udarband
13 1 1 1 1.0581
Km 309-275

Sonapur Guwahati
14 1 1 1 1 1.9672
Km 183 - 163.895

Dharmatul Sonapur
15 1 1 1 1 1.9672
Km 205 - 183

Nagaon Dharamtul
16 1 1 1 1 1.9672
Km 255 - 230

Gagodhar Garamore
17 1 1 0.1775
Km 245 - 281.3

Orai Jhansi Km 170

18 1 1 1 0.4360
- 104

Guwahati Nalbari
19 1 1 1 1 1.9672
Km 1093 - 1065

Guwahati Nalbari
20 1 1 1 1 1.9672
Km 1121 - 1093

Nalbari Bijni Km
21 1 1 1 1 1.9672
1040 - 1013

Simrahi Ringbund
22 1 1 1 0.5880
Km 190 - 165

Gogunda Udaipur
23 1 1 0.0278
Km 104 - 73

Bijni-Assam/WB
24 0.0000
Border Km 30 - 60
 196

Encroachment
Law & Order
Conclusion of

Approvals of
Performance

Rains/Floods
Termination
of Contracts

Legal/Court

Tree Felling
Acquisition

Contractor

Changes to
ROB/RUB

Structures
Structures
Contracts

Delay in

Delayed
Shifting

Critical
Design
Utility

Cases
Land

Poor

Late
SNo Name of road stretch Delay Index

s
Bijni-Assam/WB
25 1 1 1 1 1.9672
Border Km 93 - 60

Dakoba Nagaon Km
26 1 1 0.3657
36 - 5.5

Darbhanga
27 Muzaffarpur Km 30 1 0.4138
-0
Darbhanga
28 Muzaffarpur Km 70 1 1 1 1 0.6335
- 30

Dharmatul Sonapur
29 1 1 1 1 1.9672
Km 230.5 - 205

Lanka Daboka Km
30 1 1 0.3657
22 - 2.4

Maibang Lumding
31 1 0.9091
Km 111 - 126.45

Maibang Lumding
32 1 0.9091
Km 60.5 - 83.4

Nagaon Byepass
33 Km 5.5(NH36) to 1 1 1 1 1.9672
Km 262.7(NH37)

Nalbari Bijni Km
34 1 1 1.2008
1013 - 983

Nalbari Bijni Km
35 1 1 1 1 1.9672
1065 - 1040.3

Nalbari Bijni Km
36 1 1 1 1 1.9672
983 - 961.5

Purnea Forbesganj
37 1 1 0.4971
Km 268-330

Purnea Forbesganj
38 1 1 0.4971
Km 309-268

Ringbunds
39 Jhanjharpur Km 155 1 0.4138
- 110
Deewanpur
40 UP/Bihar Border 1 1 0.1759
Km 402 - 360

Kotwa Dewapur
41 1 1 0.5064
Km 440 - 402

Raj/MP Border -
42 Kota Km 449.15 - 1 1 0.0278
406
 197

Poor Contractor

Late Conclusion

Design Changes

Encroachments
Termination of
Utility Shifting

Law & Order

to Structures
Rains/Floods
Performance

Approvals of
of Contracts

Legal/Court

Tree Felling
Acquisition

ROB/RUB

Structures
Contracts

Delay in

Delayed
Critical

Cases
Land
Delay
SNo Name of road stretch
Index

Siliguri Islampur
43 1 1 0.0000
Km 526 - 500

Garamore
44 Bamanbore Km 254 1 0.0741
- 182.6

Harangajo Maibang
45 1 0.9091
Km 126.45 - 140.70

Jetpur Bhiladi Km
46 1 0.0741
117 - 52.5

Jhansi Shivpuri Km
47 1 1 1 0.1103
50 - 15

Forbesganj Simrahi
48 1 1 1 0.5880
Km 230 - 190

Ganga Bridge-
49 Ramadevi Crossing 0.0000
Km 75 - 80
Jhajharpur
50 Darbanga Km 110 - 1 1 0.5064
70

Ayodhya Lucknow
51 1 1 0.4167
Km 135 - 93

Ayodhya Lucknow
52 0.0000
Km 45 - 8

Ayodhya Lucknow
53 0.0000
Km 93 - 45

Bakaria Gogunda
54 1 0.0000
KM 73 - 29

Karur Madurai Km
55 0.0000
373.275 - 426.60

Gorakhpur Ayodhya
56 1 0.1481
Km 208 - 164

Gorakhpur Ayodhya
57 1 0.1481
Km 251 - 208

Kota Bypass Km
58 1 1 0.0278
406 - 381

Maibang Lumding
59 1 0.9091
Km 40 - 60.5
 198

Encroachment
Law & Order
Conclusion of

Approvals of
Performance

Rains/Floods
Termination
of Contracts

Legal/Court

Tree Felling
Acquisition

Contractor

Changes to
ROB/RUB

Structures
Structures
Contracts

Delay in

Delayed
Shifting

Critical
Design
Utility

Cases
Land

Poor

Late
SNo Name of road stretch Delay Index

s
Maibang Lumding
60 1 0.9091
Km 83.4 - 111

Raj/MP Border -
61 Kota Km 509 - 1 1 0.0278
449.15
Swaroopganj
62 Bakaria Km 29-0 & 1 0.0278
264-249.7
Assam/WB Border -
63 Gairkatta Km 255 - 0.0000
223

64 Chambal Bridge 1 0.0000

Jhansi Shivpuri Km
65 1 1 1 0.1103
91 - 50

Kasia Gorakhpur
66 0.0000
Km 319.8 - 279.8

UP/Bihar Border -
67 Kasia Km 360.9 - 0.0000
319.8

Chittorgarh Bypass
68 1 0.0278
Km 253 - 213

Harangajo Maibang
69 1 1 1.0572
Km 140.7 - 164.08

Kota Chittorgarh
70 1 0.0000
Km 316 - 253

Kota Chittorgarh
71 1 1 0.0278
Km 381 - 316
Shivpuri Bypass
upto MP/Raj Border
72 Km 15 - 0 of NH25 0.0000
& Km 610 - 579 of
NH76
Palanpur
73 Swaroopganj Km 1 0.0000
264 - 340

Raj/MP Border -
74 1 0.0000
Kota Km 579 - 509

Bara Orai Km 449-

75 0.0000
422 & Km 255-220

Brahmaputra Bridge
76 1 0.1481
Km 1126 - 1121
 199

Encroachment
Law & Order
Conclusion of

Approvals of
Performance

Rains/Floods
Termination
of Contracts

Legal/Court

Tree Felling
Acquisition

Contractor

Changes to
ROB/RUB

Structures
Structures
Contracts

Delay in

Delayed
Shifting

Critical
Design
Utility

Cases
Land

Poor

Late
SNo Name of road stretch Delay Index

s
Kosi Bridge incl
77 approaches Km 155 1 1 0.4508
- 165
Rajkot Bypass-
78 Gondal Jetpur Km 0.0000
185-175

Siliguri Islampur
79 0.0000
Km 551 - 526

Gorakhpur Bypass
80 1 0.1481
Km 251.7 - 279.8

Sunakhala Ganjam
81 1 1 1 0.3834
Km 338-284

Tumkur Bypass Km
82 1 1 1 0.2274
75-62

Balasore Bhadrak
83 1 1 1 0.3834
Km 137-199

Bridges Dhankuni-
84 Kharagpur Km 1 1 0.0773
17.6-136

Ganjam Icchapuram
85 1 1 0.3279
Km 233-284

Etawah Bypass Km
86 1 1 0.3246
307.5-321.1

Haveri Harihar Km
87 0.0000
340 - 284

Bhubaneswar
88 Khurda Km 388- 1 1 1 0.3834
418

Fatehpur Khaga Km
89 1 0.1481
38-115

Hubli Haveri Km
90 0.0000
404 - 340

Chitradurga Bypass
91 1 0.1765
Km 207 - 189

Bridges Balasore-
92 Chandikhole Km 0.0000
61-199

Handia Varnasi Km
93 1 1 0.3527
245-317

Chitradurga Sira
94 1 1 0.0598
Km 189-122
 200

Encroachment
Law & Order
Conclusion of

Approvals of
Performance

Rains/Floods
Termination
of Contracts

Legal/Court

Tree Felling
Acquisition

Contractor

Changes to
ROB/RUB

Structures
Structures
Contracts

Delay in

Delayed
Shifting

Critical
Design
Utility

Cases
Land

Poor

Late
SNo Name of road stretch Delay Index

s
Gorhar Barwa Adda
95 1 1 1 1 0.1006
Km 320-399

Agra Shikohabad
96 1 1 1 0.6860
Km 200-251

Etawah Rajpur Km
97 0.0000
321-393

Varanasi Mohania
98 1 1 1 0.4360
Km 317-329

Kanpur Fatehpur
99 1 1 0.3527
Km 470-483

Sasaram Dehri-on-
100 0.0000
Sone Km 110-140

Shikohabad Etawah
101 1 1 1 1 0.6125
Km 250.5-307.5

Allahabad Bypass
102 Contract-I Km 158- 1 1 0.2315
159
Allahabad Bypass
103 Contract-II Km 158- 1 0.1481
198
Allahabad Bypass
104 Contract-III Km 1 1 1 1 0.7694
198-242

Harihar Chitradurga
105 1 0.1765
Km 284 - 207

Jalandar Amritsar
106 0.0000
Km 407 - 456

Tovaramkurchi
107 Madurai Km 60 - 1 0.2593
124

Agra Bharatpur Km
108 0.0000
17 - 63

109 Ambala Zirakpur 1 0.0000

Aurang Raipur Km
110 0.0000
232 - 281

Bangalore Hoskote
111 Mudbagal Km 237 - 0.0000
318

Bharatpur Mahua
112 1 0.0000
Km 63 -120
 201

Approvals of
Performance

Rains/Floods
Termination

Encroachme
of Contracts

of Contracts

Legal/Court

Tree Felling
Acquisition

Conclusion
Contractor

Changes to
ROB/RUB

Structures
Structures
Delay in

Delayed
Shifting

Critical
Law &

Design
Utility

Order

Cases
Land

Poor

Late

nts
SNo Name of road stretch Delay Index

Elevated Highway
113 SilkBoardJn to 0.0000
Electronic City
Gonde Vadape
114 (Thane) Km 440 - 0.0000
539.5

115 Indore Kalaghat 0.0000

Kondali Telegaon
116 0.0000
Km 50 - 100

117 Kurali Kiratpur 0.0000

Mahua Jaipur Km
118 1 0.0000
120 - 228

Meerut
119 Muzaffarnagar Km 1 0.1481
52 - 131

Nagpur Kondhali
120 0.0000
Km 9 - 50

Neelamangala Jn
121 (NH4) to Devihalli 0.0000
(NH48)

Pondichery
122 0.0000
Tindivanam

Salem Ulundrupet
123 0.0000
Km 0.313 - 136.67

Sitapur Lucknow
124 0.0000
Km 488 - 413

Six Laning
125 Bangalore Hosur 0.0000
Km 18.75 - 33.51

Thanjavur Trichy
126 1 0.2593
Km 80 -135

127 Trichy Dindigul 0.0000

128 Trichy Karur 0.0000

Dhule Pimpalgaon
129 0.0000
Km 380 - 265

Madurai Tuticorin
130 1 0.2593
Km 138 - 264
 202

Encroachment
Law & Order
Conclusion of

Approvals of
Performance

Rains/Floods
Termination
of Contracts

Legal/Court

Tree Felling
Acquisition

Contractor

Changes to
ROB/RUB

Structures
Structures
Contracts

Delay in

Delayed
Shifting

Critical
Design
Utility

Cases
Land

Poor

Late
SNo Name of road stretch Delay Index

s
Bangalore
131 0.0000
Neelamangala

Service road &

132 1 1 0.3657
Flyover

133 Chennai Bypass 1 1 0.2150

Improvement of
134 Access of GQ 1 1 0.2033
within Chennai

135 Lalapet ROB 0.0000

Trichy Bypass-
136 Tuvaramkurchi Km 1 1 0.4028
0 - 60.95

137 Dhalkola Bypass 0.0000

Islam Nagar to
138 Kadtal Km 230 - 0.0000
278
Kangayam
139 Coimbatore Km 277 0.0000
- 332

Karur Kangayam
140 0.0000
Km 218.2 - 277.4

Lumding Daboka
141 1 0.9091
Km 44 - 22

NH Connectivity to
142 0.0000
JCTT Vallarapadam

Haryana Border -
143 Mukaraba Chowk 1 0.0185
Km 29.3-16.5

Panchi Gujran
144 1 1 0.0773
Sonepat Km 44-66

Thumpipadi Salem
145 1 1 0.4028
Km 180-199.2

Nandhi Hills
146 Devanahalli Km 0.0000
556-539

Kunjwani Vijaypur
147 0.0000
Km 80-97

Devdhari Wadner
148 1 1 0.0732
Km 94-123
 203

Encroachment
Law & Order
Conclusion of

Approvals of
Performance

Rains/Floods
Termination
of Contracts

Legal/Court

Tree Felling
Acquisition

Contractor

Changes to
ROB/RUB

Structures
Structures
Contracts

Delay in

Delayed
Shifting

Critical
Design
Utility

Cases
Land

Poor

Late
SNo Name of road stretch Delay Index

s
Borkhedi Jam Km
149 1 1 1 0.0732
36.6 - 64

Devdhari Kelapur
150 1 0.0278
Km 123-153

Jam Wadner Km
151 1 1 1 0.0732
64-94

Thopurghat
152 Thummipadi Km 1 1 0.4028
163.3-180

Butibori ROB Km
153 1 0.0000
22.85-24.65

Agra Bypass Km
154 176/NH2 to Km 0.0000
13/NH3
Gundla
Pochampally
155 1 1 0.0773
Shivrampalli Km
464-474
Srinagar Bypass Km
156 1 1 0.1780
286-303.8

Pathankot Bhogpur
157 1 1 0.0732
Km 26-70

Pathankot Bhogpur
158 1 1 0.0732
Km 70-110

Pathankot J&K
159 Border Km 110.45- 1 1 1 1 0.2706
117.6

Vijaypur Pathankot
160 1 1 1 0.4141
Km 16.35 - 50

Hyderabad
161 Bangalore Km 336- 0.0000
376

Vijaypur Pathankot
162 1 1 0.1919
Km 50-80

Gorakhpur Ayodhya
163 1 0.0833
Km 164-135

Rajmarg Choraha
164 Lkhnandon Km 0.0000
297-351
Rajmarg Choraha
165 Lkhnandon Km 0.0000
351-405.7
 204

Encroachment
Law & Order
Conclusion of

Approvals of
Performance

Rains/Floods
Termination
of Contracts

Legal/Court

Tree Felling
Acquisition

Contractor

Changes to
ROB/RUB

Structures
Structures
Contracts

Delay in

Delayed
Shifting

Critical
Design
Utility

Cases
Land

Poor

Late
SNo Name of road stretch Delay Index

s
Sagar Rajmarg
166 Choraha Km 211- 0.0000
255

Sagar Bypass Km
167 0.0000
187-211

Jammu Kunjwani
168 (Jammu Bypass) 1 1 0.3586
Km 0-15
Madurai
169 Kanyakumari Km 1 1 0.4028
120-160
Madurai
170 Kanyakumari Km 1 1 1 0.6620
42-80
Madurai
171 Kanyakumari Km 1 1 1 0.6620
80-120

Madurai Tirunelveli
172 1 1 0.4028
Km 0-42

Kelapur Pimpalkatti
173 0.0000
Km 153 - 175

Tirunelveli
174 Panagudi Km 160- 1 1 0.4028
203

Lalitpur Sagar Km
175 0.0000
132-187

Panipat Panchi
176 1 1 0.0366
Gujaran Km 86-66

Salem Karur Km
177 0.0000
258.65 - 292.6

AP Border Nandi
178 Hill Crossing Km 1 0.0370
464-527

Dholpur Morena
179 0.0000
Km 51-61

Farukhnagar
180 0.0000
Kotakotta km 34-80

Farukhnagar
181 Kotakotta km 80- 0.0000
135

Gwalior Bypass Km
182 0.0000
0 - 42.033

Gwalior Jhansi Km
183 0.0000
16 - 96.13
 205

Encroachment
Law & Order
Conclusion of

Approvals of
Performance

Rains/Floods
Termination
of Contracts

Legal/Court

Tree Felling
Acquisition

Contractor

Changes to
ROB/RUB

Structures
Structures
Contracts

Delay in

Delayed
Shifting

Critical
Design
Utility

Cases
Land

Poor

Late
SNo Name of road stretch Delay Index

s
Hyderabad
184 Bangalore Km 0.0000
135.47 - 211
Hyderabad
185 Bangalore Km 211- 0.0000
251
Hyderabad
186 Bangalore Km 251 - 0.0000
293.4
Hyderabad
187 Bangalore Km 293 - 0.0000
336
Hyderabad
188 Bangalore Km 376- 0.0000
418
Hyderabad
189 Bangalore Km 418- 0.0000
463

Jhansi Lalitpur Km
190 0.0000
0 - 49.7

Jhansi Lalitpur Km
191 0.0000
49.7 - 99

Kadal Armur Km
192 0.0000
278-208

Krishnagiri
193 Thopurghat Km 94- 0.0000
156
Lakhnandon -
194 MP/Mah Border 0.0000
Km 547-597
Lakhnandon -
195 MP/Mah Border 0.0000
Km 596 -653

Lalitpur Sagar Km
196 0.0000
94-132

Mah/AP Border to
197 Islam Nagar Km 0.0000
175-230
Sagar Rajmarg
198 Choraha Km 225- 0.0000
297

Salem Karur Km
199 0.0000
207.05-248.625
Salem Kerala
Border Km
200 0.0000
203.96(NH7) - Km
53(NH4)
 206

Encroachment
Law & Order
Conclusion of

Approvals of
Performance

Rains/Floods
Termination
of Contracts

Legal/Court

Tree Felling
Acquisition

Contractor

Changes to
ROB/RUB

Structures
Structures
Contracts

Delay in

Delayed
Shifting

Critical
Design
Utility

Cases
Land

Poor

Late
SNo Name of road stretch Delay Index

s
Salem Kerala
201 0.0000
Border Km 53-100

Srinagar Bypass Km
202 1 1 0.1780
286-303.8 Phase I

Thrissur Angamalli
203 0.0000
Km 270-316.7

Kadloor Yellareddy
204 Pochampalli Km 0.0000
367-447

Karur Madurai Km
205 0.0000
305.6 - 373.28

Panipat Elevated
206 0.0000
Highway Km 96-86

Kanyakumari
207 Panagudi Km233.6- 1 1 0.3987
203

Chittorgarh Bypass
208 0.0000
Km 159 - 213

Delhi Gurgaon
209 Expressway Km 0.0000
143 - 42
Hapur
210 Garhmukteswar Km 1 1 0.2879
58 - 93
Garhmukteswar
211 Muradabad Km 93 - 1 0.2045
149
Tindivanam
212 Uiundurpet Km 121 0.0000
- 192

Padalur Trichy Km
213 0.0000
285 - 325

Uiundurpet Padalur
214 0.0000
Km 192 - 285

Tuticorin Port Km 0
215 1 1 0.3987
- 47.2

Paradip Port Km 0 -
216 1 0.0556
77

217 JNPT Phase II 1 0.0278

Chennai Ennore
218 0.0000
Expressway
 207

Late Conclusion

Design Changes

Encroachments
Termination of
Utility Shifting

Law & Order

to Structures
Approvals of
Performance

Rains/Floods
of Contracts

Legal/Court

Tree Felling
Acquisition

Contractor

ROB/RUB

Structures
Contracts

Delay in

Delayed
Critical

Cases
Land

Poor
SNo Name of road stretch Delay Index

New Mangalore
219 0.0000
Port

Chennai Ennore
220 0.0000
Expressway

Cochin Port Km
221 1 1 0.0773
348 - 358

222 Haldia Port Km 53 1 1 0.0773

Bharuch Surat
223 BOT-II Km 0 - 65 0.0000
(6 Laning)
Vadodara Bharuch
224 BOT-I Km 108-192 0.0000
(6 Laning)
 208

APPENDIX 3A : ASSESSMENT OF TIME OVERRUNS ON VARIOUS HIGHWAY

INFRASTRUCTURE PROJECTS UNDER IMPLEMENTATION
Name of the Department/Ministry : National Highways Authority of India (NHAI)
(Refer Table 3.18 & 3.19 for calculation of Delay Index & Time Overrun in DI Model and Table 3.13 for Project
Cost Model)
S. No. Project Name Depart Estima Struct Date of Likely Remark
ment/ ted ure Award Date s, if any
Agency Cost (BOT, of
(Rs. BOOT, Compl NHDP Time Time
Crore) etc.) etion Phase Overru Overrun
Catego n (months
ry (mont )
Delay hs) [DI [Project
Index model Cost
(DI) ] Model]
(1) (2) (3) (4) (5) (6) (7) (8) (9)

