Kilometre by kilometre, ndia is building what can aptly be called its national pride.

This is by
way of taking in hand the largest-ever highway project seeking to connect the four corners of
the country as well as the four metropolitan cities with world class roads and uninterrupted
traffic flow. Under this ambitious National Highway Development Project (NHDP), work is
proceeding apace on 4/6 laning of approximately 14,850 km road network through the length
and breadth of the country.
The Prime Minister, Shri Atal Bihari Vajpayee's visionary project, the NHDP's first phase
includes the Golden Quadrilateral which seeks to connect the metro cities of Delhi-Mumbai-
Chennai-Kolkata-Delhi. The National Highways Authority of ndia, an autonomous body
under the Ministry of Road Transport and highways, is executing the project. The originally
stipulated cost of the project is Rs. 60,000 crore.
Under Golden Quadrilateral, so nicknamed because of its geographical contours, manifested
in the linking of the metros, a total of 5,850 km of road length is to be built. Since its
inception the project is racing towards its completion in five years.
n a country where 43 per cent reads are unsurfaced and just 25 per cent motorable, the
benefits of such a project are incalculable. magine that slow movement of commercial
vehicles results in an annual loss of Rs. 30,000 crore. Poor maintenance of the national
highways causes a huge wear and tear and consequent obstruction in traffic flow. n this
backdrop the initiative taken by the Government in the road transport sector to overhaul the
system generates high hopes.
Benefits
The GQ project establishes better and faster transport networks between many major cities
and ports. t provides an impetus to smoother movement of products and people within ndia.
ncrease in speeds due to the reduced traffic congestion helped in reducing travel time for
trucks between Delhi and Kolkata from five days to three days. The related cost of truck
transport has decreased from a baseline of Rs.11 per truck-km to Rs.9.1 per truck-km, a
slightly lower cost than the planned target of Rs.9.9 per truck-km., thus exceeding the two
outcome indicators.
A special feature of this most ambitious infrastructure project is port connectivity. The major
ports such as Haldia, Paradip, Visakhapatnam, Chennai, Tuticorin, Kochi, Mangalore,
Mormugoa and Kandla are also being connected by superfine roads. n plain terms, the
initiative will result in colossal economic and social gains. t will give a big push to the road
construction industry, lead to a huge growth in cement and steel demands, 40 lakh and three
lakh metric tonnes annual requirement, boost trade and business, result in savings in vehicle
operating costs and ensure faster, comfortable, smoother and safer road journeys. Most
importantly, it will generate huge employment opportunities. t is estimated that an average
of 40 persons are engaged per day per km length, creating 73 million mandays in a year. t
will also mean a big boost to the rural economy by way of providing direct and faster access
from the hinterland to the main marketing centers in the metros and other towns.
Apart from the existing world-class roads, the project's focus is on enhanced safety, better
riding surface and road geometry, traffic management and noticeable signages. The other
features are divided carriageways and service roads, grade separators, over-bridges and
underpasses for uninterrupted traffic flow, bypasses and wayside amenities along with
ambulances and cranes. According to a World Bank study, this will result in an annual
saving of about Rs. 8,000 crore at 1999 prices on the Golden Quadrilateral alone.

mpact
4nstructi4n: Maj4r Impact
From a low-technology, low-margin activity undertaken by small contractors, road-building is
becoming a high-tech, fair-margin activity that bigger companies offer. Most large companies
have bid aggressively for contracts in this project, but the likely winners are Gammon,
Hindustan Construction and Larsen & Toubro (L&T), all of which have got lucrative and huge
contracts to execute projects. While all of them are tight-lipped about margins on these
contracts, NHA sources indicate that a provision for a 10 per cent margin is built into most
contracts, which could go as high as 15 per cent through operating efficiencies.
4nstructi4n Equipment: Fair Impact
For the construction equipment industry, the road project has come as a real blessing. With
the NHA estimating an annual requirement of 170 excavators, 140 graders, 280 rollers, 100
transit mixers and 35 batch-mixing plants, the industry is celebrating. n fact, industry
sources indicate that with the advancement of the deadline for completing the first phase of
the project to end-2003, orders of upto Rs 1,800 crore should flow in within the next 12
monthstwo-thirds of the industry's sales last year.
ement: Insignificant Impact
More hype than real numbers. The NHA estimates that the Golden Quadrilateral will
generate an additional demand of upto 4 million tonnes per annum barely 4 per cent of
annual production. Meanwhile, the cement producers' lobby is busy hardselling the longevity
of concrete roads though they cost 10-15 per cent more than bitumen roads. "Cement roads
last thrice as long (30 years) and are largely maintenance-free," says Desh Deepak, COO,
Civil Construction, Punj Lloyd.
Whatever the chances of an increase in demand, there isn't much upside for cement stocks
at their current valuations.
SteeI: N4 Impact
Another hyped-up story: the steel sector will derive no major benefit. The new highways will
use about 300,000 tonnes of steel, according to NHAthat's 1 per cent of the industry's
annual production of 30 million tonnes
Firms in cities affected by the Golden Quadrilateral highway project reported decreased
transportation obstacles to production, reduced average stock of input inventories and a
higher probability of having switched the supplier who provided them with their primary input.

firms in cities affected by the highway project became 7.6 percentage points, or about 60 per
cent, less likely to report that transportation constituted a major.or severe.obstacle to
production, while there was no significant change in the responses of firms in off-Golden
Quadrilateral cities.

Secondly, the differences-in-differences estimate of the effect of the highway construction on
the average stock of input inventories held by a firm is signifcantly negative and large in
magnitude.


Firms on the Golden Quadrilateral highways reduced their average input inventory by 7
days more than corresponding .rms which lay on other highways. Thus, inventory
management became sigini.cantly leaner for treatment .rms relative tocontrol .rms after the
improved highways were put into place.
Firms in cities that gained better highway access were much more likely to have switched
the supplier who provided them with their primary input than firms in cities where road quality
did not improve. firms that gain access to higher-quality highways are able to produce more
efficiently
.
Impact 4n t4ns:

Thanks to the Government's policies of infrastructure-led growth for the country, over the last
few years we have seen the launch of many ambitious projects, such as the golden
quadrilateral and the EW and NS express corridors to improve road connectivity across the
length and breadth of the country and the SEZs to further boost the economy of various
states. Many metros and mini-metros that are well connected by these road projects have
already benefitted immensely with the spurt in investments from private players and foreign
investors in various sectors. The smaller cities/towns in the influence area of these projects
are not left behind and are also set to witness the same trend and become cities of the
future. One such example is Dholera, a greenfield city at 900 square kilometres. Located in
Gujarat along the DelhiMumbai ndustrial Corridor (DMC), it is envisioned to be six
times bigger than Chandigarh.
The cities that lay on the existing National highways connecting the major metropolis were
the ones that benefitted more than the ones that did not originally lie on the existing highway.
Example-Kanpur lay between Delhi and Kolkata and was along the NH-2(NH-2 was
included in GQ);while Lucknow though lies between Delhi and Kolkata, but does not lie
along NH2 but along another NH(that was not a part of GQ).t was found that Kanpur
benefitted more as compared to Lucknow.


Until recently, over 1,350 km long road networks under the Golden Quadrilateral and over
850 km under the Corridor Project have been completed. Many important portions have
already been opened to traffic. Work on the remaining part of the programme is in different
stages of completion. To quote the Prime Minister, when completed, the project will further
integrate our great land through a network of world-class highways. This will place India on
the fast lane to socio-economic development. Indeed, on the highway to prosperity!