A Joint Study Report by TCI and IIM Calcutta – Chapter -1

A Joint Study Report by TCI and IIM Calcutta – Chapter -1

Transport Corporation of India LimitedBy Transport Corporation of India Limited October 27, 2017

Introduction

As on March 31, 2013, India’s total road length network was 5.23 million km, up from 4.24 million km in 2010-11; the road density was 1.59 km/sq. km, more than that of Japan (0.90 km/sq. km), USA (0.67 km/sq. km), China (0.44 km/sq. km), Brazil (0.19 km/ sq. km), and Russia (0.08 km/sq. km)

However, the length of India’s national highways/expressways was a meagre 100,087.08 km2, i.e. approximately 2% of the total road length network, even as they carried 40% of the road traffic. In India, roads and railways carry about 65% and 30%, respectively, of the total freight volume, the rest being carried by waterways and airways.

In 2011-12, the contribution of the transport sector to India’s GDP was 6.5%, out of which roads and railways contributed 4.8% and 1% respectively3. Road freight volumes are expected to increase from 1315 BTKM in 2012-13 to 1553, 1688 and 1835 BTKM in 2014-15, 2015-16 and 2016-17 respectively.



  1. Basic Road Statistics of India 2012-13, Ministry of Road Transport and Highways, Available at http://morth.nic.in/showfile.asp?lid=1762, Last Accessed on December 21, 2015.
  2. List of State-Wise National Highways in the Country, Ministry of Road Transport and Highways, Available at http://morth.nic.in/showfile.asp?lid=1624, Last Accessed on December 21, 2015.
  3. Road Transport Yearbook 2011-12, Ministry of Road Transport and Highways, Available at http://morth.nic.in/showfile.asp?lid=1131, Last Accessed on December 21, 2015.
  4. Report of the Working Group on Road Transport for the Twelfth Five-Year Plan (2012-17), Ministry of Road Transport and Highways, Available at http://morth.nic.in/writereaddata/linkimages/Exec%20Sum%20WG%20RT12th%20FYP-1711921458.pdf, Last Accessed on
  5. Embarking towards the Horizon of Success and Prosperity, Progressive Year Book May 2015, Ministry of Road Transport and Highways, Available at http://pib.nic.in/eventsite/ebook/pdf/ MinistryofRoadTransportandHighways.pdf, Last Accessed on February 24, 2016.
  6. Efficiency Parameters, Ministry of Road Transport and Highways, Available at http://morth.nic.in/showfile.asp?lid=1520, Last Accessed on December 23, 2015.
  7. Roads Min Seeks Rs. 80,000 Crore to Expand Highways, The Economic Times, January 14, 2016.
TCI-IIMC survey reports

However, as mentioned in the earlier TCI-IIMC survey reports, the growth in freight volumes and passenger traffic since Independence far outpaced growth in the development of new roads. There is an urgent need to develop new roads, increase road width (two-lane to four-lane, six-lane and so on), and engage in year round maintenance of new and existing roads so that vehicle movement remains smooth and seamless throughout the year irrespective of the season. Also, the length of national highways and access controlled expressways as a percentage of the total road length network was miniscule compared to other developed and developing countries.

Although Electronic Toll Collection (ETC) initiatives are being undertaken, many toll plazas still employ a manual system for collecting toll, which leads to long queues and considerable waiting times for vehicles before they can pass through toll gates. Vehicles also have to spend a lot of time at different check posts and state borders for documentation checks and the payment of fees and taxes.

Besides, frequent on-road police intervention delays vehicle movement. The National Highway Authority of India (NHAI), through its various road development programmes such as the National Highway Development Programme (NHDP), is committed to build new roads, widen existing roads and maintain new and existing roads.

Many new roads are being developed and maintained in the public-private partnership (PPP) mode where the Government provides assistance in different forms, including financial incentives, to attract private investments in the road sector. A new PPP model for road Construction envisaged by NHAI is hybrid annuity model where the government will finance 40% of the project cost upfront and the concessionaire will be responsible for financing the rest, designing, building, operating and transferring the project to the government at the end of the concession period, i.e. 15 years. The responsibility for toll collection will rest with the government, which would disburse bi-annual annuity payments to the concessionaire throughout the concession period to cover 60% of the project cost borne by the concessionaire. This new PPP model is expected to mitigate the risk and exposure of the concessionaire and attract private investment in the road sector.

As per the Ministry of Road Transport and Highways website, in 2013-146 the average length of road construction was 11.67 km per day. The corresponding target for 2014- 15 is 17.26 km per day.

Also, in 2013-14, less than 10% of the toll plazas were equipped with ETC. In 2014-15, 100% of the toll plazas are targeted to be equipped with ETC.

According to a report7, the Ministry of Road Transport and Highways sought Rs. 80,000 crore from the Ministry of Finance for the financial year 2016-17 to drive highway expansion. Most of the funds will be used in the government’s ambitious Bharat Mala project that aims to build roads along the country’s border and coastal areas, religious and tourist places, as well as district headquarters. The target is to build 30 km per day and accelerate the pace of road construction. The Ministry plans to expand its highway network to 1.5 lakh kmand build 15 more expressways. Although most of the projects will be funded through the engineering, procurement and construction (EPC) route, the Ministry will also seek private participation through PPP including the newly-conceived hybrid annuity model.

The uniform Goods and Services Tax (GST), expected to be introduced from April 1, 2016, is expected to reduce paperwork and check-post delays.

Delays and the corresponding low vehicle mileage cost billions of US dollars (USD) to the Indian exchequer; and every effort should be undertaken to reduce on-road vehicle delays and improve fuel-efficiency so that shipping leadtimes and transportation costs are reduced significantly.

The organization of this report is as follows. In Section 2, results of the survey of 28 major routes are presented and compared with the 2008-09 and 2011-12 surveys.

  • Section 3 discusses the current scenario and prospects of multi-modal transportation in India.
  • Section 4 presents the effect of seasonality on freight transportation by road.
  • Section 5 presents conclusions and recommendations of this study.

TCI IIM

There is an urgent need to develop new roads, increase the widths (two lane to four lane, six lane and so on) of the existing roads, and year –round maintenance of new and existing roads

11.67 – Average rate of road construction (in kms/day), 2013-14

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