4 Armur to Under
Kadloor Impleme
NHDP
Yellareddy (NS- Feb- ntation
NHAI 390.56 BOT ######## Phase 0.019 9.48 3.649
2/AP-1) 2012
II
(Approved
Length 60.25)
5 Thrissur to Under
NHDP
Angamali (KL-I) Jul- Impleme
NHAI 312.50 BOT Sep-2005 Phase 0.403 50.82 6.65
2011 ntation
II
6 Four laning from Under
MP/Maharashtr Impleme
a border to NHDP ntation
1,170. Oct-
Nagpur I/C NHAI BOT Aug-2009 Phase 0.137 80.28 34.41
52 2012
Kamptee II
Kanoon and
Nagpur bypass
43 Chengapalli to Under
Coimbatore Impleme
Bypass and End NHDP ntation
Mar-
of Coimbatore NHAI 852.00 BOT Jan-2010 Phase 0.437 20.88 7.37
2013
Bypass to II
TN/Kerala
Border
75 Six lanning of Under
Vadakkancherry NHDP Impleme
Aug-
- NHAI 617.00 BOT Feb-2009 Phase ntation 0.019 20.24 1.31
2012
Thrissuresection II

97 Jammu - NHDP Under

Udhampur 1,813. Annuit Jul- Impleme
NHAI Apr-2010 Phase 0.271 34.91 124.05
76 y 2013 ntation
II
100 Chenani-Nashri NHDP Under
2,159. Annuit Jun- Impleme
NHAI ######## Phase 0.435 17.19 141.355
00 y 2015 ntation
II
102 Jhansi to NHDP Under
Lalitpur (NS- Annuit Dec- Impleme
NHAI 355.06 Apr-2006 Phase 0.769 46.08 33.77
1/BOT/UP-2) y 2011 ntation
II
103 Lakhnadon to Under
NHDP
MP/MH Border Annuit Oct- Impleme
NHAI 263.17 Apr-2006 Phase 0.065 7.65 3.85
(NS-1/BOT/MP- y 2012 ntation
II
2)
105 Gwalior - Jhansi NHDP Under
Annuit Jun- Impleme
NHAI 604.00 ######## Phase 0.11 0.05 18.59
y 2012 ntation
II
115 Gorakhpur NHDP Under
Bypass Annuit Dec- Impleme
NHAI 600.24 Apr-2006 Phase 0.584 37.68 8.7
y 2011 ntation
II
116 Lakhnadon to Under
NHDP
MP/MH Border Annuit Oct- Impleme
NHAI 407.60 Jan-2007 Phase 0.065 7.65 1.39
(NS-1/BOT/MP- y 2012 ntation
II
3)
118 Quazigund- NHDP Under
Banihal 1,987. Annuit Jul- Impleme
NHAI Apr-2010 Phase 0.357 25.62 132.75
00 y 2015 ntation
II
 209

S. No. Project Name Depart Estima Struct Date of Likely Remark Time Time
ment/ ted ure Award Date s, if any Overru Overrun
NHDP
Agency Cost (BOT, of n (months
Phase
(Rs. BOOT, Compl (mont )
Catego
Crore) etc.) etion Delay hs) [DI [Project
ry
Index model Cost
(DI) ] Model]
120 Srinagar to NHDP LOA
Banihal 1,100. Annuit Issued
NHAI Sep-2010 # Phase
70 y
II
121 Kosi Bridge Under
including Impleme
NHDP
approaches and Annuit Dec- ntation
NHAI 418.04 Apr-2006 Phase 0.507 29.57 0.94
Guide Bond & y 2011
II
Afflux Bond (BR-
5)
122 Gwalior Bypass NHDP Under
(NS-1/BOT/MP- Annuit Jun- Impleme
NHAI 300.93 ######## Phase 0.11 0.05 3.22
1) y 2012 ntation
II
127 Jhansi to NHDP Under
Lalitpur (NS- Annuit Aug- Impleme
NHAI 276.09 Apr-2006 Phase 0.11 0.05 3.63
1/BOT/UP-3) y 2011 ntation
II
1 End of Durg Under
Bypass - NHDP Impleme
Jul-
Chattisgarh / NHAI 464.00 BOT Dec-2006 Phase ntation 0.47 0.434
2011
Maharashtra III
Border
2 Kandla - Mundra NHDP Under
Port(Approved NHAI 953.88 BOT Jan-2010 # Phase Impleme
Length 73 Km) III ntation
3 4-lanning of LOA
Kannur NHDP Issued
1,312.
Vengalem NHAI BOT Jul-2009 # Phase
00
Kuttipuram III
(Package -II)
7 Muzaffarnagar - LOA
NHDP
Haridwar Issued
NHAI 754.00 BOT Dec-2009 # Phase
(Approved
III
Length 77 )
8 Meerut- NHDP Under
Muzaffarnagar Jul- Impleme
NHAI 359.00 BOT Mar-2005 Phase 0.584 37.68 18.11
2011 ntation
III
9 Ghaziabad-
NHDP
Aligarh 1,141.
NHAI BOT Dec-2009 # Phase
(Approved 00
III
Length 106 )
10 Hyderabad- Under
NHDP
Yadgiri May- Impleme
NHAI 388.00 BOT Dec-2009 Phase 0.019 9.48 3.84
(Approved 2012 ntation
III
Length 30)
11 Bhubneshwar- LOA
Puri(Approved NHDP Issued
Length 59 Km) NHAI 500.29 BOT ######## # Phase
III

12 Gonde-Vadape NHAI 579.00 BOT Jun-2005 May- Under

NHDP
(Thane) 2011 Impleme
Phase 0.069 44.45 10.5
ntation
III
13 4/6 Laning of LOA
Maharastra/Goa NHDP Issued
1,872.
Border - Panaji NHAI BOT ######## # Phase
00
Goa/KNT Border III

15 Pondicherry - Under
NHDP
Tindivanam Jul- Impleme
NHAI 285.00 BOT Mar-2007 Phase 0.426 21.27 7.37
2011 ntation
III
16 Trichy - Karur Under
NHDP Impleme
Dec-
NHAI 516.00 BOT Mar-2007 Phase ntation 0.685 12.04 1.366
2011
III
 210

S. No. Project Name Depart Estima Struct Date of Likely Remark Time Time
ment/ ted ure Award Date s, if any Overru Overrun
NHDP
Agency Cost (BOT, of n (months
Phase
(Rs. BOOT, Compl (mont )
Catego
Crore) etc.) etion Delay hs) [DI [Project
ry
Index model Cost
(DI) ] Model]
17 Panji- NHDP LOA
Goa/Karnatka NHAI 471.00 BOT Jan-2010 # Phase Issued
Border III
18 Panipat - NHDP Under
Rohtak(Approve Oct- Impleme
NHAI 807.00 BOT Jan-2010 Phase 0.056 56.94
d Length 73 Km) 2014 ntation
III
19 4 Laning of Barhi LOA
- NHDP Issued
Hazaribagh(Appr NHAI 398.00 BOT ######## # Phase
oved Length 40 III
Km)
21 Patna - NHDP LOA
Bakhtiarpur NHAI 574.00 BOT Dec-2010 # Phase Issued
III
22 4 Laning of Under
Belgaum- Impleme
Khanpur ntation
Section(Km 0.00
to Km 30.00)
and 2 Laning NHDP
Sep-
with paved NHAI 359.00 BOT Jul-2010 Phase 0.111 30.35 34.65
2013
sholuders of III
khanpur-
Knt/Goa
border.(Km
30.00 to Km
84.120)
23 Indore-Jhabua- Under
NHDP
Gujrat/MP 1,175. Apr- Impleme
NHAI BOT Dec-2009 Phase 0.11 0.05 11.65
(Approved 00 2013 ntation
III
Length 168)
24 Zirakpur - NHDP Under
Parwanoo Dec- Impleme
NHAI 295.00 BOT Feb-2007 Phase 0.073 28.96 5.28
2011 ntation
III
25 Pimpalgaon - Under
NHDP
Nasik - Gonde Jul- Impleme
NHAI 940.00 BOT Jan-2009 Phase 0.47 255.78 16.93
2012 ntation
III
26 Tirupati - LOA
Tiruthani - NHDP Issued
Chennai(Approv NHAI 571.00 BOT Apr-2010 # Phase
ed Length 125.5 III
Km)
27 4 Laning of Under
Godhara to Impleme
NHDP
Gujarat /MP ntation
NHAI 785.50 BOT Jan-2010 # Phase
Border(Approve
III
d Length 210
Km)
31 Rohtak - NHDP LOA
Bawal(Approved Nov- Issued
NHAI 650.00 BOT Feb-2010 Phase 0.056 66.93
Length 97 Km) 2013
III
33 Kurali - Kiratpur Under
NHDP Impleme
Jul-
NHAI 309.00 BOT Dec-2006 Phase ntation
2011
III

36 4-lanning of LOA
Kannur NHDP Issued
1,366.
Vengalem NHAI BOT Jul-2009 # Phase
00
Kuttipuram III
(Package -I)
39 Bijapur - Under
Hungund NHDP Impleme
Mar-
Section NHAI 748.00 BOT Feb-2010 Phase ntation 0.111 30.36 31.49
2013
(Approved III
Length 194 Km)
 211

S. No. Project Name Depart Estima Struct Date of Likely Remark Time Time
ment/ ted ure Award Date s, if any Overru Overrun
NHDP
Agency Cost (BOT, of n (months
Phase
(Rs. BOOT, Compl (mont )
Catego
Crore) etc.) etion Delay hs) [DI [Project
ry
Index model Cost
(DI) ] Model]
42 Charthalai- NHDP LOA
ochira 1,535. Issued
NHAI BOT Jan-2010 # Phase
00
III
44 4 Laning of NHDP LOA
Brahampore- NHAI 998.79 BOT Feb-2010 # Phase Issued
Faraka III
45 4 Laning of NHDP LOA
Faraka-Raiganj 1,078. Issued
NHAI BOT Feb-2010 # Phase
84
III
46 4 Laning of NHDP LOA
Raiganj-Dalkola NHAI 580.43 BOT Feb-2010 # Phase Issued
III
47 Hungund- Under
NHDP
Hospet Mar- Impleme
NHAI 946.00 BOT Feb-2010 Phase 0.111 30.36 54.658
(Approved 2013 ntation
III
Length 194 Km)
50 Deoli - Kota NHDP Under
Jul- Impleme
NHAI 593.00 BOT Apr-2010 Phase 0.486 110.75 53
2013 ntation
III
51 KNT/Kerala LOA
Border to NHDP Issued
1,157.
Kanuur NHAI BOT ######## # Phase
16
Section(Approve III
d Length 286.3)
52 Motihari-Raxaul NHDP LOA
(Approved NHAI 375.09 BOT Jan-2011 # Phase Issued
Length 67 Km) III
54 Pune-Sholapur LOA
Pkg-II(Approved NHDP Issued
Length I & II NHAI 835.00 BOT Aug-2009 # Phase
170 Km) III

55 Salem- NHDP Under

Ulundrupet Dec- Impleme
NHAI 941.00 BOT Mar-2007 Phase 0.685 12.04 9.684
(BOT-1/TN-06) 2011 ntation
III
56 Sitapur - NHDP Under
Lucknow Dec- Impleme
NHAI 322.00 BOT Aug-2005 Phase 0.436 30.96 19.553
2011 ntation
III
60 Bareily - LOA
NHDP
Sitapur(Approve 1,046. Issued
NHAI BOT Apr-2010 # Phase
d Length 134 00
III
Km)
61 Trichy - Dindigul NHDP Under
Jul- Impleme
NHAI 576.00 BOT Mar-2007 Phase 0.426 21.27 0.19
2011 ntation
III
62 Madurai- NHDP Under
Arupukottai- Aug- Impleme
NHAI 629.00 BOT Feb-2006 Phase 0.426 21.27 1.57
Tuticorin 2011 ntation
III
65 MP/Maharashtr NHDP Under
a Border-Dhule Jun- Impleme
NHAI 835.00 BOT Jan-2009 Phase 0.137 80.28 23.5
2012 ntation
III
66 Cuddapah- NHDP Under
Mydukur- 1,585. May- Impleme
NHAI BOT Feb-2009 Phase 0.019 9.48 36.35
Kurnool 00 2013 ntation
III
67 Amritsar - Under
NHDP
Pathankot Nov- Impleme
NHAI 705.00 BOT Jul-2009 Phase 0.073 18.95 15.644
(Approved 2012 ntation
III
Length 101Km)
68 Thanjarur - NHDP Under
Trichy Dec- Impleme
NHAI 280.00 BOT Feb-2006 Phase 0.426 21.27 7.5
2011 ntation
III
69 Aurang - Raipur NHDP Under
Oct- Impleme
NHAI 190.00 BOT Mar-2005 Phase 0.073 6.3 5.09
2011 ntation
III
 212

S. No. Project Name Depart Estima Struct Date of Likely Remark Time Time
ment/ ted ure Award Date s, if any Overru Overrun
NHDP
Agency Cost (BOT, of n (months
Phase
(Rs. BOOT, Compl (mont )
Catego
Crore) etc.) etion Delay hs) [DI [Project
ry
Index model Cost
(DI) ] Model]
70 Rimoli - Roxy - LOA
Rajamunda(App NHDP Issued
roved Length NHAI 586.00 BOT Apr-2010 # Phase
163Km) III

71 Four lanning of NHDP LOA

Ludhiyana- NHAI 479.00 BOT Dec-2010 # Phase Issued
Talwandi section III
72 Devihalli- NHDP Under
Hassan(Approve May- Impleme
NHAI 453.00 BOT Apr-2010 Phase 0.037 20.55 3.02
d Length 73 Km) 2013 ntation
III
73 4 Laning of Under
Ahmedabad to NHDP Impleme
1,008.
Godhara NHAI BOT Jan-2010 # Phase ntation
50
(Approved III
Length 210 Km)
74 Neelamangala Under
NHDP
Junction on NH Jul- Impleme
NHAI 441.00 BOT Apr-2007 Phase 0.074 25.45 4.42
4 with NH 48 to 2011 ntation
III
Devihalli
77 Kishangarh- NHDP Under
Ajmer-Beawar May- Impleme
NHAI 795.00 BOT Apr-2009 Phase 0.486 110.75 13
2012 ntation
III
78 Banglore- NHAI 565.00 BOT Feb-2007 Jun- Under
NHDP
Hoskote- 2011 Impleme
Phase 0.074 25.45 10.08
Mudbagal ntation
III
Section
79 Sambalpur- LOA
NHDP
Baragarh- Issued
NHAI 909.00 BOT ######## # Phase
Chattisgarh/Orri
III
sa Border
80 Talegaon- Under
NHDP
Amravat(Approv Nov- Impleme
NHAI 567.00 BOT Aug-2009 Phase 0.137 80.287 4.145
ed Length 2013 ntation
III
58Km)
81 Nagpur - NHDP Under
kondhali Oct- Impleme
NHAI 168.00 BOT Sep-2005 Phase 0.137 80.287 24.58
2011 ntation
III
83 Muradabad- Under
NHDP
Bareily 1,267. Jun- Impleme
NHAI BOT Dec-2009 Phase 0.769 46.08 17.302
(Approved 00 2013 ntation
III
Length 112)
84 Gujarat/Mahara Under
NHDP
shtra Border- 1,509. Sep- Impleme
NHAI BOT Feb-2009 Phase 0.185 30.32 11.69
Surat - Hazira 10 2012 ntation
III
Port Section
85 Kundapur- Under
Surathkal & NHDP Impleme
Mar-
Mangalore- NHAI 671.00 BOT Nov-2009 Phase ntation 0.074 25.45 22.48
2013
KNT/Kerala III
Border
88 Jaipur- Under
NHDP
Reengus(Approv Impleme
NHAI 267.81 BOT Oct-2009 # Phase
ed Length 52.65 ntation
III
Km )
89 Pune-Sholapur Under
Pkg-I(Approved NHDP Impleme
1,110. May-
Length Pkg I & II NHAI BOT Feb-2009 Phase ntation 0.137 80.28 43.241
00 2012
170 Km) III

90 Hyderabad- NHDP Under

Vijayawada 1,740. Oct- Impleme
NHAI BOT ######## Phase 0.019 9.48 20.99
00 2012 ntation
III
91 Delhi/Haryana NHDP Under
Border to Nov- Impleme
NHAI 486.00 BOT Jul-2007 Phase 0.056 56.94 18.53
Rohtak 2011 ntation
III
 213

S. No. Project Name Depart Estima Struct Date of Likely Remark Time Time
ment/ ted ure Award Date s, if any Overru Overrun
NHDP
Agency Cost (BOT, of n (months
Phase
(Rs. BOOT, Compl (mont )
Catego
Crore) etc.) etion Delay hs) [DI [Project
ry
Index model Cost
(DI) ] Model]
93 Panvel-Indapur NHDP LOA
NHAI 942.69 BOT Oct-2010 # Phase Issued
III
94 4 laning of Under
Jetpur-Somnath NHDP Impleme
section of NH- NHAI 828.00 BOT Sep-2010 # Phase ntation
8D (approved III
length 127.6)
95 Jaipur-Tonk - Under
NHDP
Deoli(Approved Dec- Impleme
NHAI 792.06 BOT Oct-2009 Phase 0.153 28.041 12.86
Length 148.77 2012 ntation
III
Km )
96 Kota - Jhalawar NHDP LOA
NHAI 530.01 BOT Apr-2011 # Phase Issued
III
98 Patna- NHDP LOA
Muzzaffarpur Annuit Feb- Issued
NHAI 671.30 Nov-2009 Phase 0.312 45.6 41.67
y 2013
III
99 Barasat - NHDP LOA
Krishnanagar Annuit Issued
NHAI 867.00 Feb-2011 # Phase
y
III
104 khagaria - NHDP LOA
Purnea Annuit Issued
NHAI 664.00 Feb-2011 # Phase
y
III
106 2 Laning of LOA
Mokama- NHDP Issued
Annuit
Munger(Approv NHAI 351.54 ######## # Phase
y
ed Length 70 III
Km)
107 2 Laning of LOA
Muzaffarpur - NHDP Issued
Annuit
Sonbarsa(Appro NHAI 511.54 Jul-2010 # Phase
y
ved Length 89 III
Km)
108 Gopalganj- NHDP LOA
Chappra Annuit Issued
NHAI 325.00 Feb-2011 # Phase
y
III
109 2 Laning of LOA
Forbesganj- NHDP Issued
Annuit
Jogwani(Approv NHAI 73.55 ######## # Phase
y
ed Length 13 III
Km)
110 Krishnanagar - NHDP LOA
Berhampore Annuit Issued
NHAI 702.16 Feb-2011 # Phase
y
III
111 Ranchi - NHDP LOA
Rargaon - 1,479. Annuit Issued
NHAI Mar-2011 # Phase
Jamshedpur 00 y
III
112 Hazaribagh- NHDP Under
Ranchi Annuit Jan- Impleme
NHAI 625.07 Aug-2009 Phase 0.681 15.26
y 2013 ntation
III
113 Reengus - Sikar NHDP Under
Annuit Impleme
NHAI 333.51 Mar-2011 # Phase
y ntation
III
114 Bhopal- NHDP LOA
Sanchi(Approve Annuit Issued
NHAI 209.00 ######## # Phase
d Length 40 Km) y
III
117 4 Laning of LOA
Chappra- NHDP Issued
Annuit
Hajipur(Approve NHAI 575.00 ######## # Phase
y
d Length 153 III
Km)
123 2 Laning of LOA
NHDP
Dindigul- Annuit Issued
NHAI 485.00 ######## # Phase
Perigulam- y
III
Theni-Kumili
 214

