Why India Needs A Highway Services Authority — Infravisioning With Vinayak Chatterjee

Vinayak Chatterjee: So, this is something I have been saying for quite some time as a keen observer of the highway scene. Now, in this country from 1997 onwards—when NHAI was founded—NHAI has actually become the bellwether of what an infrastructure authority in this country should be. It rightfully deserves our accolades for having built thousands and thousands of kilometres with an aspiration to hit 40 kilometres a day, which is astounding by any world standards, particularly in a country like India.

So, you asked me the question, what does NHAI stand for and I will have to share with you that every institution has a strong DNA. The core purpose for the existence of the institution, and the core purpose of NHAI over the decades has been construct, construct and construct at a frantic pace and it had the benefit of visionary leadership.

Particularly, the last 10 years of Nitin Gadkari have been a great combination of a visionary politician and a fairly dynamic authority. There are critics but overall, one can’t deny that NHAI has done service to the country. ... Let's for a minute spend time on DNA.

Let's take the power sector, the DNA of BHEL is to produce power equipment and the DNA of NTPC is to produce power using that equipment. So, BHEL doesn't generate power and NTPC doesn't make equipment—the DNAs are different, and they complement each other. So, therefore, when you do a deep dive on the DNA of NHAI, you will see that with this big push for construction, construction and construction, it has to handle a plethora of activities linked to the past, which is planning, alignment fixation for highways that often travels through more than two or three states, which is not an easy task politically.

And across various geospatial requirements, engineering, land acquisition, utilities removals, state support agreements, forest and environment related permissions, consultant and contract management, fundraising, project and programme management and finally, litigation management. Now, that’s a handful, when you are doing anywhere between 30 to 40 kilometres a day, and that defines the DNA of the institution.

Vinayak Chatterjee: This is one of my favourite topics right now and I am sure the nation’s bureaucracy doesn't particularly like me for saying this repeatedly.

Here are seven reasons. First is road safety, when you have built and run a vast national highway network of this size and scale—as you know, our record of road safety has been very poor. By all accounts, according to the World Bank, 11% of the world's fatalities (are) occurring in India and Minister Gadkari has gone on record to say that India's road accidents are more dangerous than the Covid-19 pandemic.

India has about 4.5 lakh crashes per annum in which 1,50,000 people die, this is the scale of the problem. So, point number one, why do I need a separate National Highway Services Authority—task number one, concentrate, concentrate, concentrate on everything to do with road safety.

Point number two, customer satisfaction. Today, you are getting drivers of cars as well as multi-axle trucks to shell out a fair amount of toll. Now, the payment for any service by law requires a commensurate delivery of such services. So, does the toll-paying public believe that by paying the toll it is getting the service that it should expect, whether it is waiting time at toll plazas or whether it is service amenities or driving comfort or safety or anything. No, you have to now concentrate on squeezing service delivery.

I mean the Railways have understood this after decades. So, in places like Vande Bharat and all that, the food service, the cleanliness, the timeliness, these are all aspects of service delivery. So, in the road sector, we now need NHAI to focus on customer satisfaction because you are getting the people to pay a huge amount of toll. So, that's reason number two for a separate National Highway Services Authority.

Reason number three, Minister Gadkari has said that we are moving from a physical toll-based system—we have moved to a RFID Reading System- FASTag. We are now wanting to reach to the next stage, which is a GPS-based tolling system, which will track the movement of your vehicle from point A to point B through satellite and GPS connectivity. So, you will only pay for the road that you consume and not for the entire length and it will make it hassle-free—no toll plazas required. So, that's a significant leap of faith in technology. A new services authority will have to manage the installation and maintenance of that system.

The next point is intermodality. The new Gati Shakti, as well as the National Logistics Plan, talks a lot about intermodality of improving our logistics costs related to road, road to rail, to inland water to coastal shipping, etc., and hubs which are multimodal. That requires a different service, orientation and NHAI to get a multimodal mindset. That's another reason why we require a services authority that focuses on this.

Moving on to disaster management. India is a vast and complicated country. At various points of time, there are avalanches and roadblocks in the hills, there is flooding in the plains. There are earthquakes, there are accidents—we need them to focus on a separate disaster management dedicated to the road sector.

The major point that is being missed is the fact that when a road is being built in this country, the land alongside suddenly escalates its value, and the anecdotal evidence is that the land value appreciation can be anything from four times to 10 times. Now, who is getting the benefit of this land price escalation because of public expenditure and development of a road is not you, me or the taxpaying public. It is largely land sharks and real estate operators, who kind of have advanced knowledge of where roads are coming.

So, there is a new model called betterment levies where any transaction that happens within a certain radius of highways, of 500 metres, 1,000 metres, 1,500 metres attracts a differential tax when it changes hands. This calls for a separate session. I will just say betterment levy capturing land value by auctioning exits and similar other models exist where NHAI has to learn to handle creative models of monetising the land around it, so somebody who is specialised has to do it. It is also called human development, betterment levy, etc.  

The last point is that NHAI today has a variety of partners that work alongside it—PPP partners, InvITs, toll operate transfer, revenue assurance—these are all PPP formats, operational and financial. These multiple partners require a certain degree of regular handling, because they are partners in the day-to-day activities. It can’t be left to the construction gang.

So, here I have outlined for you a bundle of reasons why I strongly believe that India has reached a stage, happily so, where traditional NHAI should be left alone for its construction agenda, where we still have a long distance to go, and a separate National Highway Services Authority should be created to manage these seven aspects of services delivery which I have very briefly outlined to you.