(GIST OF YOJANA) Transport
Infrastructure in India
[MARCH-2020]
Transport Infrastructure in India
Introduction:
- The Finance Minister Introduced theInfrastructure portion of her budget
primarily by referring to the National Infrastructure Pipeline (NIP) which
has a five year vision with an investment of Rs. 102.51 trillion.
- Of this, the transport infrastructure investments consist of Rs. 19.64
lakh crore for roads,Rs. 13.69 lakh crore for railway sector, Rs. 1.43 lakh
crore for airports,Rs. 1.01 lakh crore for ports, and parts of urban and
housing (metro, public transport and Electric Vehicles),rural infrastructure
(rural roads) and agriculture (storage infrastructure and refrigerated
transportation).
Key highlights about the investments in transport sector:
- Among roads, railways, airports and ports, the share of investmentis
36%. If we include the other investments, it is likely to exceed40%. In an
overall sense, the transport infrastructure is the most significant
investment in the NIP.
- About 20% (Rs. 19.5 lakh crore) of the total NIP investment is expected
to take place during 2020-21. Towards this, the central budget has allocated
Rs. 1.7 lakh crore for the transport
- ministries and Rs. 0.4 lakh crore for urban transport (Rs. 0.2 lakh
crore)and rural roads (Rs. 0,2 lakh crore).
- The balance would come from internal accruals, borrowings, state funding
and private funding.
- To ensure that such a funds flow happens, it is important that the
policy direction is sustainable, and the use of funds is efficient.
- In the roads sector, the policy thrust is on increased categorization of
national highways (from the current 1.3 lakh kms to 2.0 lakh kms), building
expressways, increased use of electronic tolling and advanced technologies
for traffic control.
- The Delhi-Mumbai expressway is getting immediate attention as
alsoanother 13,000 kms of upgradation of highways. This sector has
experimented with different forms of PPPs, including Build OperateTransfer (BOT),
Hybrid AnnuityModel (HAM) and Toll OperateTransfer (TOT), enabling more
projects to be undertaken.
- However,the roads sector is still affected byland acquisition and
environmental clearances causing significant holdups and time overruns.
Rise of non-performing assets through projects:
- Many of the projects have turned into non-performing assets for lending
institutions. Safety; which is a crucial outcome parameter for the road
user, has still not been addressed comprehensively.
- On the matter of climate impact, the direction seems to be one of
getting away from petrol and diesel and moving towards electric vehicles (EVs),
though the pace of adoption is still open.
- In the rail sector, there has been some push towards reforms in the
recent past. The idea of involving private sector participation in passenger
trains is a welcome move.
- This was a reform that should have happened much earlier. The parallels
in the other transport sectors like road, air and water where services have
traditionally been in the private sector was waiting to be adopted.
- Over the years, there has been thrust on improving technology and
capacity in the railways. The outcome of these is projects related to the
Dedicated Freight Corridor (DFC) and High-Speed Rail (HSR). There Are also
proposals for Semi High Speed Rail Corridors, though there is a debate on
their real efficacy on existing corridors. The Western and the Eastern DFCs
are under construction with parts of them already operational.
- The corridors are expected to be fully operational by 2022. This is
expected to give a boost to freight movement on railways on the high demand
routes and consequently improve passenger train capacity on the conventional
parallel routes.
Challenges:
- There are concerns about pricing and track access charges, and how it
can be best leveraged to ramp up traffic on the DFCs. Another concern is the
availability of rolling stock to utilise the DFC standards.
- While such rolling stock would be useful for pure DFC movement, there
would be a difficulty for moving on the conventional railway lines.
- Depending on the experience of the DFCs, new dedicated corridors(which
are already conceptualised)would be taken up.
- The HSR as a dedicated corridor is under construction betweenAhmedabad
and Mumbai.
- This would run the Japanese style bullet trains at a maximum speed of
320 kmph,bringing the best train time between these two cities from six
hours to two hours.
- The subsequent corridors are being conceptualised, the experience of the
first corridor would influence the way forward.
- India is expected to the fallback option, though with concerns fromAAI
regarding managing many loss-making airports.
- There could even be a question as to whether so many airports are
required and if some of the intended locations can be served from
neighbouring locations by road transport connectivity.
- In the port sector, Sagarmalais a large project-oriented scheme,which is
not proceeding quite at the pace at which it was envisaged.
Challenges:
- The real issue may be one of nature. Ports Need modernisation for
increased efficiency and infrastructure for better connectivity.
- Capacity Additions through new locations may not be a need, unless it is
for captative purpose.
- PPPs have made reasonable inroads into the Centralgovernment driven
major ports, and more as private ports driven by Stategovernments. In fact,
there could possibly be a situation of excess capacity in the container
domain.
- It could also be the ease for coal as the power sector moves away from
coal to renewables.
- Some of the earlier PPPs are not able to do their best due to
restrictive concession agreements. The restructuring of the regulatory
regime which has been under discussion for a long time needs to be hastened.
Connectivity Issues on the land side, especially by rail, should improve
both with the DFCs and the formation of the Indian Port Rail
CorporationLimited (IPRCL). IPRCL was formed in 2015 to improve rail port
coordination.
- The rural road infrastructure has improved significantly over the past
two decades. Continuing Allocations for this are a good budgetary policy.
While rural roads are developing, the opportunities in the agri-supply chain
are yet to be fully exploited.
- The focus on cold chains including the announcement of the ‘Kisan Rail’
is a welcome move. Rail based reefer movement with multimodal connectivity
can enhance the market reach of agricultural products including forexports.
- While the budget has appropriate announcements, as usual, execution
needs attention. Else, we will be making similar announcements as has been
done in the past.
Way forward:
- The current budget proposes a project preparation facility, actively
involving students and faculty from Universities. Such an involvement is
easier said and done. We need to find mechanisms to prepare and create
awareness for the initiative.
- Structural solutions for focus like Sagarmala and coordination like
Indian Port Rail and RopewayCorporation Ltd. (IPRCL) could be used in
appropriate contexts.
- Concession agreements and contracts need a lot more attention, both for
sharpness and flexibility.
- The role of regulators becomes important, since the need is for
‘light-touch’ regulation with maturity.