S. No. Project Name Depart Estima Struct Date of Likely Remark Time Time
ment/ ted ure Award Date s, if any Overru Overrun
NHDP
Agency Cost (BOT, of n (months
Phase
(Rs. BOOT, Compl (mont )
Catego
Crore) etc.) etion Delay hs) [DI [Project
ry
Index model Cost
(DI) ] Model]
124 Haridwar - LOA
NHDP
Dehradun Annuit Issued
NHAI 478.00 Dec-2009 # Phase
(Approved y
III
Length 69)
126 Two Laning of LOA
Trichy - Issued
Karaikudi and NHDP
Annuit
Trichy NHAI 374.00 ######## # Phase
y
Bypass(Approve III
d Length 100
Km)
32 Khalghat - NHAI 549.00 BOT Oct-2007 May- NHDP Under
MP/Maharashtr 2011 Phase Impleme 0.028 13.91 1.01
a Border III ntation
20 Agra - Aligarh NHDP LOA
NHAI 250.50 BOT Nov-2010 # Phase Issued
IV
28 Kanpur - Kabrai NHDP LOA
NHAI 373.47 BOT Nov-2010 # Phase Issued
IV
29 Raibariely to NHDP LOA
Allahabad NHAI 291.36 BOT Dec-2010 # Phase Issued
IV
30 Aligarh - Kanpur NHDP LOA
NHAI 723.68 BOT Dec-2010 # Phase Issued
IV
101 4 Laning of NHDP Under
Nagpur Betul 2,498. Annuit Aug- Impleme
NHAI ######## Phase 0.083 70.46
76 y 2014 ntation
IV
14 Six Laning of NHDP Under
Hosur- Dec- Impleme
NHAI 535.00 BOT ######## Phase 0.037 20.57 0.87
Krishnagiri 2013 ntation
V
35 Panipat - NHDP Under
Jalandhar (Six 2,288. Nov- Impleme
NHAI BOT Feb-2008 Phase 0.073 18.96
lane) 00 2011 ntation
V
37 Chennai - Tada NHDP Under
(Six lane) Oct- Impleme
NHAI 353.37 BOT Feb-2008 Phase 0.426 21.27 5.59
2011 ntation
V
38 Gurgaon - NHDP Under
Kotputli - Jaipur 1,673. Jun- Impleme
NHAI BOT Feb-2008 Phase 0.153 28.18 53.39
(Six lane) 70 2012 ntation
V
40 Chilkaluripet - NHDP Under
Vijayawada (Six Aug- Impleme
NHAI 572.30 BOT Feb-2008 Phase 0.019 9.48 9.96
lane) 2012 ntation
V
41 Ahmedabad to NHDP LOA
Vadodara 2,125. Issued
NHAI BOT Apr-2011 # Phase
Section 24
V
49 Six Laning of Under
NHDP
Krishnagiri- 1,250. Dec- Impleme
NHAI BOT Mar-2010 Phase 0.204 29.18 17.72
walajhapet 00 2013 ntation
V
section
53 Surat - Dahisar NHDP Under
(Six lane) 1,693. Aug- Impleme
NHAI BOT Feb-2008 Phase 0.111 17.83 16.11
75 2011 ntation
V
57 Six Laning of LOA
Chandikhol- Issued
Jagatpur- NHDP
1,047.
Bhubaneswar(A NHAI BOT Apr-2010 # Phase
00
pproved Length V
61 Km)

58 Pune – NHDP Under

Satara(Approve 1,724. Mar- Impleme
NHAI BOT Jan-2010 Phase 0.137 80.28
d Length 145) 55 2013 ntation
V
 215

S. No. Project Name Depart Estima Struct Date of Likely Remark Time Time
ment/ ted ure Award Date s, if any Overru Overrun
NHDP
Agency Cost (BOT, of n (months
Phase
(Rs. BOOT, Compl (mont )
Catego
Crore) etc.) etion Delay hs) [DI [Project
ry
Index model Cost
(DI) ] Model]
59 Indore- NHDP Under
Dewas(Approve May- Impleme
NHAI 325.00 BOT Mar-2010 Phase 0.073 6.29
d Length 55 Km) 2013 ntation
V
63 Belgaum- Under
NHDP
Dharwad(Appro Jun- Impleme
NHAI 480.00 BOT ######## Phase 0.037 20.55
ved Length 111 2013 ntation
V
Km)
64 Six Laning of NHDP LOA
Nellore- 1,535. Issued
NHAI BOT ######## # Phase
Chilkaluripet 00
V
76 Chitradurga - Under
Tumkur NHDP Impleme
Aug-
Bypass(Approve NHAI 839.00 BOT ######## Phase ntation 0.037 20.55
2013
d Length 145 V
Km)
82 6-Laning of LOA
NHDP
Dhankuni- 1,396. Issued
NHAI BOT Feb-2011 # Phase
Khargpur 18
V
Section
86 Delhi - LOA
NHDP
Agra(Approved 1,928. Issued
NHAI BOT ######## # Phase
Length 180.3 22
V
Km)
87 Samaikhiali- NHDP Under
Gandhidham NHAI 805.39 BOT Jan-2010 # Phase Impleme
V ntation
92 Varanasi- NHDP LOA
Aurangabad 2,848. Issued
NHAI BOT Apr-2010 # Phase
00
V
34 New 4-Lane Under
Elevated Road NHDP Impleme
1,655. Sep-
from Chennai NHAI BOT Jan-2009 Phase ntation 0.204 29.18
00 2013
Port - VII
Maduravoyal
48 Upgradation of Under
NHDP
Hyderabad- Nov- Impleme
NHAI 680.00 BOT Feb-2010 Phase 0.019 9.48
Bangalore 2012 ntation
VII
Section
119 Jorbat-Barapani LOA
Annuit SARDP Issued
NHAI 536.00 ######## #
y -NE

125 Shilong-Bypass LOA

Annuit SARDP Issued
NHAI 226.00 ######## #
y -NE
 216

APPENDIX 4
LAND ACQUISITION : A HISTORICAL PERSPECTIVE
The Fundamental ‘Right to Property’ goes back to the historic objective
resolution of Pandit Jawahar Lal Nehru adopted by the Constituent Assembly on 22nd
January 1947, which inspired the shaping of Indian Constitution through all its
subsequent stages : 'The guarantee and security to all the people of India, justice -
social, economic and political; equality of status of opportunity before the law; freedom
of thought, expression, belief, faith, worship, vocation, association and action, subject
to law and public morality were the objectives for drafting the Constitution.' The
preamble embodied these objectives. The socialistic pattern of society was visible in
the entire document. The word 'socialist' was, however, added to the preamble by 42nd
Amendment Act in 1976. The then Prime Minister Smt. Indira Gandhi explained : “We
have always said that we have our own brand of socialism. We will nationalise the
sectors, where we feel the necessity. Just nationalisation is not our type of socialism”.
The Constitution of 1949 had a threefold provision for safeguarding the right to
0private property [Sunil Ambwani 2007]. It not only guaranteed the right of private
ownership but also right to enjoy and dispose of property free from restrictions other
than reasonable restrictions, as under :
x Art. 19 (1) (f) guaranteed to every citizen the right to acquire any property by any
lawful means such as inheritance, personal earnings or otherwise, and to hold it as
his own and to dispose it freely, limited to such reasonable restrictions, which may
not be in excess of the requirement of the interest of the general public.
x Art.31 (1) guaranteed that no person shall be deprived of his property saved by the
authority of law. Any property seized without proper legal authority was to be
released at the intervention of the Court. A subject could not be deprived of his
property by an executive order.
x Art.31 (2) enjoined that if the State wants to acquire private property, it could do so
by acquisition or requisition for public purpose and by payment to the owner by
fixing the amount or specifying the principle upon it, it is to be determined.

The development of the socialist order by the then government led by Jawahar
Lal Nehru was not possible without vast acquisition of land and for reorganisation of
 217

agricultural holding. The right to property was a serious threat to socialistic pattern of
society. In Kameshwar Vs. State of Bihar (1951), Patna High Court held the Bihar
Land Reforms Act unconstitutional. Allahabad and Nagpur upheld land reforms,
against which appeals were pending in Supreme Court. The Constitution was amended.
Through the first constitutional amendment in 1951, exceptions were added to Art.31
(2) and Art.31A to 31C were inserted. The first amendment also added in 9th Schedule
to the Constitution with reference to Art.31B purportedly to save those legislations
dealing with land reforms, which were struck down by the Court. The amended
Art.31A provided that notwithstanding anything contained in Art.13, no law providing
for acquisition by the State of any estate or any rights, taking over of the management
of any property by the State for a limited period either in public interest, or to secure
proper management of the property, amalgamation of two corporations in public
interest or to secure proper management of any of the corporations, the extinguishment
or modification of any rights of managing agents, secretaries and treasurers etc. and
extinguishment or modification of any rights by virtue of any agreement, lease or
license for searching, or winning, mineral or mineral oil or premature termination or
cancellation of such agreement, lease or license, shall be deemed to be void on the
ground that it is inconsistent with or takes away or approaches any of the rights
conferred by Art.14 or Art.19 of the Constitution of India.

In Shankari Prasad Singh Deo Vs. State of Bihar (1952), Kochunni Vs. State of
Madras (1960) and Sajjan Singh Vs. State of Rajasthan (1965), the Supreme Court
upheld the first amendment and further held that the law, which seeks to deprive a
person of his property must be a valid law, enacted by competent legislature and not in
consistent with any of the fundamental rights guaranteed by Part III of the Constitution.
The Supreme Court, however, noted that if the effect of the amendment made in the
Fundamental Rights on Art.226 is direct and not incidental, different considerations
may perhaps arise. Justice Mudholkar questioned, “it is also a matter of consideration
whether making a change in basic feature of the Constitution can be regarded merely as
an amendment or would it be, in effect rewriting a part of the Constitution, and if the
latter, would it be within the purview of Art.368.” The brute majority of the Congress
Government allowed it to amend the Constitution 41 times, till the promulgation of the
emergency. The 4th, 5th and 25th and then 42nd amendment during the emergency in
 218

1975 put the laws of acquisition of the State or other intermediate interest in land
beyond scrutiny of fundamental rights, the directive principle of state policy or even
basic structure of the Constitution.

Though the legislature was, until the 4th amendment, under constitutional
obligation to pay compensation the adequacy of which was not made questionable by
the 4th amendment (1955) in Art.31 (2). In State of West Bengal Vs. Bela Banerji
(1954), the Supreme Court interpreted the word 'compensation' simplicitor as full
compensation i.e. market value of the property on the date of acquisition. The
Government was not happy as it did not have adequate resources to pay compensation
for all the property, which was to be nationalised. In R.C.Cooper Vs. Union of India
(1970) (the Bank Nationalisation case), the Supreme Court held that the word
'compensation' implied full monetary equivalent of the property taken away from the
owner i.e. market value on the date of acquisition. In I.C. Golak Nath and Ors. Vs.
State of Punjab (1967), a majority of 6:5 overruled Shankari Prasad and Sajjan Singh
holding that constitutional amendment is law within the meaning of Art.30 and if it
takes away or abridges any rights conferred by part III, it is void. The judgment was
made prospective with effect from the date of decision (27th Feb. 1967). Golak Nath
case resulted into :
x 24th amendment (1971) adding Art.13 (4), that the article shall not apply to any
amendment of the Constitution under Art.368 and also amended Art.368 (1) by
adding the word “in exercise of its constituent powers”.
x 25th amendment (1971) amending Art.31 by which the amount fixed for acquisition
could not be challenged on the ground of adequacy in Court and inserted Art.31 (c)
declaring that law securing any of the principle in part 4 shall not be deemed to be
void if it takes away the rights by Art.14 and Art.19, and no law containing such a
declaration will be questioned in Court.
x 26th amendment (1971) omitting Art.291, (privy purses) and Art.362 (right and
privileges of the rulers of the Indian states) and inserted Art.363-A ceasing the
recognition of rulers and abolishing privy purses and 29th amendment (1972)
adding to Kerala Amendment Act in 9th Schedule.
 219

The 24th amendment (1971) made an attempt to supersede Golaknath case

putting the validity of constitutional amendment on the ground that it takes away or
affects fundamental right beyond the pail of judicial scrutiny. This 24th amendment
was challenged in Kesavananda Bharti case (1973) before 13 judges. The majority by
7:6 overruled the 24th amendment. The validity of Clause 4 of Art. 13 was upheld. In
the result the fundamental rights could be amended under Art.368 and the validity
cannot be questioned on the ground that the act invades or encroaches fundamental
rights. The Supreme Court, however, by a judicial innovation structured a 'Basic
Structure Doctrine' and gave to itself power to review whether such an amendment
would be ultra vires as it violates very structure of the Constitution. The Supreme Court
without foreclosing the list of basic structure found following to be life and blood of the
Constitution :
(a) Supremacy of the Constitution.
(b) Rule of law.
(c) The principle of Separation of Powers.
(d) The objectives specified in the Preamble to the Constitution.
(e) Judicial review; Arts.32 and 226.
(f) Federalism.
(g) Secularism.
(h) The sovereign, democratic, republican structure.
(i) Freedom and dignity of the individual.
(j) Unity and integrity of the Nation.
(k) Principle of equality, not every feature of equality, but quintessence of equal justice.
(l) The 'essence' of other Fundamental Rights in Part III.
(m) The concept of social and economic justice-to build a welfare State, Part IV in toto.
(n) The balance between Fundamental Rights and Directive Principles.
(o) The Parliamentary system of government.
(p) The principle of free and fair elections.
(q) Limitations upon the amending power conferred by Art.368.
(r) Independence of the Judiciary.
(s) Effective access to justice.
(t) Powers of the Supreme Court under Arts.32, 136, 141, 142.
 220

(u) Legislation seeking to nullify the awards made in exercise of the judicial power of
the State by Arbitration Tribunals constituted under an Act.”

Applying basic feature doctrine the majority in Kesavananda Bharati held that
second part of Section 3 of the Constitution 25th Amendment Act, 1971 was invalid in
Art.31C, which provided that no law containing a declaration that it is for giving effect
to such policy shall be called in question in any Court on the ground that it does not
give effect to such policy. The 25th Amendment 1971 substituted the word
compensation in Art.31 (2) with the word 'amount' but again the majority of the
Supreme Court reserved an area for judicial intervention in Kesavananda Bharti Vs.
State of Kerala (1973) with the majority of 6:5 that the amount fixed by the legislature
could not be arbitrary or illusory but must be determined by a principle, which is
relevant to the acquisition of the property. The Indira Gandhi Government reacted
sharply by putting specified laws of acquisition of land beyond pail of Art.31 by
engrafting exceptions in Art.31A to 31D, which excluded the obligation to pay any
amount as compensation if such laws related to matters specified in the exceptional
provisions namely, law for acquisition by the State of any estate or other intermediate
interest in land to affect agrarian reforms and to improve the agricultural wealth of the
country as well as social control of the means of production. Art.31A, except certain
clauses of laws, Art. 31B read with 9th Schedule gave blanket cover to certain
enactments, the number of which swelled from 13 to 284 by the year 2000. Art.31C
inserted by 25th amendment (1971) provided that any law, which seeks to implement
the directive in Art. 39 (b) or 39 (c) with a view to plan the socialistic distribution of
wealth and the means of production was not to be void for any inconsistency with
Art.14 or 19.

The decision in Keshavanand held that judicial review is one of the essential
feature of the Indian constitution, which cannot be taken away by amendment under
Art.368 and further held that the immunity to any particular law to implement the
directive in Art. 39 (c) is unconstitutional. The 42nd amendment (1976) was introduced
during the emergency, amended as many as 56 Articles as well as 7th Schedule and
changed the vital principles underlying the 1949 Constitution, including an attempt to
overrule the judgment of this Court nullifying the election of Indira Gandhi enlarged
 221

the scope of Art.31C by including within its protection laws to implement any of the
directive principle in Part IV of the Constitution - not merely Art.39 (b) and (c). The
44th amendment (1978) by the Janata Government, tried to do away with all the harm
that was done to the Constitution by the 42nd amendment, but gave a death blow to the
right of property guaranteed of the Constitution in 1948 in Art. 19 (1) (f) and 31. Art.19
(1) (f) was repealed and Art.31 was taken out of Part III and made Art.300-A. Right of
property is no longer a fundamental right and was substituted as a constitutional right.
An individual's property could be taken away by a public official without legal
authority such a person would not be left with remedies under Art.32 as Art. 300A is
not a fundamental right. A person complaining of any law taking away his right to
property will have to look for his remedies under Art.226 or by an ordinary suit. The
same amendment omitted clause 2 (A) (6), of Art.31 and Clause (2) of Art.31 and
transferred its proviso to Art.30 as Clause (1) (A). The protection under Art.31 to the
laws violating fundamental rights remained to operate as an exception to Art.14 and 19.
Right to compensation to the actual tiller in Art.31 (A) (1), however, has been retained,
even though Art.31 was omitted. The 42nd amendment tried to overreach the
implication of Kesavananda Bharti case and in order to upheld the sovereignty of
Parliament (as constituent body) in Clause (5) of Art.386 declared that “there shall be
no limitation” on the constituent power of the Parliament to amend and such
amendment, shall not be called in any Court on any ground (Clause 4). In Minerva
Mills (1980) case, the Supreme Court by then armed with basic structure doctrine
declared Clause (4) and (5) of Art.368 to be invalid on the ground that these clauses
removed all limitations upon the power of the Parliament to amend the Constitution and
to destroy the right of judicial review, which is “essential feature” or “basic structure”
of the Constitution.
 222

APPENDIX 5
LIST OF PROJECTS DELAYED DUE TO LAND ACQUISITION
S No Name of work Cost Date of Completion
( ` billion) Original Revised
Schedule Schedule
1. Balasore-Bhadrak Km 137-199 (NH5) 2.27 02/2004 12/2008
Orissa
2. Bhubaneshuar-Khudra Km 388-418 1.40 01/2004 06/2008
(NH-5) Orissa.
3. Smakala Ganjam Km 284-338 (NH-5) 2.25 04/2004 12/2009
Orissa.
4. Agra-Shikohabad Km 200-251(NH-2) 3.67 03/2005 07/2008
U.P
5. Vasnasi-Mohania Km 317-329 (NH-2) 4.67 03/2005 05/2008
U.P & Bihar.
6. Gorhar-Barwa Adda Km 320-399 3.99 03/2005 09/2008
(NH-2) Jharkhand
7. Tumkur By Pass Km 62-75 (NH-4) 0.83 12/2003 12/2008
Karnataka.
8. Allabad By Pass Km 158-159 (NH-2) 0.91 03/2006 05/2008
U.P
9. Allabad By Pass Km 198-242 (NH 2) 5.34 05/2007 06/2008
U.P
10. Shikohabad-Etawah Km 250-307 2.61 03/2005 04/2008
(NH-2) U.P
11. Thampipadi-Salem Km 180-199 NH- 0.82 08/2003 06/2008
7) T.N.
12. Thopurghat-Thunpiadi Km 163-180 0.92 05/2005 09/2008
(NH-7) T.N.
13. Borkhedi-Jam Km 36-64 (NH-7) 1.10 06/2005 03/2009
Maharastra.
14. Jam-Wadner Km 64-94 (NH-7) 2.45 07/2005 03/2009
Maharastra.
15. Devdhari- Kelapur Km 123-153 (NH- 1.44 07/2005 03/2009
7) Maharastra.
16. Devdhari-Wadner Km 94-123 (NH-7) 1.45 07/2005 06/2009
Maharastra.
 223

S No Name of work Cost Date of Completion

( ` billion) Original Revised
Schedule Schedule
17. Tirumel-Panagudi Km 160-203 (NH- 4.23 03/2008 2008
7) T.N.
18. Madurai-Kanyakumari Km 120-160 5.07 03/2008 10/2008
(NH-7) T.N.
19. Madurai-Kanyakumari Km 80- 3.23 03/2008 10/2008
120(NH-7) T.N.
20. Madurai-Kanyakumari Km 0-42 (NH- 5.67 03/2008 10/2008
7)T.N.
21. Madurai-Kanyakumari Km 42-80 4.74 03/2008 10/2008
(NH-7) T.N.
22. Pathankot-Bhagpur Km 26-70 (NH-1 2.84 05/2008 12/2009
A) Panjab.
23. Srinagar By Pass Km 286-303 N S 1.25 05/2006 09/2008
Corridor. Phas-ii J & K.
24. Pathankot-J & K Border Km 110-117 0.97 05/2008 12/2009
(NH-1 A) J & K.
25. Gorakpur–Ayodhya Km 164-135 (NH- 2.05 10/2008 06/2009
28) U.P
26. Salam-Karun Km 207-248 (NH -7) 2.53 01/2009 01/2009
T.N.
27. Pathankot-Bhogpur Km 70-110 (NH- 2.29 05/2008 12/2009
1A) Panjab.
28. Panipat-Panchi Gujaran 1.09 10/2008 03/2009

29. Srinagar By Pass Km 286-303.8(NH- 0.62 12/2008 12/2008

1A) Jammu & Kashmir.
30. Silchar-Udarband Km 309-275 1.57 09/2007 06/2009
(Assam).
31. Purnea- Forbesganj Km 309-268 (NH- 2.76 04/2008 04/2009
57) Bihar
32. Purnea- Forbesganj Km 268-230 (NH- 3.10 04/2008 04/2009
57) Bihar.
33. Bijni-Assam/W.B Border Km 0 – 30 2.30 06/2005 06/2009
(NH-30C).
 224

S No Name of work Cost Date of Completion

( ` billion) Original Revised
Schedule Schedule
34. Jhansi By Pass Km 104-91 (NH-25) 1.58 08/2005 04/2009
U.P.
35. Jansi-Shipuri Km 91-50 (NH-25) M.P 2.20 05/2008 12/2008

