Infravisioning: Nine Reasons India Needs A New Highway Services Authority
Vinayak Chatterjee's Infravisioning video series analyses and explains developments in India’s infrastructure sector to the BQ Prime audience.
Edited excerpts of the video:
The recent high-profile accident involving Cyrus Pallonji Mistry has clearly brought the issue of road safety again to the forefront in national discussions. But it's is not the only issue why India needs a new Highway Services Authority.
There are nine reasons.
Reason number one is the organisational DNA of the National Highways Authority of India. Every organisation has a core purpose, often referred to in management circles as its DNA.
So the DNA of Bharat Heavy Electricals Ltd. is to produce power generation equipment and the DNA of the NTPC Ltd. is to produce power. NTPC doesn't produce equipment and BHEL does not produce power.
In a similar vein, the DNA of the National Highways Authority of India is to construct. The NHAI has rightfully earned laurels over the last two-and-a-half decades in terms of its huge success and frenetic activity in rolling out India's national highways.
But the point to note is that the core purpose or the DNA of NHAI is to continue to be a set-up that builds and constructs roads. Remember, construction itself is not a simple task. It comes associated with a variety of activities, planning, engineering, land acquisition, utilities removal, state support agreements, forest environment and related permissions, consultant and contractor management, fundraising, project and programme management and, of course, litigation management.
You will agree that this is quite a handful and without doubt, the pressure to continue to construct India's highways at a furious pace will continue in the foreseeable decades. India will still have to build thousands of kilometres of greenfield expressways, expand brownfield carriageways, and construct tunnels, bridges, flyovers, and bypasses. So, it's best to allow and encourage NHAI to stick to its core competence of construction.
However, the demands and requirements of the softer services side, of making infrastructure hardware deliver services, and here the highways landscape has changed dramatically. So, let the DNA of the proposed Highway Services Authority be services and not construction. That was reason number one.
Reason number two is clearly, once again, to have an intense focus on prevention of road accidents. India accounts for 11% of global deaths in road accidents, according to the World Bank.
Transport Minister Shri Nitin Gadkari has been quoted as saying that India's road accidents are far more serious than the Covid-19 pandemic. India has about 4.5 lakh crashes per annum, in which 1,50,000 people die.
Road safety involves a chain of interventions from safety in design of roads to start with, and then moving on to strict enforcement of traffic discipline, provision of emergency medical services and vehicle safety features as well as regular route patrolling. This is reason number two.
Reason number three is customer satisfaction on India’s highways, or what is often referred to as driving comfort. Driving comfort comes from impeccable road maintenance and a hassle-free driving environment.
There is increasing public anger about the poor driving experience on Indian roads, even after paying tolls and that there seems to be no correlation between the charge for a service, which is the tolls, and the assured delivery of the service itself. Highway amenities of international standards are singularly lacking too. That's reason number three, why we need a new Highway Services Authority.
Reason number four is the new generation of tolling technology that requires a separate focus. The new leap of faith is either to have toll collections through a GPS satellite-based system or embedded licence plates that are picked up by some kind of receptors as cars cross toll entities.
Shri Gadkari informed Parliament in March 2021 that within one year, all physical toll booths in the country would be removed and India would choose one of the two models of embedded licence plate recognition or GPS-based satellite systems. Now, that is quite a task and the new services authority should be mandated to implement and maintain this.
That brings us to reason number five–multimodalism. The new National Logistics Policy recognises the interlocking nature of goods movement and that roads are part of a larger system that connects industrial areas, ports and other economic modes.
Intermodality is a specialised discipline. This would relate to increasing the penetration of roll-on, roll-off services with the railways on trunk routes, developing linkages with nascent sectors like inland waterways, coastal shipping, etc. For this reason, to develop constantly seamless multimodalism would be a task of the new Highway Services Authority.
Reason number six is disaster management. Disaster Management will continue to be a recurring necessity for highways. There are always incidents of heavy snowfall, landslides, earthquakes, or nowadays, even long-drawn-out public agitations blocking key highways.
Reason number seven is value capture from ribbon development. It has been a matter of resentment–the rapid escalation of land values that emerge after highway projects are implemented. The value is captured not by the public, not by the state, but by a community of real estate developers. Therefore, concepts such as betterment levies, land banking, value capture financing need to be adopted and implemented.
Aspects like ribbon development rights as well as auctioning of exit points of access control highways has often been discussed, but not implemented. These now require specific attention and so, once again, another good reason for the Highway Services Authority.
Reason number eight is the professional management of investors and public-private partners. Increasing in importance is the whole aspect of professional management of public-private partners. InvITs, Toll-Operate-Transfer or TOT, revenue assurance, build-operate-transfer or BOT, hybrid annuity model or HAM are all different PPP formats that have different sets of private investors and private operating partners.
The gathering momentum towards asset monetisation means that regular interactions are required and necessary between a variety of private partners and the Indian highway system. For this, we require dedicated attention and effort.
This will motivate a new generation of investors to come in and existing investors to be felt needed and serviced. So, a new Highway Services Authority is needed.
The last reason, number nine, is specialised companies are getting formed anyway. There is the existence of a less visible company called the Indian Highway Management Co. Ltd. that handles electronic tolling and related support services for NHAI today.
Recently, the NHAI has constituted another company called the National Highways Logistics Management Co. to oversee multimodal logistics parks and port connectivity projects. This company is also supposed to oversee ropeway projects. Thus, as can be seen, while construction is an important cornerstone of the overall scheme of developing road networks, it has to be acknowledged that these multiple dimensions of service delivery strongly suggest that India needs a new Highway Services Authority.
This new authority should be distinct and distanced from the asset creation role of the existing NHAI, have its own board, its own governance structure and performance metrics.
Vinayak Chatterjee is founder and managing trustee, The Infravision Foundation; and chairman, CII Mission On Infra, Trade & Investment.
The views expressed here are those of the author, and do not necessarily represent the views of BQ Prime or its editorial team.