36. Deelvapur-U.P/Bihar Border Km 402- 3.0 10/2008 09/2009

360 (NH-28) Bihar.
37. Orai-Jhansi Km 170-104(NH-25) U.P. 4.51 04/2008 08/2009

38. Kote-Chittorgarh km 381-316 (NH-76) 4.46 04/2008 09/2008

Raj.
39. Gogunda-Udaipur km 104-73(NH-76) 2.66 08/2007 09/2008
Raj.
40. Swaroop Ganj-Bakaria Km 29-0 & 2.20 04/2008 12/2008
Km 264-249(NH-76 & 14) Raj.
41. Ayodya-Lucknow Km 135-93 (NH- 2.12 10/2008 06/2009
28) U.P.
42. Rj/M.P Border Kota Km 449-406(NH- 2.97 04/2008 03/2009
76) Raj.
43. Rajasthan/M.P Border Kota Km 509- 3.78 04/2008 12/2008
449(NH-76) Raj.
44. Orai-Jhansi km 220-170 3.40 03/2008 12/2009

45. Forbesganj-Simrahi Km 230-190 (NH- 3.32 09/2008 06/2009

57) Bihar.
46. Lanka-Daboka Km 22-24 (NH-54) 2.25 06/2008 06/2009
Assam.
47. Daboka-Nagaon Km 36-5.5(NH-36) 2.25 06/2008 06/2009
Assam.
48. Nagaon By Pass Km 5.5-262(NH-36 2.30 06/2008 06/2009
& 37)Assam.
49. Bijni-Assam/ Bengal Border Km 93- 2.37 06/2008 06/2009
60 NH-31C (Assam)
50. Darbhanga-Muzaffarpur Km 70-30 3.05 06/2008 06/2009
NH-57 (Bihar)
 225

S No Name of work Cost Date of Completion

( ` billion) Original Revised
Schedule Schedule
51. Kota By Pass Km 406-381 NH-76 2.75 10/2008 06/2009
(Rajasthan)
52. Siliguri-Islampur Km 526-500 NH-31 2.25 07/2008 06/2009
(West Bengal)
53. Simrahi-Ringbund Km 190-165 NH- 1.0 04/2008 06/2009
57 (Bihar)
54. Nalbari-Bijni Km 1013-983 NH-31 2.0 06/2008 06/2009
(Assam)
55. Nagaon-Dharanitul Km 255-230 NH- 2.64 06/2008 12/2009
37 (Assam)
56. Sonapur-Guwahati Km 183-163 NH- 2.45 03/2008 12/2009
31 (West Bengal)
57. Guwahati-Nalbari Km 1093-1065 NH- 1.98 04/2008 06/2009
31 (Assam)
58. Nalbari-Bijni Km 1065-1040 NH-31 2.25 06/2008 06/2009
(Assam)
59. Nalbari-Bijni Km 1040-1013 NH-31 2.08 04/2008 06/2009
(Assam)
60. Dharamtul-Sonapur Km 205-183 NH- 1.60 05/2008 12/2009
31 (Assam)
61. Nalbari-Bijni Km 983-961 NH-31 1.42 06/2008 06/2009
(Assam)
62. Dharamtul-Sonapur Km 230-205 NH- 2.0 06/2008 06/2009
31 (Assam)
63. Jansi-Sivpur Km 50-15 NH-25 (M. P.) 2.13 02/2008 12/2008

64. Chittorgarh By Pass Km 253-213 NH- 3.84 04/2008 09/2008

76 (Rajasthan)
65. Harangajo-Maibang Km 164-190 NH- 2.12 09/2007 12/2009
54 (Assam)
66. Guwahati-Nalbari Km 1121-1093 1.75 04/2008 06/2009
(NH-31) Assam.
67. Paradip Port Km 77 (NH-54) Orissa. 4.28 02/2007 05/2008
 226

S No Name of work Cost Date of Completion

( ` billion) Original Revised
Schedule Schedule
68. Jawaharlal Nehru Port Phase-II Km 1.43 05/2007 05/2008
14.35 (NH-54) M.H
69. Chennai- Ennor Expressway 0.45 12/2007 07/2008
Km -9 T.N.
70. Improvement of Access of Go Within 2.10 04/2007 12/2008
Chennai City Km 4 (NH-4)
71. Chennai By Pass Km 32 (NH-4,5 & 4.80 11/2007 10/2008
45) T.N.
72. Trichy By Pass Tuvaravukurchi Km 2.61 08/2008 03/2009
0-60.95-61(NH-45B) T.N.
 227

APPENDIX 6
ENVIRONMENTAL & FOREST CLEARENCES

Development brings about benefits like goods and services to the people
whereas unplanned development leads to deterioration of the environment in which
people are living. Like all infrastructure projects, roads and highways play a major role
in boosting the economy of any country. The construction of roads and highways has
resulted in loss of thousands of square kilometers of forestlands. According to Ministry
of Environment and Forests (MoEF) study, while about 6891 hectares of forestland has
been diverted for the purpose of road construction in the two decades (1980 – 1999),
whereas in a period of mere four years from 1999 to 2003, 7172 hectares of forestland
has been consumed for road construction. This highlights the rapid pace of
development at the cost of depleted forests, which has become an issue confronting
development with environment.

Roads, especially if they pass through wildlife sanctuaries and natural reserves
take its toll on the local ecologies resulting in the loss of lives of wild animals due to
increased accidents. Environmental Impact Assessment (EIA) Notification 1994 has
made it mandatory to obtain prior environmental clearance for new road projects such
as bypasses costing more than ` 500 million and later the ceiling raised to ` 1.0 billion
through 2002 Amendment. As far as the widening of existing roads is concerned as
being done in NHDP, it is to be ensured that the existing alignments do not pass
through ecologically sensitive areas such as national parks, sanctuaries, tiger reserves,
reserve forests etc. It is further stipulated that marginal land acquisition i.e., not
exceeding a total width of 20 metres on either side of the existing alignment is
permitted. Public opinion plays an important role in making the projects people
friendly. The importance of involving the local people in the project planning stage was
recognized by the MOEF and public hearing was made mandatory for projects
attracting the provisions of EIA Notification 1994 vide amendment dated 10th April,
1997. However, public hearing was waived in 2001 amendment but again in the
amendment of 13th June, 2002, it was stated that for highway projects, public hearing
shall be conducted in each district through which the highway passes. In addition to the
environmental clearance, forest clearance from Central Government is also essential for
 228

projects, if the highway requires diversion of forestland. If the project area falls within
a national park or wildlife sanctuary, forest clearance is granted only after it is cleared
by the National Wildlife Board. Till the recent past, environmental issues were waived,
brushing them aside as impediments to economic developments. In the regulations
itself, there are some loopholes. Bypasses often are of short stretches and the costs are
often less than ` 1.0 billion and hence are expensed from the environmental clearances.
However, small projects do have serious consequences on the local
environment. However, in today’s world, when the environmental brigade is gaining
momentum, environmental clearance cannot be done away with. There are quite a
number of road projects that are gathering dust, as they have not been approved
clearance. Such situations can be avoided by the planners and designers right in the
beginning of the project planning stage by selecting alignments, providing bypasses
and detours, so that the impacts on the environment is minimal. As seen, there are quite
a number of regulations, which should be strictly followed to avoid an environmental
catastrophe.

Under Sec 84 of Forest Act 1927, whenever it appears to the State Government
that any land is required for any of the purposes of this Act, such land shall be deemed
to be needed for a public purpose within the meaning of Sec 4 of the Land Acquisition
Act 1894 (1 of 1894). As per Forest (Conservation) Act 1980, all proposals for
diversion of forest land to any non-forest purpose would require the prior approval of
the Central Government. The term forest land refers to reserved forest/protected
forest/or any area recorded as forest in the Government record. The user agency has to
pay Net present Value (NPV) for the forest land to be diverted for non-forest purposes
as calculated by Forest authorities along with specified amount towards compensatory
afforestation etc. The various Forest Acts have devolved lot of stringent powers to its
implementation agencies, even judicial powers to grant penalty including imprisonment
for persons violating the Forest Act which may act as a strong deterrent to erring
officials associated with developmental activities such as road construction.

It was observed that one of the main reasons for delays in projects, especially in
Uttar Pradesh, was problems in land acquisition, forest clearance and shifting of
utilities, while in Madhya Pradesh, the main problem faced by concessionaire was in
 229

obtaining forest clearance and clearance for Pench tiger reserve in Seoni district. The
modalities under the Forest Act had to a great extent made it very difficult for diversion
of forest land for non-forestry purposes. As the Court adopted the dictionary meaning
of forests, it also became mandatory for the state to even protect the standing trees on
private forests. Forest Rights Act (FRA) if implemented, even the government cannot
acquire such declared forest land without the consent of the Gram Sabha. The decision-
making authorities under the Act are clearly spelt out. They are the Gram Sabha / Palli
Sabha, Sub-Divisional Level Committee and the District Level Committee. It must be
noted that the role of the officials is to render proper and timely assistance to these
committees and to ensure custody of the records. No individual officer has been given
the powers under the Act to overrule or object to the decisions of the appropriate
authority, other than filing appeal to the next higher authority as prescribed [Ajit Kumar
Tripathy 2009].
 230

APPENDIX 7
LAND ACQUISITION, REHABILITATION & RESETTLEMENT
BILL 2011
x National Land Acquisition and Rehabilitation & Resettlement Bill 2011 aims to
address rehabilitation and resettlement (R&R) by providing safeguards for both
landowners and livelihood losers while clearly defining the “public purpose” for
which land can be acquired by the government. It also adds a clause prescribing a
specific timeline for compensation.

x A significant addition to the final Bill is the timeline for providing compensation as
well as R&R entitlements to land owners and livelihood losers. Compensation will
have to be given within three months from the date of the award; monetary R&R
entitlements have to be provided within six months.

x Infrastructure R&R benefits will have to be given within 18 months of the award. In
the case of irrigation or hydel projects, R&R should be completed six months prior
to submergence.

x No involuntary displacement can take place without the completion of R&R.

x The Bill also provides for transferring land to the state government if the area is not
used for the purpose it was acquired for within 10 years. The ministry will make
another amendment to the Bill to allow the state to either return the land to its
original owner or use it for any public purpose as defined by the Act.

x While the provision for creating a land bank was introduced, the period was
increased from five to ten years to allow for securing all clearances for a project.

x Other provisions introduced in the bill include tightening the definition of public
purpose, introducing a stage-based retrospective effect clause, removing the blanket
ban on acquisition of multi-crop irrigated land, tightening the urgency clause to
remove the “rarest of rare” provision in which it can be invoked as well as slight
modifications to the R&R package.

x Significantly, compensation in rural areas has been lowered from six times the
original market value to four times, while that in urban areas remains the same at
double the market value.
 231

x Bill will not supersede 16 of the specialized items of legislation on land acquisition,
including those for special economic zones and railways. The Union government,
however, will have the power to apply provisions of this law through a notification.
States will also continue to have their own land acquisition laws, but the new Bill
will provide a minimum compensation and R&R package.
 232

APPENDIX 8
NHDP - SOURCES OF FINANCING
ƒ Revenues from Cess - The cess inflows of ` 32.70 billion for the year 2005-06 are
based on the approved Budget Estimates. For 2006-07, the total inflow calculated
@ ` 2 per litre on diesel and petrol has been estimated at ` 66.91 billion. The
growth rate in cess has been assumed as 3% per annum, based on projected growth
in consumption.

ƒ Surplus from Toll Revenues - An average toll revenue of ` 5.0 million per km and
` 1.8 million per km has been assumed for GQ and NSEW corridor respectively.
The net surplus from toll revenues after adjusting maintenance costs and servicing
of loan component of external assistance can be used for financing of NHDP works.
It was noted that the average toll collection for GQ in 2004-05 was ` 3.0 million per
km and an amount of ` 11 million per km was received in 2005-06 for the NH-8
section of Jaipur-Kishangarh. There is significant scope for additional resource
mobilisation through better toll recovery.

ƒ Additional Budgetary Support - NHDP-I, NHDP-II and NHDP-III did not

envisage any budgetary support other than cess and external assistance. The
proposed financing plan for NHDP as envisaged by Core Group on Financing of
NHDP, a wing of Committtee on Infrastructure (CoI) does not assume any
additional budgetary support except for the North East.

ƒ Borrowings - The shortfall between the inflows from all sources and the projected
outflows, including the payment of annuity, is proposed to be met out of market
borrowings. Market borrowings such as NHAI Infrastructure Bonds would have to
be raised against suitable forms of support or back-stopping by the Finance
Ministry. This may include a commitment that cess revenues at a pre-determined
level would be made available to NHAI and may be suitably assigned for debt
service. Given the size and tenure of borrowings, it would be necessary for the
Ministry of Finance to provide the requisite comfort to lenders so that NHAI is able
to raise the projected borrowings.
 233

ƒ Negative Grants - The country’s private sector seems to have turned bullish on
road development projects in a big way. While the government typically provides
grants in the form of ‘Viability Gap Funding (VGF)’ to make infrastructure projects
feasible for private players, some companies are now saying no to the aid. Instead,
they are offering to pay the government a dedicated sum called a ‘negative grants’
to get contracts for potentially lucrative Build-Operate-Transfer (BOT) toll projects.
In a couple of years, National Highways Authority of India (NHAI) has received
revenues to the tune of ` 20 billion from negative grants as shown below. There is
so much money to be made in these projects that private companies are willing to
pay money to NHAI for getting development rights. NHAI is expected to generate
substantial revenues through such negative grants in the future and the same can
become a reliable source of funding though it may not be a significant amount.

S No Name of Project Length Estimated Negative Grant

(Km) Cost
Amount As % of
( ` billion)
(` Estimated
billion) Cost
NHDP Phase I
1. Delhi-Gurgaon (NH-8) 27.70 7.10 0.61 8.59 %
NHDP Phase II
2. Rajkot Bypass & Gondal- 36.00 3.88 0.59 15.25 %
Jetpur (NH-8B)
3. Farukhanagar to Kottakata 46.16 2.55 0.70 27.59 %
(NH-7)
4. Panipat elevated Highways 10 2.70 0.96 35.70 %
(NH-1)
5. Salem to Karur (NH-7) 41.55 2.53 0.46 18.14 %
6. Krishnagiri to Thopurghat 62.50 3.72 1.40 37.59 %
(NH-7)
7. Thrissur to Angamali (NH- 40 3.12 0.84 27.00 %
47)
8. Tindivinam – Ulundrupet 71.25 4.80 1.52 31.68 %
(NH-45)
 234

S No Name of Project Length Estimated Negative Grant

(Km) Cost Amount As % of
( ` billion) (` Estimated
billion) Cost
NHDP Phase III
9. Guna Bypass (NH-3) 14 0.46 0.19 41.36 %
10. Jalandhar – Amritsar (NH-1 49 2.63 0.06 2.61 %
11. Ambala – Zirakpur (NH- 36 2.98 1.05 35.52 %
21,22)
12. Indore – Khalghat (NH-3) 80 4.72 0.05 1.22 %
13. End of Durg Bypass- 82.69 4.64 0.02 0.4 %
Chattisgarh/ Maharashtra
Border (NH-6)
14. Banglore – Neelmangala 19.50 4.45 0.20 4.49 %
(NH-4)
15. Agra – Bharatpur 45 1.95 0.02 1.47 %
(NH-11)
16. Elevated Highway from Silk 9.98 4.50 0.16 3.55 %
road junction to Electronic
City junction (NH-7)
17. Dhule – Pimpalgaon (NH-3) 118 5.56 0.58 10.58 %
NHDP Phase V
18. Vadodara to Bharuch (NH- 83.30 6.60 4.71 71.36 %
8)
19. Bharuch to Surat 65 4.92 5.04 102.43 %
(NH-8)
Total 3121.6 204.01 19.20

However, under the revised Model Concession Agreement (MCA), projects

under BOT/DBFOT frame work have also been awarded on revenue sharing basis,
where the bidder offering the highest revenue share (subject to technical qualification)
is awarded the project. The government of India has recently announced in the month
 235

of June 2012 stating that the process of giving Viability Gap Funding (VGF) will be
done away with a new scheme wherein concessionaire asking for the lowest concession
period will be declared a winner in the competitive bid. Apart from obviating the
burden of VGF on the government, it will also entail benefit to the users in the form of
lesser tolls since concessionaire with the lowest concession period is preferred in the
selection process of awarding the BOT contract.
Projects awarded on Revenue Share Basis
Road Section Length Estimated Cost Revenue Share (%)
(km) ( ` billion)
Surat-Dahisar 239 26 38
Gurgoan-Jaipur 225 19 48
Panipat-Jalandhar 291 22 20
Chennai-Tada 42 3.17 17
Vijayawada-Chilakaluripet 85 11.73 2

ƒ Special Purpose Vehicle (SPV) - The mandate given to NHAI under the NHAI
Act 1999 provides for it to undertake a number of functions: road development and
safety policy, contracting for road development, financing authority for the inter-
state highways, etc. Therefore, to segregate these functions, the financing for the
NHDP is to be separated into a number of Special Purpose Vehicles (SPVs). The
SPVs will in essence be financing vehicles that will have a limited life till all the
debt raised through them is paid off and these would automatically extinguish
thereafter. Various types of projects – annuity, EPC and BOT can be merged into a
single project to be financed through a particular SPV and large segments of the
roads can be made into a single project and financed through a single SPV [Prithvi
& Praveen 2003]. These SPVs enter into a number of contracts with the various
parties as shown below :

i) with NHAI for land acquisition,

ii) with the civil contractors for road construction and maintenance,

iii) with a specialized agency for toll collection,

iv) with a specialized arm of NHAI (insurance function) to buy political and
traffic insurance,
 236

v) with a Trusteeship company to act as a security trustee and to protect the

ensure that the interests of the investors by ensuring that the SPV functions
as per the mandate at the time of its inception,

vi) with a bank for managing any financial risk that may be present in the
financing structure and for adequate liquidity, and
vii) with a rating agency to rate the various types of instruments to be offered to
the investors to financially participate in the project.

ƒ Foreign Direct Investment (FDI) - The FDI regime has been progressively
liberalized during the course of the 1990s (particularly after 1996) with most
restrictions on foreign investment being removed and procedures simplified
[MOSRT&H 2009]. With limited exceptions, foreigners can invest directly in India,
either wholly by themselves or as a joint venture. India welcomes FDI in virtually
all sectors, except those of strategic concern such as defence (opened to a limited
extent), railway transport and atomic energy, where the existing and notified
sectoral policy does not permit FDI beyond a certain ceiling. The major source of
FDI in India is through the equity route, which accounted for 81% of the total FDI
inflows in India. Reinvested earnings of FDI companies accounted for 18% of the
total Direct Investment. Acquisitions accounted for 17% of total FDI. Under the
automatic route, no prior government approval is required if the investment to be
made falls within the sectoral caps as specified below for the listed activities. Only
filings have to be made by the Indian company with the concerned regional office
of the Reserve Bank of India (RBI) within 30 days of receipt of remittance and
within 30 days of issuance of shares.
• Roads -100%
• Insurance – 26%
• Domestic airlines – 49%
• Telecom services & Private sector banks – 74%
• Exploration & mining of coal, lignite, diamonds & gems – 100%
• Development of new airports – 100%
• Development of existing airports – 74%
• Trading -whole sale cash & carry & for exports-100%
 237

The economic meltdown led to a sluggish infrastructure growth in India. In July

2009, the country reported a 1.2% infrastructure growth as against a robust 6.1%
growth in July 2000. This prompted the Finance Minister to exclusively focus on
infrastructure development in the Union Budget 2009-10 and to set a target of
increasing infrastructure investment to 9% of the GDP by 2014. To expedite this,
Kamal Nath, the Minister of Road Transport and Highways, is actively pushing for
mega projects to attract global players. These mega projects will build highways of
over 500 km, involve contracts worth ` 40 - 50 billion and a concession period within a
30-50 year range. Apart from this, Mr Kamal Nath has also set an ambitious target to
build 20 km of highways per day. “Infrastructure growth is critical to sustain a
country’s economic growth, especially during a downturn. Considering this, the Road
Transport Minister is doing a fairly commendable job by taking up mega projects as
they will attract international players in the highways sector,” says N C Roy, Proprietor
of Ober Construction Enterprises (P) Ltd, a mid-sized construction firm in Kolkata.
Mega road projects demand huge investments, high experience, latest technologies and
innovative approach. All these factors have definitely created a huge opportunity for
foreign contractors and investors to enter the lucrative Indian highways sector, which in
turn will spur infrastructure growth in the country. Moreover, the Road and Transport
Minister’s announcement that the foreign players will have to engage Indian firms for
the projects has given the sector an additional boost. This is because the declaration is
sure to pave the way for a key learning session for the Indian players involved in such
projects. Initially, the Ministry of Road Transport and Highways plans to take up the
six-laning of the 558-km Kishangarh-Udaipur-Ahmedabad section for an estimated cost
of ` 42.84 billion and a concession period of 30-50 years. “Apart from bringing in
foreign investments and international practices, mega projects also help to generate new
employment opportunities, thereby enhancing the country’s growth on a whole,” opines
Rakesh Jain, Proprietor of Ruby Steel, a mid-sized construction firm in Mumbai. Going
forward, the target of building 20 km of highways per day from the current 2 km of
roads per day and renewed foreign as well as domestic investments will speed up
development in the Indian highways sector. This in turn will largely contribute to the
country’s infrastructure growth.
 238

ƒ Debt Fund - Since infrastructure projects have a long pay-back period, they require
long-term financing in order to be sustainable and cost-effective. However, debt
financing for infrastructure projects has been largely confined to banks who have
difficulty in providing long-term debt due to their asset-liability mismatch. On the
other hand, insurance and pension funds have stayed away on account of their risk
perceptions. A proposal has been mooted for setting up an India Infrastructure Debt
Fund for ` 50,000 crore ($ 11 billion) to meet the needs of long-term debt for
infrastructure projects that are set up through Public Private Partnerships (PPP).
The debt fund will also help bridge the emerging gap in the total debt required for
funding infrastructure projects which presently rely on commercial banks. The
provision of low-cost long-term debt is necessary for reducing the cost of
infrastructure projects and this Fund would be a significant step in that direction
[IIDF 2010].

The debt fund would only lend to projects that have entered into commercial
operation after completion of construction. This would imply taking over of the
existing debt of commercial banks and thus releasing their lending space for
provision of loans to new projects. When the debt fund is fully operational, it will
also help create a secondary market for debt bonds. The debt fund will be set up by
one or more sponsors who will act as the general partners of the debt fund. The
sponsors could be one or a combination of IIFCL, SBI, ICICI, LIC, IDFC, UTI, an
infrastructure NBFC or an investment bank. A combination of two or three general
partners/sponsors may be preferred. In addition, the sponsors may also include one
or two foreign entities – such as IFC or ADB – as general partners in order to
enhance the credibility of the debt fund from the perspective of foreign investors.
The sponsors would be required to invest at least 10% of the total investment in the
form of subordinated debt. Typically, the holders of such long-term debt would be
insurance and pension funds (including provident funds), both Indian as well as
foreign. In addition, some sovereign funds could also be tapped for this purpose.
These debt funds have so far stayed away from financing Greenfield projects set up
by special purpose vehicles (SPVs) since they are regarded as risky investments,
especially from the perspective of pension and insurance funds. If this risk
 239

perception and liquidity can be suitably addressed, it should be possible to persuade

insurance and pension funds to lend for infrastructure projects.
 240

APPENDIX 9
BOT MODE FOR DEVELOPING HIGHWAY INFRASTRUCTURE

BUILD-OPERATE-TRANSFER (TOLL)
x The private sector meets the upfront cost of construction and expenditure on annual
maintenance.
x The private sector recovers the entire cost along with the interest from collection
the user free collections during the concession period.
x Highway Authority gives the project requirements based on DPR.
x Capital grant up to a maximum of 40% provided by NHAI.
x Risk sharing concept in Model Concession Agreement (MCA).

BUILD-OPERATE-TRANSFER (ANNUITY)
x The concessionaire meets the entire upfront cost (no grant is paid by the client) and
the expenditure on annual maintenance.
x The concessionaire recovers the entire investment through predetermined annuity
payments by the highway authority (NHAI).

Briefly stated, the basic difference between BOT (Toll) and BOT (Annuity) is
that while in case of the toll roads, construction, maintenance and tolling form part of
the concession and budgetary support is restricted to an upfront grant (viability gap
funding) to the concessionaire. The selection of concessionaire would be based on open
competitive bidding. All project parameters such as concession period, toll rates, price
indexation and technical parameters would be frozen and short listed bidders would be
required to specify the amount of grant required by them. The bidder seeking minimum
grant would be awarded the contract [Ajeet K Choudhary, et al 2001]. Whereas in the
case of the annuity model, construction and maintenance form part of the concession
and the concessionaire relies on annuity payments determined by competitive bidding
and made out of budgetary allocations spread over time. In the toll mode, the
traffic/commercial risks are borne by the concessionaire and the investment is sustained
by toll revenues, while in the annuity mode, all costs are to be paid by the government
in the form of deferred budgetary payments. The government may grant a separate
tolling contract for annuity projects if it so decides. In case of projects where tolling is
 241

not contemplated, BOT (Annuity) offers several advantages over construction

contracts. Appropriate packaging of BOT (Annuity) projects can help capture the
benefits arising out of allocation of construction and maintenance risks to the
concessionaire while minimizing the downside associated with comparatively high cost
of funds. In the current structure, the annuity and BOT concessions awarded by NHAI
are at the two extremes of risk sharing by the public and the private sector. The
difficulty in reaching the financial closure of BOT concessions and the ease with which
annuity projects closed is an indication of the market’s ability to absorb the financial
risk [Prithvi & Praveen 2003]. As such, BOT (Annuity) option is superior to the
construction contract (EPC) mode.

USER FEE/TOLL

A well-developed legislation would enable private sector participation (as

witnessed in Gujarat) and prevent legal objections to the imposition of tolls for the use
of the facilities that are developed [STF 2007]. User fee/toll on mechanical vehicles
(except the categories of vehicles exempted by government of India) using completed
four lane or six lane sections of NHs, will be levied as notified. The fee shall not
exceed the capping rates as notified by the central government vide the National
Highways (Rate of Fee) Rules 1997. The rates, which became effective from 1.7.97 are
as below:
S No Type of Vehicle Toll
( ` per km )
i) Car or Jeep or Van 0.40
ii) Light commercial vehicle 0.70
iii) Truck or Bus 1.40
iv) Heavy construction machinery & earth moving 3.00
equipment

These rates are subject to revision after every five years based on whole sale
price index and fixed in multiple of rupees five. MORT&H can stipulate higher rates of
toll on expressways, major bridges, new bypasses, tunnels and in other exceptional
cases where so justified by level of traffic.
 242

INCENTIVES FOR BOT

x Simplified policies with transparent procurement procedures.
x Foreign Direct Investment (FDI) up to 100% in the road sector.
x Viability Gap Funding (VGF) up to 40% of project cost based on competitive
bidding for each project.
x NHAI Bond exempted from capital gains tax.
x Tax concessions such as complete tax holiday for any 10 consecutive years out of
20 years of the concession period.
x Retention of toll by concessionaire for BOT (Toll) Projects.
x Longer concession periods upto 30 years. Presently, concession period of 12 to 20
years.
x Duty free import of high capacity and modern road construction equipments.
x Highway authority takes the responsibility of providing land, utility shifting and
environmental clearances.
x Exemption of 10% service tax by Central Board of Excise & Customs (CBEC) on
road construction which includes widening & strengthening. However CBEC
clarified that no such exemption on repair/maintenance [PPP 2007].

POLICY THRUST
x Committee on Infrastructure (CoI) constituted under the Chairmanship of Hon’ble
PM.
x Model Concession Agreement (MCA) and procurement process revised. No
departure from the ceiling of 40% on Viability Gap Funding for BOT (Toll) based
projects.
x BOT (Annuity) model with government approval is to be adopted where response
to BOT (Toll) is inadequate.
x EPC (Engineering, Procurement & Construction) approach is to be resorted to with
prior government approval where inadequate response to BOT (Annuity) projects.
x Public Private Partnership (PPP) Appraisal Committee (PPPAC) constituted in
Ministry of Finance (MOF).
 243

BOT (Toll) Projects

Category Awarded Total VGF Grant Completed
No. of Length Project ( ` billion) No of Length in
Contracts (km) Cost (%) Contracts km
(`
billion)
NHDP Phase 9 454 35.98 7.19 8 426
I (19.98 %)
NHDP Phase 15 753 50.80 -2.16 - -
II (-4.25 %)
NHDP Phase 28 1848 110.13 18.60 - -
III (16.89 %)
NHDP Phase 2 148 11.52 -9.75
V (-84.6 %)
Total 54 3203 208.43 13.88 8 426
(6.66%)
BOT (Annuity) Projects
Category Awarded Total Annuity Completed
No. of Length Project (` billion) No of Length in
Contracts (km) Cost (%) Contracts km
(` billion)
NHDP Phase 8 476 23.54 2.88 8 476
I (12.23%)
NHDP Phase 16 864 68.52 6.02 - -
II (8.79%)
Total 24 1340 92.06 8.90 8 476
(9.67%)
 244

PROCEDURE FOR CLEARANCE OF PPP PROJECTS

ƒ Cost of projects less than ` 5.0 billion - By a committee consisting of Secretary,

Dept. Of Economic Affairs (DEA) and Secretary, Dept. Of Road Transport &
Highways (DORT&H)

x Cost of highway projects more than ` 5.0 billion - By a Public Private

Partnership Appraisal Committee (PPPAC) chaired by Secretary, Dept of Economic
Affairs and Secretary, Planning Commission, Secretary, Dept. of Expenditure,
Secretary, Dept. Of Legal Affairs, Secretary, DORT&H as members of the
Committee. PPPAC examines PPPAC memo in specified formats, Deviations from
the Model Concession Agreement (MCA), Feasibility Study/DPR and Bid
documents
 245

APPENDIX 10
MODEL CONCESSION AGREEMENT (MCA)
Initially, not much private sector investment was forthcoming, but NHAI
addressed their concerns through the Model Concession Agreement (MCA), which
ensured that their investment would be secure and facilitated loans for companies from
financial institutions. There were also concerns about the growth of traffic over time,
which directly impact the toll collection targets. To address this, the NHAI came up
with the annuity scheme, under which the private investor builds and maintains the
road over a fixed period of time, the NHAI collects toll and pays the company an
annual amount. Also, to make the Build-Operate-Transfer (BOT) projects attractive to
private investors, the NHAI evolved a system under which it can give a grant up to
40% of the cost of a project under the system of Viability Gap Funding (VGF). A new
Model Concession Agreement (MCA) for Highway Projects was put into practice from
the year 2006. The new agreement includes Design, Build, Finance, Operate and
Transport activities instead of Build, Operate and Transfer. Replacing ‘transfer’ by
‘transport’ is crucial as it implies that government, instead of owning the asset after the
concession period, would continue to buy ‘road services’ from the Concessionaire
[NHAI 2002a].

The MCA framework addresses the issues which are typically important for
PPP projects, such as unbundling of risks & rewards, symmetry of obligations between
the principal parties, equitable sharing of costs & obligations, and risk mitigation
options under various scenarios including force majeure & termination, under
transparent procedures. All the new NHAI projects, including the six laning of 6500 km
highways at a cost of ` 227.50 billion cleared by the PM’s Committee on Infrastructure
(CoI) are being awarded as per the new MCA. The highlights of the new MCA are as
under :
x Partial guarantee of traffic risk to the Concessionaire.
x Concessionaire’s interest protected in competing roads.
x Performance standards of the highways clearly spelt out.
x Provision for change in scope, if any, required during construction and operation
period included.
 246

x Utilities to be relocated by the Concessionaire but it will be excused from failure in

case of delay by owning agencies.
x Focus on road user’s safety.
x Users fee charges, revision thereof and concession to local traffic clearly spelt out.
x NHAI has to provide land free from all encumbrances, NHAI to bear cost of all pre-
construction activities.
x Risks are allocated to the party, which is best suited to handle it.
x Lowest subsidy/grant quoted by the bidders towards viability gap funding or
earliest premium quoted by the bidder is the basis for award.
x Force Majeure conditions and relief to the party under such conditions clearly spelt
out.
x Strong dispute resolution mechanisms.

With these measures, NHAI has been fairly successful in attracting private
investment. The government has also approved the construction of ring roads, bypasses
and flyovers as part of the national highways network. These will be implemented on a
BOT (toll) basis, with the private sector providing ` 120 billion of the required
investment and the government shelling out ` 75 billion. Domestic and international
companies have been eyeing the project, first mooted in 2006, because the existing
overlap of passenger and cargo lines results in long delays, high costs and poor safety.
BOT bids are invited for six laning with 20 years concession period. However, option
exists for Concessionaire and the NHAI after 8 years if not interested for 6 laning. In
such case, concession shall be terminated after four laning with 12 years concession
period.

RISK FRAMEWORK OF MODEL CONCESSION AGREEMENT

The MCA has been developed in consultation with all stakeholders based on
internationally accepted principles and best practices. Throughout, it seeks to achieve
reasonable balance of risks and rewards for all the participants. As an underlying
principle, risks have been allocated to the parties that are best suited to manage them.
Project risks have, therefore, been assigned to the private sector to the extent it is
capable of managing them. The transfer of such risks and responsibilities to the private
 247

sector would increase the scope of innovation leading to efficiencies in cost and
services. The commercial and technical risks relating to construction, operation and
maintenance are allocated to the concessionaire, as it is best suited to manage them.
Other commercial risks, such as the rate of growth of traffic, are also allocated to the
concessionaire.
Key Concessionaire Risks –
x Construction Risk - The concessionaire is required to commence construction
works when the financial close is achieved or earlier date that the parties may
determine by mutual consent. The concessionaire shall not be entitled to seek
compensation for any prior commencement and shall do it solely at his own risk.

x O & M Risk - Concessionaire to operate and maintain the project facility (includes
road and road infrastructure as specified in the concession agreement). Failure to
repair and rectify any defect or deficiency within specified period shall be
considered as breach of responsibility.

x Financial Risk - The concessionaire shall at its cost, expenses and risk make such
financing arrangement as would be necessary to finance the cost of the project and
to meet project requirements and other obligations under the agreement, in a timely
manner.

x Traffic Risk - The MCA provides for increase or decrease of the concession period
in the event the actual traffic falls short or exceeds the target traffic. NHAI
stipulates the target traffic during the year specified in project concession
agreement, which is usually around the 10th year from the date of signing of the
agreement. The target traffic is determined based on 5% Compounded Annual
Growth Rate (CAGR) over the base year traffic for the project. MCA also provides
for termination of the agreement if the average daily traffic in any accounting year
exceeds the design capacity and continues to exceed for three subsequent
accounting years. Termination payments under this scenario will be commensurate
to those applicable under an Indirect Political Event

Key NHAI Risks

• Land Acquisition Risk - NHAI is responsible for acquiring the requisite land for the
project highway
 248

• Approvals - NHAI will provide all reasonable support and assistance to the
concessionaire in procuring applicable permits required from any Government
Instrumentality.

Key Common Risks

• Force Majeure Risk - Force Majeure shall mean occurrence in India of any or all of
Non-Political Event(s), Indirect Political Event(s) and Political Event(s), which include
the following:
ƒ Non-Political Event - Act of God, epidemic, extremely adverse weather
conditions or radioactive contamination or ionising radiation, fire or explosion; strikes
or boycotts; discovery of geological conditions, toxic contamination or archaeological
remains on the Site; or any event or circumstances of a nature analogous to any of the
foregoing.
ƒ Indirect Political Event - An act of war, invasion, armed conflict or act of
foreign enemy, blockade, embargo, riot, insurrection, terrorist or military action; civil
commotion or politically motivated sabotage which prevents collection of toll/fees;
industry-wide or state-wide or India-wide strikes or industrial action which prevent
collection of toll/ fees; any public agitation which prevents collection of toll/ fees.
ƒ Political Event - Change in Law; compulsory acquisition by any governmental
agency of any project assets or rights of concessionaire or of the Contractors; or
unlawful or unauthorised or without jurisdiction revocation of or refusal to renew or
grant without valid cause any consent or approval required by developer.

OBLIGATIONS ON CONCESSIONAIRE
x Design, Engineering, Financing, Procurement, Construction, Operation and
Maintenance of a stretch of NH entrusted to Concessionaire during the concession
period.

x Submission of Project completion schedule, finalise design & detailed engineering

basis, establishment of requisite organisation by appointing Project Manager etc
and undertaking to do and perform such acts, deeds & things as may be necessary
or required for construction and project completion in accordance with MCA.
 249

x Construction of the Project Highway shall be undertaken by the Concessionaire in

conformity with the Project Completion Schedule & Project milestones. If the
Concessionaire fails to achieve any such Project milestone other than Project
Completion, within a period of 90 (ninety) days from the date set forth, then it shall
pay Damages to NHAI at the rate of ` 1000,000 (Rupees one million) per day until
such milestone is achieved. NHAI may either recover such Damages from the
Performance Security or demand payment thereof from the Concessionaire. The
Concessionaire shall make such payment within 7 (seven) days of receiving such
demand from NHAI and any delay in making such payment shall attract interest @
SBI PLR plus two per cent. If the Concessionaire fails to achieve Project
completion as per the Scheduled Project Completion Date then it shall pay weekly
damages @ 0.01% of the total Project Cost.

x During the construction period, Concessionaire shall be responsible for maintaining

the site including the existing two lanes of project highway at its own cost and
expenses.

x Furnishing of Monthly Progress Reports (MPRs) of construction works to NHAI

and Project Management Consultants (PMCs).

x Operate & maintain highway by itself or through Operations & Maintenance

(O&M) contractors complying with standards & specifications, good industry
practice, applicable laws & permits.

x Prepare Maintenance Manual incorporating regular & periodic maintenance

program in consultation with PMC prior to 180 days from scheduled project
completion date.

x Submit proposed preventive & other scheduled maintenance of highway in

consultation with PMC prior to 45 days from the commencement of each
Accounting year.

x 7 days notice to NHAI before the proposal closure of lane for maintenance/repair
works. Permission from NHAI in consultation with PMC within 5 days of receiving
such request from concessionaire by stipulating the re-opening period. Damages for
delay in re-opening @ ` 10,000 per day for every stretch of 100 metres in the first
 250

year of Operations and revised by Whole Sale Price (WPI) in each subsequent
operating years.

x Rectification of defects/deficiencies as intimated by PMC within 30 days from the

receipt of O & M inspection report along with fortnightly rectification reports to
NHAI & PMC.

x In case of failure to commence remedial/repair works within 30 days of receipt of

notice from NHAI or PMC recovery of 125 times the cost of repair or damages @ `
10,000 per day plus 0.1% of cost of repair as assessed by PMC, and/or including
termination if required.

x Reimbursement of 50% expenses towards PMC within 15 days from the receipt of
expenditure statement from NHAI.

GUARANTEES TO CONCESSIONAIRE
ƒ Concession period of 15 years commencing from the appointed date i.e. date on
which financial close is achieved (20 years concession period as per new MCA) for
collection of toll/user free.

ƒ No additional toll way to be opened to traffic before expiry of 8 years from the
Appointed Date. If additional tollway commissioned at any time after 8 years from
Appointed Date, Concession Period to be increased by half the number of years by
which such commissioning period precedes the expiry of concession period, e.g. if
additional tollway occurs after 10 years, concession period is to be increased to 17.5
years against originally agreed 15 years.

ƒ Toll from additional tollway not to be less than 133% of toll being levied by
Concessionaire.

ƒ NHAI to enable access to the site free from encumbrances, assist in obtaining
applicable permits, access to necessary infrastructure facilities & utilities including
water, electricity, telecom facilities at commercial rates.

ƒ The Site shall be made available to the Concessionaire pursuant hereto by NHAI
free from all Encumbrances and occupations and without the Concessionaire being
required to make any payment to NHAI on account of any costs, expenses and
 251

charges for the use of such Site for the duration of the Concession Period save and
except as otherwise expressly provided in this Agreement. NHAI shall procure for
the Concessionaire access to the Site, free of Encumbrances, not later than 150 (one
hundred and fifty) days from the date of the Agreement. Provided, however, that if
NHAI does not enable such access to any part or parts of the Site for any reason
other than a Force Majeure Event or breach of the Agreement by the
Concessionaire, NHAI shall pay to the Concessionaire Damages at the rate of `
1000 (Rupees one thousand) per month per 1000 (one thousand) sq. meters or part
thereof if such area is required by the Concessionaire for Construction Works.
Such Damages shall be raised to ` 2000 (Rupees two thousand) per month after
Commercial Operations Date (COD) if such area is essential for the smooth and
efficient operation of the Project Highway. Provided further that the Completion
Certificate or the Provisional Certificate, as the case may be, for the Project
Highway shall not be affected or delayed as a consequence of such parts of the Site
remaining under construction even after the Scheduled Project Completion Date.

ƒ Change of scope of work not exceeding 5% of the total project cost and not
adversely affecting the Commercial Operations Date (COD).

ƒ Revenue shortfall loan for debt service payments with interest rate @ SBI PLR per
annum if realizable fees in any accounting year during the concession period fall
below the subsistence revenue level as a result of indirect political event or political
event after accounting for insurance claims.

ƒ 50% Force Majeure cost due to indirect political event to be reimbursed by NHAI
after deducting insurance claims. 100% reimbursement in case of political event &
no reimbursement if cause attributed to non political event. Interest @ SBI PLR
plus 2% on reimbursement is admissible.

ƒ In case Project needs to be terminated with Force Majeure event subsisting for more
than 180 days, entire debts to be cleared by NHAI.

ƒ The notification of the New National Highways Fee Rules (2008) has provided for
a revision of toll rates and hence realisable toll revenues for all vehicle categories.
The new toll rules are applicable for all new road projects. The salient features of
the new toll rules are:
 252

ƒ Increase in base toll rates by 3% every year

ƒ Increase in toll charges to the extent of 40% of the increase in WPI.
ƒ Toll charges for new structures (bridges, tunnels)/alignments (bypass,
alternate section) determined based on construction cost.
ƒ Rounding off fee to the nearest five rupees (earlier rounded off to nearest 1
Rupee).

While the earlier tolling rules prescribed a standard base toll rate on a Passenger
Car Unit (PCU)/km basis for a highway project, the new rules prescribe base toll rates
also for high-cost structures (such as bridges, bypass or tunnels) separately. The base
toll rates for such high-cost structures are indexed to the estimated project cost on
vehicle per trip basis.

ƒ The concession agreement provides for extension or reduction of the concession

period in the event the actual traffic falls short or exceeds the target traffic , as
estimated on the target date as shown below :

Type of Variation Change in Concession Period Cap on Concession

Period Variation
Actual Traffic < For every 1% shortfall, concession 20%
Target Traffic period increase by 1.5%
Actual Traffic > For every 1% excess, concession 10%
Target Traffic period reduction by 0.75%

MCA also provides for termination of the agreement if the average daily traffic
in any accounting year exceeds the design capacity and continues to exceed for three
subsequent accounting years. Termination in such scenario will be deemed to happen
on account of an Indirect Political Event.
 253

ƒ Early Termination of Concession –

Event of Default
Concessionaire event of No Payment
default
NHAI event of default
Force Majeure
Non-Political event
Indirect Political event
Political event
During Construction (after During Operation
financial closure)
Payment equal to 90% of
Debt due less insurance
claims if any.
a) Total Debt due
b) 150% of Adjusted Equity
Payment equal to 90% of Debt due less insurance claims
if any
a) Debt due less Insurance Cover
b) 110% of the Adjusted Equity
a) Total Debt due
b) 150% of Adjusted Equity

COUNTER GUARANTEES FROM CONCESSIONAIRE

ƒ Bid Security of ` 50 million as earnest money at the time of submission of tenders

(approx 1% of estimated cost of project)

ƒ Opening of an ‘Escrow Account’ to credit/debit all inflows & outflows of cash on

a/c of capital & revenue receipts as well as expenditure. Further Concessionaire to
give irrevocable instructions to Bank by way of an Escrow Agreement for ensuring
payments to EPC contractors, taxes payable by Concessionaire, recoveries from
Concessionaire etc.

ƒ Financial Close i.e., date from which concessionaire has access to funding by
Senior Lenders. MCA stipulates that Concessionaire to achieve Financial Close
within 180 days from the date of execution of Concession Agreement failing which
Concessionaire entitled to a further period of 90 days subject to an advance weekly
payment of ` 100,000 per week. Further if Financial Close does not occur within
270 days (180 + 90), Termination of Concession Agreement with mutual consent.
 254

ƒ Performance Security in the form of Bank Guarantee for ` 100 million within 120
days from the date of Agreement. Bid Security to remain in full force & effect till
Concessionaire provides Performance Security to NHAI.

ƒ The Performance Security shall be released by NHAI to the Concessionaire upon

contribution of the Equity (excluding Equity Support, if any) by the shareholders of
the Concessionaire to the extent of 100% and upon the Concessionaire having
expended on the Project and paid out an aggregate sum of not less than 20%
(twenty percent) of the Total Project Cost as certified by the Statutory Auditors of
the Concessionaire and provided the Concessionaire is not in breach of this
Agreement. If the Concessionaire is in breach of this Agreement, the Performance
Security shall be continued till the COD or until the breach is cured; whichever is
earlier.

ƒ In the event of the Concessionaire being in default in the due and faithful
performance of its obligations under this Agreement and failing to remedy such
default within the Cure Period, the NHAI shall without prejudice to its other rights
and remedies hereunder be entitled to encash and appropriate the Performance
Security as Damages for such default. Upon such encashment and appropriation of
the Performance Security, NHAI shall grant a period of 15 (fifteen) days to the
Concessionaire to provide fresh Performance Security and the Concessionaire shall
within the time so granted furnish to NHAI such Performance Security failing
which NHAI shall be entitled to Terminate this Agreement. The provision set forth
in this Clause shall apply mutatis-mutandis to such fresh Performance Security

ƒ Notwithstanding anything to the contrary, upon furnishing of fresh Performance

Security, the Concessionaire shall be granted an additional period of 60 (Sixty) days
as Cure Period for remedying the defaults and complying with his obligations under
this Agreement. In the event of the Concessionaire continuing to be in breach of
the provisions of this Agreement after such Cure Period, NHAI shall be entitled to
terminate this Agreement

ƒ Weekly damages for delay in completion @ 0.01 % of total project cost.

ƒ Termination of Agreement if commercial operating Date (COD) does not occur

within 12 months from scheduled project completion date.
 255

ƒ Incomplete Items (Punch List) in the Provisional Certificate of Completion to be

completed within 120 days from the date of issue of Provisional Certificate.
Entitled further 180 days subject to payment of damages @ ` 200,000 / week.
Failure to complete Punch List items even after 300 days (120 plus 180) liable for
Termination of Agreement.

SUGGESTIONS BY NAGARJUNA CONSTRUCTION COMPANY

Execution of national highway projects under Build-Operate & Transfer (BOT)

and Annuity schemes have already been implemented by the National Highway
Authority of India (NHAI). This has restricted the scope to one-time development for
an agreed period. It has been decided to take up 4 laning now and 6 to 8 laning in the
next 8 to 10 years under the BOT scheme. The Planning Commission has drafted the
Model Concession Agreement (MCA) which provides 4-laning for 12 years and block
concession for 6-8 laning for the next eight years. The National Highway Act provides
for grant up to 40% in respect to partially viable projects. In case of more viable
projects, the Concessionaire can offer negative grant. Henceforth, most of the national
highway development programmes (NHDP) amounting to ` 1700 billion in the next 8
to 10 years will be under the BOT Scheme. The MCA has been under discussion and
some radical changes have been made to satisfy the concerns of the financiers and
developers. There are still several issues which need to be addressed.

• Land acquisition for project is the job of the authority - it should also acquire the land
for police post, health centre, etc. The compensation payable at ` 50 per 1,000 sqm per
day needs to be reviewed. The toll rights should not be affected due to delay in handing
over the land.

• Issues like permits, security against law and order issues, day-to-day interference by
state authority etc are a part of the State Support Agreement. This needs to be signed
before calling BOT tenders with full assurance of timely action by State.

• The time of completion of the project depends mostly on geophysical and local
climate conditions. The construction period should not be a part of the concession
period of 12 or 20 years.

• The revenue shortfall should be in the form of a grant and not an interest-bearing loan.
 256

• The toll collection revenue sharing at eighth year and thereafter is not desirable
because it would lead to accounting problems and possible legal disputes and
interference of the government in day-to-day working.

• A yearly fixed amount may be prescribed for each project as for above safety fund.

• The concession agreement should be dynamic and provide for separate fiscal cash
compensations. The toll-fee hike should not be linked with the wholesale price index
whenever applicable but it should be enhanced by 10% every two years.

• The concessionaire should be allowed to appoint his own engineer and staff for
implementation of the project. Appointment of independent engineer by the authority
should be with the consent of the concessionaire.

• The variation in traffic growth and effect on the concession period should not be
based on seven days PCU count. This should be on the basis of past six months toll
vehicle count.

• According to the contract, the accounts are to be audited by the authority on a regular
basis, which has nothing to do with any of their obligations. Since submission of
audited accounts as per company law is a mandatory requirement, indulgence by the
authority is not desirable.

Though the draft concession agreement has been substantially amended, it stills
lacks in many aspects. Past experience shows that the authority is bound by several
other government procedures which cannot afford any relaxations. The document has to
be simpler and lesser regulated. The effort of the authorities to bring out a
comprehensive document is commendable. It is hoped that it will be further refined
taking into consideration the above points. The new model concession agreement can
then be better implemented in the true spirit of public-private partnership.
 257

APPENDIX 11
NANO POLYMER BASE STABILIZATION OF NH-1 STRETCH
ON PANIPAT-JHALANDHAR SECTION FROM KM 96.000 TO
KM 387.000 IN THE STATE OF HARYANA & PUNJAB
[Source ; Publication No 38, IRC Highway Research Board (2010-11)]
Date of Starting and Duration : 17 Dec 2010
Date completion (Targeted): 23 Dec 2011
India Polyroads Pvt. Ltd. Gurgaon, Haryana (IPPL) (R,I)
Scope and Objectives
x To assess the suitability of Soil Stabilised Base (SSB) Layer with Nano polymer
base stabilizer “SoilTech MK-III” for Road, Runway, Hard Stand Construction
by comparing their Physical, Engineering, Financial and Execution time
properties with those already implemented vide current specification by detailed
Laboratory investigations.
x To correlate design procedure with IRC : 37; As per the Pavement Crust
Catalogue frizzed in IRC : 37.
x Design of Pavement Cross section using Nano Polymer base stabilizer
‘SoilTech MK-III’ considering the actual traffic to be stimulated over design
life and site condition.
x Geotechnical Laboratory & field investigation to evaluate the suitability of
material/design mix/product application for real time construction.
x Monitoring of performance of Constructed Road over a period of time including
monsoon which includes DCP Test and APTF simulates.
Design, Drawing & Execution Methodology
(a) Design of Road and Concept
As per IRC:37-2001, trial pavement design are to be analysed using linear
elastic layered theory and maximum vertical strain on sub-grade and maximum tensile
strain at the bottom of bituminous layer are computed for a standard load. Design
thickness combination is so selected that the computed critical strain values, which
correspond to the initial condition of the pavement, are less than the limiting strain
values given by the performance criteria adopted in the guidelines. Limiting strain
criteria have been given in IRC : 37 for two distresses :- rutting along wheel paths and
 258

fatigue cracking in bituminous layers. No separate criterion is available for rutting in

bituminous layers are given.
Thereafter the highway stretch had been constructed with an over strength Nano
Polymer Base Liquid called SoilTech MK-III, as a composite SSB (Soil Stabilized
Base) layers. While calculating the stress/strain failures in Layer Theory formulated in
IRC : 37 for this crust, it was found the reduced crust itself is more than enough to take
10 CBR & 10 msa design over a period of 15 years.
Table B-Cross-Section overview
CONVENTIONAL CRUST
BITUMINOUS CONCRETE
DENSE BITUMINOUS
WET MIX MACADAM 250 MM
GRANULAR SUB BASE 200 MM
SUB GRADE 500 MM

POLYMER STABILIZED ROAD

BITUMINOUS CONCRETE
SOIL STABILIZED BASED 150 MM
GRANULAR SUB BASE 150 MM
SUB GRADE 300MM

(b) Quantity & Resource’s Comparision (Conventional Crust Vs Alternate

Crust)
Special Situations/Problems faced during investigation/construction
In this particular project six Laning of Panipat-Jhalandhar, NH-1, the borrow/in-situ
material available in the entire stretch was less than 2μ particle size sandy and non-
plastic soil. The stabilization of the same was not cost effective as coating area of
SoilTech MK-III was more and grading was not proper. Then, additional 40 percent of
0 - 40 mm size aggregate blended with this soil and then SoilTech MK-III used. The
outcome is excellent with CBR more than 218, Unconfined Compressive strength
(UCS) 1868 KP a and Resilient Modulus 1887 MPa. Photographs of Nano Polymer
Base SoilTech MK-III treated surface attached for better appreciation wherein it can be
 259

seen rock like surface has been created thus obviating the requirement of any base layer
prior to laying of the wearing course.

Performance of Such New Materials/Technology

The product Nano Polymer base stabilizer had been invented long 13 years back and
being used extensively in South Africa, Australia, Middle East, Europe and Far East
Countries. Before India Polyroads launched it commercially in India, extensive trials
were conducted in many places and the outcomes are evaluated by premier Authorities
like Central Road Research Institute, New Delhi, Indian Institute of Technology,
Kharagpur, West Bengal, Council for Scientific Industrial Research, South Africa,
Bhilai Institute of Technology, Durg, Chhattisgarh etc.
Annexed Tabular Reports are the fact finding results.
Table C premium Organization Investigation and performance Report
Sr/ Description IIT, Kharagpur IPPL, Gurgaon CSIR, South IPPL-Panipat-
No Test Type Test Results Africa Test Jhalandhar (NH-1)
. Results
Natur With Natur With Natur With Natur With 0.5%
al 0.5% al 0.5% al 0.5% al SoilTech
Soil SoilTech Soil SoilTech Soil SoilTech Soil MK-III by
MK-III MK-III MK-III weight of
by by by soil
weight weight weight
of soil of soil of soil
A Physical Properties of Natural Soil
1 Gradation
Gravel(%) 17.00 12.00 24.00 3.00
Sand (%) 62.00 34.50 52.00 62.00
Silt & Clay 21.00 53.50 24.00 35.00
(%)
2 Liquid Limit 25.00 33.50 28.00 20.00
(%)
3 Plastic Limi 13.00 19.60 18.00 NA
((%)
4. Plasticity 12.00 13.90 10.00 NP 40%
Index (%) Aggregate
Blended
material
B Laborator Output results with SoilTech MK-III
5 C.B.R (%) 16.80 30.80 7.60 28.50 28.00 101.00 12.00 46.00
6 U.C.S (Spa) 790 3871 378 1465 386 1100 423 1868
 260

(soaked
)
7 Resilient 154 8016 268 6895 154 3264
Modulus
(Mpa)
(C Field Testing and visual observation 7 days 6
months
8 C.R.B (%) 90 218
9 Resilient 1448 1887
Modulus
(Mpa)
10 R.I (mm/km) 1436 1232 1265
11 BBD Test 0.071 0.447
IIT & CRRI
(mm)
Laboratory Test Only
12 Rutting Not New Not found
found
13 Fatigue Not New Not found
found
14 Actual Traffic 1.80 msa
Stimulation

Looking to table C and layer theory of Highway Design (IRC : 37); it is now
understood that once, we are replacing Base/Sub-base Layer with SSB Layer, the
impact of wheel load or failure of Fatigue & Rutting minimize substantially. In table C
it has been observed that after six month report 1.80 MSA Real stimulation of traffic
there was no major failure or deviation from the original construction made.
Interim Conclusion

x Substantially increases the soil strength over 300 percent.

x Road can be designed with reduced Bituminous and Base Layers.
x Performance of real time traffic stimulation for last six months shows that this
SSB layer in construction enhances the pavement life and also minimizes the
maintenance cost of pavement.
x Alternate composite design and pavement save time and enable fast
construction
x Reduction in Quarry/Mining of Aggregate is substantial
x Reduction in Crust Layers, hence reduction in construction time.
x Environmental friendly and a green product. (Much less CO2 emission than
other stabilizers) and Toxicity effect is zero.
 261

Further information/copy of report can be obtained from

India Polyroads Pvt. Ltd. Plot -115, Sector-44. Gurgaon-122 002, Haryana.
Mobile +91 9560106662 Phone: +911244477743/47 Fax: +91124 4477748

Photographs of Nano Polymer Base SoilTech MK-III treated surface

 262

Photographs of Nano Polymer Base Stabilization of NH-1 stretch on Panipat-

Jhalandhar section from km 96.000 to km 387.000 in the state of Haryana &
Punjab
 263

APPENDIX 12 : COST COMPARISON OF NANO POLYMER STABILISATION

IRC:SP:48 vs Alternate Design with SoilTech Treated Layer
As Per IRC:SP:48-1998

THICKNESS (MM)
NUMBER/SIDE

WIDTH (M)

AMOUNT
QUANTITY

UNIT

RATE
LENGTH (M)
ITEM

Semi Dense 1
Bituminous
500 7.00 25 88 Cum 9,800 862,400
Concrete
(SDBC)
Tack Coat II 1 500 7.00 3500 Sqm 35 1,222,500
Dense 1
Bituminous
500 7.00 60 210 Cum 9,000 1,890,000
Macadam
(DBM)
Track Coat I 1 500 7.00 3500 Sqm 35 122,500
Prime Coat 1 500 7.00 3500 Sqm 63 220,500
Wet Mix 1
Macadam 500 7.20 250 900 Cum 2,474 2,226,600
(WMM)
Soil Stabilized
Base (SSB) Cum 1022 -

Soil Tech MK-

Ltr 300 -
III
Granular Sub 1
Base (GSB) 500 150 741 Cum 17,702 1,261,182
9.87
Unpaved 2
Shoulder 500 335 414 Cum 468 193,752
1.24
Embankment
(As per Profile 500 Cum 175 -

Excavation 1 500 10.13 400 2025 Cum 100 202,500

COST FOR CONSTRUCTION OF ROAD ITEMS ONLY: 7,101,934
 264

As Per Alternate Crust with Soil Tech MK III

THICKNESS (MM)
NUMBER/SIDE

WIDTH (M)

AMOUNT
QUANTITY

UNIT

RATE
LENGTH (M)
ITEM

Seal Coat
1 500 7 6 3500 Cum 75 262,500

Tack Coat II Sqm 35 -

Dense
Bituminous
1 500 7 50 175 Cum 9,000 1,575,000
Macadam
(DBM)
Track Coat I Sqm 35 -
Prime Coat 1 500 7 3500 Sqm 63 220,500
Wet Mix
Macadam Cum 2,474 -
(WMM)
Soil Stabilized
Base (SSB) 1 500 7.2 175 630 Cum 1,022 643,860

Soil Tech MK-

0.5 % BY WT 6895 Ltr 300 2,068,500
III
Granular Sub
Base (GSB) 1 500 9.54 150 716 Cum 1,702 1,218,632
Unpaved
shoulder 2 500 1.13 231 261 Cum 468 122,148

Embankment
(As per profile) Cum 175 -

Excavation 1 500 9.72 325 1580 Cum 100 158,000

COST FOR CONSTRUCTION OF ROAD ITEMS ONLY: 6,269,140
OVERALL SAVING 12.00%
 265

APPENDIX 13
INTERSTATE HIGHWAY SYSTEM OF USA
To link its vast territory, the United States built a network of high-capacity,
high-speed highways, of which the most important element is the Interstate Highway
system. These highways were commissioned in the 1950s by President Dwight D.
Eisenhower and modeled after the German Autobahn. There is also a transcontinental
rail system, which is used for moving freight across the lower forty-eight states.
Passenger rail service is provided by Amtrak, which serves forty-six of the lower forty-
eight states. In the summer of 1919, just months after the end of World War I, an
expedition of 81 Army vehicles - a truck convoy set out from Washington, D.C., for a
trip across the country to San Francisco. The convoy's purpose was to road test various
army vehicles and to see how easy or how difficult it would be to move an entire army
across the North American continent. The convoy assumed wartime conditions -
damage or destruction to railroad facilities, bridges, tunnels, and the like - and imposed
self sufficiency on itself. Averaging about 6 miles an hour, or 58 miles (90 km) a day,
the trucks snaked their way from Washington, up to Pennsylvania and into Ohio, then
due west across the agricultural Midwest, the Rockies, and into California. Generally, it
followed the "Lincoln highway," later known as U.S. 30, arriving in San Francisco 62
days and 3,251 miles later.

The convoy involved 24 army officers and 258 enlisted men. One of those
officers, a young lieutenant colonel, went along as a Tank Corps observer "partly for a
lark and partly to learn," he wrote decades later. "We were not sure it could be
accomplished at all. Nothing of the sort had ever been attempted." The convoy made a
lasting impression on the young officer and stoked in him an interest in good roads that
would last for decades. A generation later, during World War II, Dwight D. Eisenhower
was still thinking about good roads as supreme Allied commander in Europe, where he
oversaw the invasion of Western Europe and the defeat of the Nazi army, which was
able to move quickly on the autobahns running throughout Germany. Later, as
President of the United States, Eisenhower cited the 1919 convoy and his World War II
experiences to persuade Congress to enact the Federal Aid Highway Act of 1956,
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creating what is now known as the interstate highway system, which observed its 50th
anniversary in the year 2006.

"The old convoy had started me thinking about good, two-lane highways," he
wrote years later in his popular memoir, At Ease, "but Germany had made me see the
wisdom of broader ribbons across the land." The interstate system now comprises
46,876 miles. The completion of the system, at a cost of $129 billion, was a cooperative
federal-state undertaking. Each state transportation department managed its own
program for location, design, right-of-way acquisition, and construction. The states also
were responsible for the ownership and maintenance of the system, and in 1981, they
began receiving federal funds for maintenance. Congress provided revenues from the
federal gasoline tax to provide 90 percent of the cost of the construction of the
interstates with the states picking up the remaining 10 percent. The technical standards
for the highways were highly regulated - lanes had to be 12 feet wide and shoulders 10
feet wide, the bridges had to have 14 feet of clearance, grades had to be less than 3
percent, and the highway had to be designed for travel at 70 miles an hour. The most
notable attribute of the system is the limited access concept. The 42,000 mile system
only has approximately 16,000 interchanges (Interstate 90 at Seattle, Washington
shown below). The interstate system has had an enormous and lasting impact on the
social and economic fabric of the nation, even as it has provided, as Eisenhower hoped,
a system of highways that might be needed to move material & troops in time of war.
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Eisenhower remembers the rough roads

All this might never have happened if Lieutenant Colonel Eisenhower had not
been involved with the 1919 transcontinental convoy, for the history of the interstate
highway system certainly begins with this event. Eisenhower, along with the other
observers, endured rough conditions on the trip. Half the distance, particularly west of
the Mississippi River, was over dirt roads, wheel paths, desert sands and mountain
trails. More than 230 recorded road accidents occurred, as the heavy trucks, driven
mostly by inexperienced drivers, sank in quicksand or mud, ran off the road, or
overturned. Other problems included inadequate bridges; limited sleep; lack of food,
shelter, and bathing facilities; and even the lack of drinking water. In spite of all this,
the results of the transcontinental exercise provided much valuable information about
the operation and maintenance of a motor truck convoy as well as the feasibility of
moving a large military force by road across the continent under simulated wartime
conditions.

Consequently, in the opinion of the ordnance observer, the convoy was a

successful operation, not only militarily but also from a public relations point of view.
"All along the route, great interest in the Good Roads Movement was aroused by the
passage of the convoy," reported E. R. Jackson, the ordnance observer in his "Report on
the First Transcontinental Motor Convoy." "However, the officers of the convoy were
thoroughly convinced that all transcontinental highways should be constructed and
maintained by the Federal Government" because some rural states could not afford the
funds for road building.

Eisenhower, in his report on the expedition, agreed with some of these points
but had observations of his own. "Extended trips by trucks through the middle western
part of the United States are impracticable until the roads are improved," he said, "and
then only a light truck should be used on long hauls." On the other hand, he observed
that in the eastern part of the country, the roads were much better, allowing a light truck
to travel 100 miles a day. But the convoy did more than just indicate what the army
needed to do to improve its mobility. Along the way, its arrival in cities and towns
throughout the nation's midwest and west was a major event. Some 3,250,000 people in
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350 communities turned out to see the latest military equipment and listen to patriotic
speeches. And the expedition stirred interest in road building.

Federal aid to highways proved a divisive issue

The increased public interest in roads also raised the issue of federal aid to
highways. Early in the debate, there were many critics of federal aid to highways.
Thomas M. McDonald, who became chief of the Bureau of Public Roads (BPR) in
1919, "appreciated the need for a connected system of interstate highways, but he did
not believe that a separate national system under a federal commission was the way to
achieve it," according to a history of America's highways, A History of the Federal-Aid
Program. He also questioned the assumption that long distance highways were
necessary for national defense, saying that what was needed was a system of roads
connecting military installations.

Correspondingly, McDonald believed that the state highway departments should

be strengthened. The Federal Highway Act of 1921 reflected this view, strengthening
the state highway department's control of the highway system, particularly in
maintenance. This act temporarily quieted demands for interstate highways under
federal control. By the late 1930s, however, more Americans owned automobiles, and
highways were getting more congested. Public sentiment for federal control of the
construction of transcontinental superhighways was increasing. President Franklin D.
Roosevelt, seeking to pull the nation out of the Great Depression, saw a network of toll
superhighways as a way to provide new jobs for the unemployed. At the time, he
thought a system of three east-west and three north-south routes would be enough.

At the same time, Congress also got into the act. The Federal Highway Act of
1938 directed the Bureau of Public Roads to study the feasibility of a six-route toll
highway network. In its 1939 report, "Toll Roads and Free Roads," the bureau
concluded that with some exceptions, the "amount of transcontinental traffic was
insufficient to support a network of toll superhighways." The report recommended a
43,000-mile non-toll highway network in its "Master Plan for Free Highway
Development." This proposal called for highways to follow existing roads whenever
possible, have more than two lanes of traffic available if traffic required it, and be
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limited-access in high-traffic areas. In the large cities, the proposal allowed for above-
or below-grade intersections and limited-access belt lines surrounding the central
business district to permit traffic to bypass the inner city and to link intercity
expressways. Roosevelt enthusiastically approved the report and sent it to Congress on
April 27, 1939, saying that instead of imposing user tolls, the cost of highways could be
recovered by selling off federal land along the right-of-way (ROW) to homebuilders
and others. Critics in and out of Congress condemned this suggestion as a "socialistic
scheme to transfer the cost of providing deluxe highways from those most benefited to
the already heavily burdened landowner." Overall, however, reaction was favorable
within the highway community.

With the outbreak of World War II, the need for a national system of highway
dropped in priority. However, toll roads were being built by the states. When the
Pennsylvania Turnpike (now I-76 and I-70) opened to traffic on October 1, 1940, it was
the prototype of the modern, high-speed interstate highway. In New York and
Connecticut, the Hutchinson River Parkway and the Merritt Parkway, both toll roads,
proved highly profitable. Other freeways and toll roads were incorporated into the
interstate system at the time of its creation in 1956. As the war began to turn in the
allies' favour, attention refocused on the federal highway program. The Federal-Aid
Highway Act of 1944, enacted after nine months of intense negotiations in Congress,
was the largest highway bill in history, even though it did not meet the expectations of
the administration and the states. Its net effect was to maintain the status quo. However,
it did authorize a limited 40,000 mile National System of Interstate Highways, to be
selected by the state highway departments, to connect the major metropolitan areas and
to serve the national defense. But the act was passed without any provision for
construction funds because Congress rejected the President's suggestion for raising
money by selling off excess rights-of-way.

The Public Roads Administration (PRA), the successor agency to the Bureau of
Public Roads, was responsible for formulating an interstate highway system based on
the states' recommendations. On August 2, 1947, after a year of negotiations, a 37,681-
mile system, including urban thoroughfares and circumferentials, was approved. Also,
design standards for the interstate system were developed by the PRA, along with the
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American Association of State Highway Officials (AASHO). These standards,

approved August 1, 1945, "did not call for a uniform design for the entire system, but
rather for uniformity where conditions such as traffic, population density, topography,
and other factors were similar." Most highways would have at least four lanes with
limited access, but lesser highways (two lanes with at-grade intersections) would be
permitted if there were low traffic volumes. Construction of the system was slow.
Many states did not wish to divert federal-aid funds from local needs, others
complained that standards were too high, and still others determined that toll roads
were needed because federal funding was so low. And in 1950, the Korean War
distracted policymakers. Adequate federal funding for the interstate system was still not
forthcoming. The Federal-Aid Highway Act of 1952 authorized $25 million for the
system on a 50-50 matching basis. These were the first appropriated funds actually
dedicated to the system, even though it was only a "token amount."

Eisenhower makes interstate highway a top presidential priority

But 1952 also brought a presidential election, which swept into office the same
man who had been appalled by the conditions of roads in 1919 and impressed by the
German autobahns in 1944. One of Eisenhower's top priorities upon becoming
President was to secure legislation for an interstate highway system. Since his first year
in office, 1953, was dominated by the Korean war, he did not raise the highway issue
until 1954. That year, Congress passed the Federal Aid Highway Act of 1954, which
authorized $175 million for an interstate system, to be distributed on a 60-40 federal-
state basis. Signing it, however, Eisenhower called it merely "one effective forward
step." More, he believed, was needed.

In July 1954, he brought up the idea again, and a conference of state governors
at Lake George, New York, provided the setting. Eisenhower was unable to attend
because of his sister-in-law's death, so he sent Vice President Richard Nixon to deliver
his message to the governors. The legislation he had signed a few months earlier, he
told them, was a "good start," but a more comprehensive interstate network of
highways was needed to reduce the number of highway deaths and injuries, cut down
on delays because of detours and traffic jams, reduce the amount of highway-related
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litigation, and allow more efficient truck transportation of goods. And, he added, the
system was needed to address "the appalling inadequacies to meet the demands of
catastrophe or defense, should an atomic war come." Eisenhower also proposed a self-
liquidating financing system that would avoid debt.

The proposal excited the governors, and the President named a special panel to
study the problem. Headed by retired Gen. Lucius D. Clay, it gave its report to the
President early in 1955, and he forwarded it to Congress. The panel called for a Federal
Highway Corporation that would issue bonds to build the system and for a gas tax to be
used to retire the bonds over three decades. The cost of building an interstate system of
highways would be about $27 billion, it said, with $25 billion of it coming from the
issuance of the bonds. Members of Congress, however, had their own ideas. Legislation
calling for an interstate system with 90 percent federal funding was defeated even after
intense efforts to strike a compromise that would have wide appeal. In his State of the
Union speech in January 1956, Eisenhower tried again. And the Bureau of Public
Roads issued a book, General Location of National System of Interstate Highways, that
showed where interstates would be located in and around the nation's largest
metropolitan areas. Opponents to the funding mechanism in 1955 were now agreeing to
some increases in the gas tax.

With Eisenhower standing firm for legislation to create the interstate system,
Congress went back to work on it, and finally produced legislation that called for 90
percent federal funding, with money coming from a Highway Trust Fund that received
the revenue from the federal gasoline tax. The final version also reflected a compromise
on how the funds would be apportioned among the states, and it contained provisions
on uniform design standards, inclusion of existing toll roads, and the wage rate to be
paid on these federal construction projects. It also permitted use of federal funds to
purchase the rights-of-way for the roads and allowed two-lane segments, although later
legislation required all parts of the system to be four-lane, limited-access highways. On
June 26, 1956, both the Senate and the House gave final approval to the compromise
version and sent it to Eisenhower, who was in Walter Reed Army Hospital with an
intestinal ailment. There, he signed the Federal-Aid Highway Act of 1956 privately,
without ceremony, on June 29, 1956.
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Interstates transform America, spur mobility, increase commerce

Today's interstate highway system first envisioned in the 1930s, then enacted
two decades later after Eisenhower put his considerable prestige behind it has had a
tremendous impact on the country. While created in part to help defend the nation in
the event of an emergency, the interstates with limited access and many lanes, have also
spurred and speeded the development of commerce throughout the country and abroad.
Trucks move quickly from one region to another, transporting everything from durable
goods and mail to fresh produce and the latest fashions. And they have increased the
mobility of all Americans, allowing them to move out of the cities and establish homes
in a growing suburbia even farther from their workplaces and to travel quickly from
one region to another for vacation and business.

But the interstates have also increased congestion, smog, and automobile
dependency. The shift to the increasingly outward bound suburbs has caused a drop in
population densities of urban areas, and the ease of long-distance travel on high-speed,
limited-access highways has contributed to the decline of mass transit, such as rail and
bus. During the decades of its construction, the interstate highway system was the
largest public works project in American history - pumping billions into the nation's
economy all over the country. Today, it still has an economic impact because of the
continued maintenance and repairs needed for the roadways. In 1990, on the centennial
of Eisenhower's birth, President George H.W. Bush redesignated the interstate system
as the Dwight D. Eisenhower National System of Interstate and Defense Highways.

One of the system's longest roadways, Interstate 80, would be quite familiar to
Eisenhower today. It starts just across the Hudson River from New York City, then
goes through New Jersey and Pennsylvania, and into Ohio, where it then follows
generally the route of the 1919 Army convoy to San Francisco that stoked an interest in
roads for the young Army officer from Kansas. For both U.S. and interstate highways,
north-south routes carry odd numbers, while east-west routes have even numbers.
Interstate 90, which runs from Boston to Seattle, is the longest, at 3,020 miles. The
shortest, not counting spurs and beltways, is Interstate 73 in North Carolina, running 12
miles from Greensboro to Emery.
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APPENDIX 14
INDUSTRY REFORMS BY CHINA FOR IMPLEMENTING
NATIONAL TRUNK HIGHWAY DEVELOPMENT PROGRAMME
(NTHDP)

The Expressway Network of the People's Republic of China is one of the

longest in the world developed under National Trunk Highway Development
Programme (NTHDP). The total length of China's expressways is 50,000 odd km at the
end of 2008, the world's second longest only after the United States and roughly equals
that in Canada, Germany, and France combined. In the year 2008 alone, 6,433 km
expressways were added to the network i.e., @ roughly 20 kms/day vis-a vis 5 kms/day
under NHDP in India. Expressways in China are a fairly recent addition to a
complicated network of roads. China did not have an inch of expressways before 1988.
Until 1993, very few expressways existed. Development of roads and road transport
has been assigned strategic importance in the economic development of the country
since the implementation of the reform and opening up policy in 1978. In 1992, the
State Council issued a National Trunk Highway Development Program (also known as
“5-7 National Trunk Highway Development Plan” or NTHDP), consisting of five
vertical (N-S) and seven horizontal (E-W) routes with a total length of 35,000 km, to be
developed for implementation in 15 years. However, the government has achieved this
target much sooner and over 45,000 km expressways have already been built by the end
of 2007. In 2005 the Chinese Government issued the revised “7-9-18” Expressway
Trunk Development Plan, to expand the initial “5-7” plan to have expressways link all
provincial capitals and all the large and medium-sized cities with populations of more
than 200,000. This was to be achieved by the construction of 7 vertical, 9 horizontal
and 18 expressways linking the others through radial and grid patterns to maximize
coverage and connectivity. The current NTHDP target is to complete 85,000 km by the
end of 2020.

The NTHDP has been planned ‘strategically’ to inter-connect the country

through high-speed road corridors connecting all the important centers of activities,
rather than based on a detailed economic analysis, considering projected economics,
centers of economic growth, traffic growth and distribution. The basic approach for
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network planning in China is : (i) the tree rooted at Beijing connecting all the provincial
capitals, (ii) all chords connecting provincial capitals, (iii) all cities with population
over 200,000, (iv) all rail hubs, (v) all ports, (vi) all major airports, and (vii) the old
trading routes. The following reforms carried out by Chinese in implementing the grand
highway programme NTHDP are worth emulating.

ƒ Building Management and Technical Capacity - At the beginning of the expressway

planning in the late ‘70s, the Chinese construction industry had no experience of high-
quality design, procurement, construction and management of highways. The
expressway expansion was discussed and planned for 10 years before it really took off
in 1988. Major challenges in the 1980s were to provide an efficient highway network
which could meet the needs of various clusters of the society; to cope with rapid traffic
growth on major transport corridors; to provide fast highway linkages between
developed and under-developed regions; and to reduce high accident rates due to the
lack of separation between fast and slow-moving traffic. The common debate among
policy makers was to decide whether China really needed an expressway system. What
about the financing and in-house technology? Was China’s construction industry
ready?

All companies in China were state-owned enterprises (SOEs) but none were
adequately experienced to undertake the new expressway expansion on their own. The
government of China understood that international contractors who undertake mainly
large scale and technically complicated projects would bring to their Chinese
counterparts advanced technology, improved management techniques and modern,
high-tech equipment. They therefore invited the international contracting community to
become involved with their initial expressway projects, but with strict requirements that
all contractors had to bid the project as a joint venture with local Chinese construction
companies as partners. This was specifically required to ensure that the local highway
construction industry could benefit from technology transfer and develop its own
capacity. The international contractors attracted to China were mainly from Hong
Kong, Japan and South Korea.
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Ministry of Communications (MOC) reported that in the early stage of

expressway development they facilitated bringing together 500 road engineers from
several SOEs and formed a team which brainstormed and developed a blue print for the
NTHDP. Ably assisted by some international specialists, this task force reviewed the
international (mainly USA, Australian and Japanese) standards and developed the
expressway standards and specifications to be adopted for China. The MOC organized
training to build capacity in the provincial agencies, while provinces dispatched study
tours to other countries to improve their knowledge. During these early days China was
learning and building capacity.

ƒ Evolution of the Industry Structure - Prior to 1976 during the leadership of Mao
Zedong business enterprises and communes, including construction organizations, were
all directly controlled by the central or provincial governments. This was the time of
the “iron rice bowl”, when enterprise workers were guaranteed life-long employment
and security even if the enterprise was over-staffed and lacked financing to provide
adequate services. Construction was viewed at this time as a simple activity of
assembling materials, plant and other items made by the other sectors of the economy
to create building or civil engineering works and was considered to add no significant
value to the total social product. Most of the central ministries formed their own
construction companies to implement their own specific capital projects.

In December 1978 the Chinese Government announced the decision to shift the
focus of its work from class struggles to economic development. This historic decision
catapulted a major economic reform. The need for reform in China was highlighted by
the problems with the SOEs. In 1984 it had been recognized that the policy of using
SOEs as a social framework for employment was leading to major inefficiencies and
debt due to bloated pay rolls, redundant construction, and incompetent management.
Accordingly the Government introduced a “responsibility” system for enterprise
managers to separate economic management of the enterprise from political presence
within these organizations. This provided the managers with much greater flexibility
and control over whom they could hire and fire. This in turn led to SOE employees,
who once had a job-for-life situation, now facing job insecurity and working on
 276

temporary contracts. In 1993 the Government decided that due to the inefficient
operation of SOEs, large and medium-sized SOEs should in future be run on a
corporate basis. Accordingly the State Economic and Trade Commission was set up in
May 1993 to formulate sectoral programs for SOE reform. Since 1998 the number of
SOE employees has dramatically reduced and incompetent managers have been sacked.
Many SOEs turned to the talent market for new management recruits, including
attempts to attract foreign managers. The Chinese Government started believing that
construction could be a profit making industry. Agreement was reached on a series of
reform programs which introduced market mechanisms into the construction industry.
The reforms required state bodies to :
• Diversify ownership of construction enterprises.
• Deregulate employment in the construction industry to allow companies to hire
and fire or downsize to reflect the actual market conditions.
• Diversify the business scope of construction enterprises. Deregulate building
materials supply to avoid manufacturing or supply based on central policy rather
than demand.
• Use bidding procedures to allocate construction work.
• Bring the construction industry under the unified administration of the Ministry of
Construction (MOCn) and its local agencies.
• Further privatize the state-owned construction enterprises.
• Separate field operations from management.

In many cases the SOEs were assigned to provinces, autonomous regions,

municipalities and counties, for the purpose of carrying out construction projects in
those areas –a practice continued to the present. The companies assigned to local
governments are normally grouped in one or more corporations that report to the local
construction commission. These corporations plan, organize, direct and coordinate the
activities of the subordinate companies. At present there are about 1,000 such
construction entities and 400 design institutes employing about 2.2 million workers.
Out of those about 500 firms are in the Class A category, with some having annual
turnover in excess of $ 30 billion. In addition to the SOEs there are collective
construction enterprises in both urban and rural areas that have expanded rapidly since
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the 1984 reforms. Urban collectives have been developed and are under the
administration of Municipal, Borough, District, and Town Governments or Community
Committees. They are normally given small and relatively simple work to complete and
act somewhat like a small public works unit. There are approximately 25,000 urban
collectives. Rural collectives or brigades are owned and run by townships or villages
and are employed to build houses or small projects. There are currently some 50,000
such brigades in China. They are normally restricted to their own communities,
although they can take part in projects in other parts of the country with permission
from the local construction commissions. Both urban and rural construction brigades
are allowed to work in urban areas as either a general contractor, subcontractor or a
labor-only contractor on major works for the SOEs.

From the start of the expressways program it was established that the provincial
governments would be responsible for the design, implementation and construction of
the expressways and each province had its specific SOE teams to complete the work.
The quality was initially not good but it improved gradually with imported technology
and the experience of working with international consortia. Every project they
completed led to greater experience and the number of teams developed rapidly. In the
early days the provincial communications departments would tend to use their local
construction enterprises, but the principle of competitive bidding became very well
established in China and SOEs centrally and provincially were permitted to bid against
each other for contracts. This led to a strengthening of the industry’s capacity through
good and transparent business practices.

As the expressway program developed, small entirely private enterprises were

spawned from the SOEs. These are still small and are normally specialist
subcontractors. The general consensus is that the prospect of large, fully independent,
private construction companies being created in China is not likely in the near future,
due mainly to the competition and experience of the SOEs. However the reality is that
the large SOEs are, in many cases, operating according to the same market principles
and forces as a completely private company and enjoy substantial private ownership
through share holdings. According to some estimates, the Chinese highway
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construction industry has developed its capacity to a level estimated at three times
greater than demand, so China’s construction capacity is now being exported.

ƒ Building Manpower Capacity - China enjoys wide manpower resources from the
many central and provincial SOEs. It was only up to the mid/late 90s that the capacity
was considered to be insufficient to meet the demands of the expressway program. The
Chinese highway industry rapidly learned from their international joint venture partners
and the MOC now reports that it is now unusual to require the assistance of the
international highway building community on expressways. The process by which large
SOEs win expressway bids in the provinces and then hire smaller SOEs and private
subcontractors to complete specific sections or supply particular trades on the project
has rapidly developed the supply chain for manpower in the industry. There are also
technical colleges and professional schools where some higher caliber labor can be
trained. Skilled operators for plant and equipment have been trained initially by the
international machine manufacturing companies who, when selling plant and
equipment to Chinese companies, arranged either to train operators in their own
country and/or to send trainers to China with their equipment to work alongside the
trainee operators. There has never been a shortage of high caliber civil engineers in
China. The profession is highly regarded in the community and salaries are higher than
the average for other professions and even the IT industry. There is great competition
for students entering civil engineering streams in certain universities, and particularly in
certain institutions.

ƒ Procurement and Legal Framework - In 1996, a Construction Law was prepared by

the Central, Provincial and Municipal Governments to unify all issues such as
qualifications for entry into the construction industry, procurement, delivery of works,
construction supervision, safety and quality, legal liability, market regulations and
procedures in construction projects. The law integrates all existing construction related
regulations issued from different sources and was intended to govern all activities in the
construction industry. It was enacted in November 1997 and put into effect in March
1998.
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Since 1984, China has been pursuing project bidding for contracts [Daud
Ahmad and Zong Yan 1994]. Generally contracts are competitively bid as regular price
contracts based on a bill of quantities and the winning SOE then sublets to smaller
subcontractors. Sub-contracting is capped at 30% of the overall contract value.
Occasionally SOE contractors may be awarded a contract through a negotiated
agreement, but this is only for a very small portion of the projects. If private money is
being used through a concessionaire contract, the concessionaire may elect to use a
particular contractor or the contractor may be part of the concessionaire’s venture.
There has also been a growing acceptance in China to use other forms of procurement
such as Design Build/ Turnkey and BOT. However, the use of BOT has been seen not
to be too successful in the Chinese highway construction market.

Up to 2003, competitive bidding had been recommended but was not

mandatory. This changed in May 2003 when “Measures on Tenders and Bids for
Contracts for Construction Projects” became effective. These measures provide
procedural and substantive requirements for the tendering, bidding, opening of sealed
tenders, evaluation of tenders, declaration of winning tenders and the awarding of
contracts. It is a process that is mandatory for the selection of a contractor for all
projects where the size falls within the scope set by the Rules on Standards of the
Scope and Size of Construction Projects for Tenders. The bids are highly competitive
and it was reported by the MOC that for highway projects on average bids come in
about 20% lower than the estimated costs. Transparency International reported in May
2004 that “China is leading the way in introducing international best practice into its
tendering and project management anti-corruption systems”. China has also recently
(2004) introduced blacklisting measures for any companies found to be guilty of
bribery or corrupt practices.

ƒ Project Management - The Project Implementation Units (PIUs) or the ‘legal

persons’, as they are called in China, are set up for each project. These units have a
high degree of autonomy in project implementation and are fully accountable for timely
and quality completion of the project. Such units are typically headed by an officer of
Chief Engineer rank ably supported by several competent construction engineers and
 280

managers, engaged for the full project term and rotated from one project site to the
next. Typically for an expressway project (of say 100 km) the PIU consists of a fully
dedicated team of about 50-60 staff. It is responsible for overall project
implementation, including procuring and managing design and construction supervision
services, carrying out pre-construction activities, and procuring and managing the
construction contracts. The Finance Bureau in the respective province plays a key role
in overall coordination, management and monitoring of project implementation. The
Finance Bureau’s anticorruption department (equivalent to CVC in India), audit
departments and comprehensive department (responsible for overall coordination
among various agencies) are fully involved during implementation and collectively
endorse large contract variations (above 15% of contract value).

Urban transport projects are often completely located within a municipal area.
This is the case of World Bank-financed projects in Wuhan and other large cities such
as Shanghai or Tianjin. In such case agencies in charge of road construction, bus
operation and several utilities report to the same vice-mayor. This reporting relationship
facilitates the coordination and speedy implementation of urban road transport projects.
However, such institutional integration does not extend to rail systems, nor to traffic
police, making coordination with them difficult. [Some projects have been complicated
by the allocation of responsibility for the inner city to the municipal counterpart of the
Ministry of Construction, while responsibility for the suburbs rests with the counterpart
of the Ministry of Communications.]

ƒ Project Preparation - Surveys and Design - Great attention is paid and precision is
attached to surveys, investigations and detailed project designs. In China, there are
about 15,000 qualified highway design engineers employed in 410 large (Class A and
B combined) survey and design institutes in the 31 provinces. In addition, there are
several hundred small Class C design institutes responsible for design of rural and
lower category roads. Entry requirements to the design institutes are often quite
stringent and a Masters degree in a relevant field is a minimum. These institutes attract
the best talent, as salaries offered are substantially higher than those in construction.
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Precision and advanced topographic survey methods (like aerial

photogrammetry and GPS) are followed and due care is taken in quality control, as
surveys, investigations and designs are carried out by the same agency. China follows a
lifetime accountability system for project designers and constructors, which creates a
strong incentive for quality and precision in designs. It is well recognized that designs
are dynamic in nature and the core design team is maintained are unheard of in China.

For a greenfield expressway project (of say 100 km length) concept to detailed
design typically takes about 36 months, almost the same time required for construction.
The cost of designs is typically 2.5 to 3% of the overall project cost (compared to about
1% or less in India). There are also several levels of checks and balances in the design
process. After the preliminary concept designs and alignments are verified by the MOC
and the National Development and Reform Commission, the detailed designs are
assigned to the provincial survey and design institutes. Further, the detailed designs are
independently verified by other competent design institutes and academicians in
reputed institutes. Moreover, the survey control points are handed over by the designers
to the implementing agency and the contractor(s) after a thorough joint verification at
the start of construction and the designers remain liable for any clarifications on the
survey issues during the entire period of implementation. The result of this strong
review and checking procedure is fewer design changes or surprises during
construction in China.

ƒ Project Preparation – Preconstruction Activities - In China land is collectively

owned and is usually acquired for public projects by land redistribution among the
affected communities. Loss of livelihood is also compensated with generous benefits,
including resettlement housing and sometimes with job guarantees. The provinces
negotiate with the local counties and villages for redistribution of land and provide
adequate compensation for the households.

Typically 100% of land acquisition and 90% of pre-construction activities are

completed before the contracts are awarded and projects spend up to 5% of the overall
cost for such activities. Special rehabilitation cells are formed as part of the project
implementation units to handle the land acquisition and resettlement issues. Usually
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land acquisition is completed in a month, while resettlement and rehabilitation

activities take about 5-6 months. Moreover, utility relocation is usually well
coordinated among the implementing agency and other utility agencies and the
provincial Finance Bureau also plays a coordinating role to expedite such relocations.

ƒ Project Supervision - The supervision team at project level is composed of Provincial

Government staff led by the Chief Engineer, fully authorized to make on-site decisions
and to issue instructions. Design engineers are available to guide supervision staff
throughout the construction period. The supervision is quite manpower intensive. To
give an example, for a 100 km long expressway about 150 full-time supervision staff
are employed for the full duration. The highway/expressway works are typically
implemented in two stages. In the first stage earthworks, protection works, cross
drainage and bridge works are undertaken in contracts of about 10 km each stretch. In
the second stage all pavement works, road furniture, electrical and mechanical (e.g.
traffic signals, lighting, and ventilation in tunnels) and other finishing works are taken
up in contracts covering stretches of 30 to 40 km. The time duration for each stage is
about 18 months for a new greenfield project. Usually all projects are completed in
time and within cost, in spite of no provision of penalties for late completion in the
contract. Completion dates (with countdowns) are publicly displayed and delay in
completion is considered a failure on part of both the implementing agencies and the
contractors, which carry with them substantial reputation risks.

During implementation, four levels of quality control are exercised. While

intense supervision is carried out by the project implementation unit and the
supervision consultants supporting the implementation units, periodic inspections are
carried out by MOC and also the local community (called social inspection). The
construction enterprises also perform their own ‘enterprise self checking’ to ensure
strict quality control. Mobilization requirements are quite stringent. To cite an example,
the contractors for structural works have to mobilize at least 25% of the formwork
required so that the structures can be completed in 4-5 pourings. Use of mobilization
advances (typically 10% of the contract) is closely monitored by the implementing
agency, and joint accounts operated by joint signatures are set up for all expenses out of
the advance. Advanced resource-based project management tools are employed for
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monitoring project progress. All contracts have dispute resolution provisions that
include adjudication, through an individual adjudicator or a dispute review board
(DRB), followed by arbitration as the next step. Due to the Chinese culture that
encourages a team approach to resolving problems, disputes are generally resolved
rapidly and at site level. Apparently it is considered a failure on behalf of the project
team if a dispute were ever to get to arbitration and the actual use of the adjudicator or
DRB on highway projects has generally not been necessary, due to the intent of all
parties to resolve issues as they occur.

ƒ Vender Qualification And Credit System - The MOC is responsible for managing the
qualification and performance management system of Project Legal Person,
Contractors, Supervision Enterprise and Survey/Design Enterprise in the country, in
close coordination with the provincial communications departments. The MOC and
Provincial Communication Departments are responsible for appointing the Project
Legal Person for each project. Project Legal Persons are classified as Class A for all
classes of highways or Class B for just Class II highways and below.

Contractors: Construction agencies are broadly divided into three categories: General
Highway Construction Contracting Enterprise (highway, railway, hydraulics etc),
Professional Contracting Enterprise (bridges, tunnels etc) and Labor Subcontracting
Enterprise (by the type of work). The classification ‘General Highway Construction
Contracting Enterprise’ is further divided into three categories, namely Highway Road
Surface Project Professional Contracting (pavement works), Highway Roadbed Project
Professional Contracting (earthworks) and Highway Transportation Project
Professional Contracting. The following are the classification/qualification categories
and numbers of General Highway Construction Contracting Enterprises in China:
• Special Class Enterprise&General Project Contracting (7 )
• Class I Enterprise&Highway Projects of all Classes (482)
• Class I Professional : Highway Projects of all Classes (79)
• Class II Enterprise& Highway Projects of Class I and below
• Class III Enterprise& Highway Projects of Class II and below
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Supervision Agencies: Project Supervision Enterprises are classified into three grades
(A, B and C) and three specialties (special independent bridge, special independent
tunnel and electrical-mechanical engineering). Grade A and B are approved by MOC,
while Grade C is approved by PCDs. There are 270 Grade A, 100 Grade B and 300
Grade C supervision enterprises in China.
Survey and Design Institutes: Survey and Design enterprises are also classified into
three grades (A, B and C). Grade A and B are approved by MOC, while Grade C is
approved by PCDs. The following are the classification criteria and numbers of survey
and design institutes in China:
• Grade A divided into highway, bridge, tunnel and transportation projects (150)
• Grade B Highways of Class II and below (300)
• Grade C Highways of Class III and below (1000)

Highway Construction Credit System: The MOC has recently set up a national
highway construction enterprise information system, and some provinces are also
developing provincial information systems. These systems are intended to share the
classification and credit rating of these enterprises among stakeholders, including the
public. The MOC is currently working at a five-level credit evaluation system (AA, A,
B, C and D) to monitor performance of the enterprises.

ƒ Road Safety - Road accidents have been a major problem all over the world. Every
year about 1.2 million people are killed and 50 million people are injured on the
world’s roads. In China also, road accidents have been increasing. In 1999 there were
83,500 deaths and 286,000 injuries. These have increased to 98,738 deaths and 469,911
injuries in 2005. China’s accident rate of 7.6 deaths per 10,000 vehicles is high
compared with the accident rates in countries like the USA, Japan and Malaysia.
However, China is addressing the road safety issue in a comprehensive manner
following international best approaches. These include collection and analysis of road
accident data, setting targets for improved safety, defining the agencies responsible for
achieving them, enacting legislative procedures for supporting interventions, and
addressing safety issues in all parts of the project cycle i.e. during planning, design,
construction and operation of highways.
 285

During the planning stages of the NTHDP, China developed standards for the
highway system to be adopted for the upcoming highway and expressway projects.
This approach resulted in uniform standards all over the country, fostering uniformity,
reliability and safety during driving. China has been able to reduce the accident rate on
its high-traffic core network by: (a) reducing the number of possible conflict points at
each intersection from over 20 to zero, (b) eliminating slow moving and two-wheeler
traffic on the core network, (c) controlling access to the network through well designed
entrance and exit ramps. The long-distance traffic which uses the expressway network
enjoys the advantages of gentle and long slopes, long curves, long sight distances, good
drainage systems facilitating quick disposal of water and improving skid resistance,
large traffic sign boards, elaborate road markings, crash barriers on the median and
along the sides to avoid head-on collisions and vehicles overturning. These design
features contribute to reducing the number and severity of accidents. The team also
noted that pavement surfacing in China uses relatively open-graded courses with mastic
asphalt, which improve the skid resistance of the surface.

The MOC and the PCDs are responsible for the ‘Engineering’ aspects of road
safety. For ‘Education’ and ‘Enforcement’ the Ministry of Public Security (police) and
provincial communications departments are responsible. The Ministry of Public
Security is also responsible for compliance with regulations on licenses, vehicle
conditions and driver testing. In 2004 the Chinese Government enacted a Highway Law
and its first National Road Safety Law, which define the regulations, agency
responsibilities and implementation arrangements. Enforcement activities undertaken
by Chinese authorities include compulsory seatbelt wearing, speed limit restrictions,
and checking overloading.

ƒ Social And Environmental Aspects - As discussed above, China has streamlined

procedures and policies for land acquisition, resettlement and rehabilitation. In
addition, a social assessment manual has also been prepared jointly by the World Bank
and the Asian Development Bank in consultation with the Chinese government. It is
widely used during preparation of external aided projects. The norms of compensation
are rather generous and the credibility of the government is very high in terms of timely
payments to the project-affected people, thus there is little resistance from the public.
 286

Each major project generally has a resettlement office working from the design stage
through to the construction. The entire land acquisition, resettlement and rehabilitation
activities take about 5-6 months. However, project-affected people are becoming more
active and resettlement implementation time is lengthening in China. The emphasis on
environmental measures like Bio Engineering and drainage is given high priority
during design as well as construction. The team noted some good practice examples for
slope treatment during the field visit using bio engineering.
 287

APPENDIX 15
HIGHWAYS OF DEVELOPMENT

The Government has embarked upon an ambitious programme for the next
seven years (2005-2012) which envisages an investment of ` 2200 billion for
development of National Highways projects. This includes :
ƒ Completion of ongoing GQ & NS-EW Corridors along with Port connectivity
under NHDP Phase I & II
ƒ 4-laning of 10,000 km under NHDP Phase-III (earlier called Pradhan Mantri Bharat
Jodo Pariyojana)
ƒ 2-laning with paved shoulders of 20,000 km of National Highways under NHDP
Phase-IV
ƒ 6-laning of 6500 km of selected stretches of National Highways under NHDP
Phase-V
ƒ Development of 1,000 km of expressways under NHDP Phase-VI
ƒ Construction of ring roads, flyovers and bypasses on selected stretches under
NHDP Phase-VII

Shri Bhupendra Kainthola, Deputy General Manager (Media Relations),

National Highways Authority of India (NHAI) describing the NHDP work as
‘Highways of Development’ states that highways are not being looked upon merely as
a means of transportation, but an integral part and parcel of the physical environment
and socio-economic milieu. Highways are not just roads, there’s more to it than
bitumen and concrete. With a view to making road journey comfortable and convenient
and to reduce the fatigue in a long distance driving, the following aspects were given
due attention as under :
x Corridor Management - Once the construction work is over, the highway is ready
for travel and this is where the connectivity and safety aspect takes over. The
completed stretches are maintained and operated by the Corridor Management
Division with responsibilities that include routine & periodic maintenance, road
property management, incident management, engineering improvement, toll fee
collection and wayside amenities.
 288

x Safety Features - Road safety is an aspect of road building that is never ignored.
The roads are designed by Design Consultants of international repute. Provisions
for flyovers, bypasses, railway over / under bridges, etc are made with an eye on
enhancing road safety. In the Detailed Project Reports (DPRs), provisions are also
made for overhead signs, cautionary/regulatory/informatory retro-reflective
signboards, crash barriers and median railings. For safety of road users during
construction stage, provisions are made in contract documents for safety features
such as advance traffic warning, retro-reflective signs and reflective lights at
hazardous locations.
x Operation & Maintenance - Several initiatives have been taken to ensure safe and
comfortable journey on completed corridors of National Highways. They include
thermoplastic line marking on carriageway, crash barriers at the location of high
embankment and curves, railing at the central median and service road in urban
areas to prevent crossing of pedestrian and cyclists and shrubs/plantations in the
central median to improve aesthetics and reduce the glare of light of vehicles
coming from opposite direction. In addition, there is provision of well-equipped
ambulance with requisite para-medical staff and necessary medical equipments for
every 50 km of completed stretch to provide immediate help to accident victims and
to take them to nearest Trauma care center or hospital. Tow-away vehicle facility is
available for all completed stretches for towing away the broken down or damaged
vehicles from the carriageway. Route patrol vehicle on 24 hours basis are provided
for every 50 km length of National Highway on completed corridors to assist the
road users. Each patrol vehicle is equipped with adequate sign boards, traffic cones,
fire extinguishers, gas cutters, hydraulic jack and first aid kit.
x Wayside Amenities - NHAI has initiated drive to develop comprehensive wayside
amenities for use of highways, which will have provision for refueling,
refreshment, rest and relaxation, separate places for parking of cars, buses and
trucks, workshop for repairs of vehicles, telephones, small shopping centers etc.
x Highway Traffic Management System (HTMS) - NHAI has provided a pilot
project on Highway Traffic Management System on Kotpulti-Ajmer Section of
NH-8. This comprises Emergency Call Boxes (ECB), Variable Message Signs
(VMS), Closed Circuit Television (CCTV), Meteorological data station, Automatic
 289

vehicle counter and classifier (AVCC), Mobile Radio System and Control Centre.
Another HTMS is now operational on the recently-completed Jaipur-Kishangarh
highway.
x Green Highways - Since most stretches of the National Highways were still two
laned at the time of taking up NHDP, widening of these stretches was the primary
task. The first adverse consequence of widening, from environmental point of view,
was inevitable felling of trees grown along the highways. However, in order to save
maximum possible number of trees from felling, a conscious decision has been
taken to restrict widening of the highways to one side only, wherever feasible. This
has, indeed, saved a lot of trees. Any loss of trees is sought to be offset by planting
at least double the number. Not only this, following the approach of “Corridor
Development & Management”, rather than “Highway Development” NHAI plans to
enhance the aesthetics of the highway corridor from all possible angles. The main
objectives of planting along the Highways are :
ƒ Aesthetic enhancement of the project corridors and places of historical and
cultural importance by planting selective ornamental trees, landscaping and
turfing with grasses and shrubs.
ƒ To reduce the impacts of air pollution and dust as trees and shrubs are known
to be natural sink for air pollutants.
ƒ To provide much needed shade on glaring hot roads during summer. To reduce
the impact of ever increasing noise pollution.
ƒ To arrest soil erosion at the embankment slopes.
ƒ Prevention of glare from the headlight of incoming vehicles.
ƒ Climate amelioration and moderating the effect of wind and incoming
radiation.
ƒ To define the ROW especially highlight sharp horizontal curves during night.

Till June 2005, plantation had been carried out along the substantially
completed section of NHDP Phase I. Over 500,000 trees had been planted along nearly
1200 km of avenues - of these over 37 thousands are fruit-bearing trees - while about
0.75 million saplings were planted on 1600 km of highways along the median. Andhra
Pradesh and Tamil Nadu top the list of states with high plantations. In Andhra Pradesh,
on the Chennai-Kolkata corridor, nearly 260,000 avenue plantations and 200,000
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median plantations had been carried out. In Tamil Nadu, on the Mumbai-Chennai
corridor of GQ, nearly 60,000 saplings have been planted along the avenue and 18,000
on the median, covering 62 km and 29 km respectively. In Maharashtra, on the Delhi
Mumbai Corridor of GQ, nearly 23,000 saplings have been planted on avenues over 57
km. In addition, tree plantations have been carried out in Assam, Bihar, Jharkhand,
Gujarat, Karnataka, Rajasthan and Uttar Pradesh.
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