The NHAI Crisis Part 1: How many roads do we need?
As per media reports, the National Highway Authority of India (NHAI) has racked up debt of Rs1.78 lakh crore and contingent liability of at least twice that amount.
 
It means theoretically we are looking at about Rs5 lakh crore debt and contingent liabilities. The Prime Minister’s Office (PMO) has asked NHAI to stop building roads till the solution to funding problem is found. So, is it a cause for worry? How should we fix NHAI? The problems and issues with NHAI are multi-fold. In the next few articles we will dissect the problems facing NHAI, the causes and solutions to these problems. We will also analyse the fundamental problems with our transportation policy. 
 
It is not Roads but Transportation that is important
 
Roads are but one piece of the transportation infrastructure. Ultimately, the objective of transportation is to move people and goods over long distances in a cost and time effective manner. 
 
World Bank Indicator called logistic performance ondex (LPI) helps measures the effectiveness of transport infrastructure. It is the weighted average of the country scores on six dimensions: efficiency of the clearance process (i.e., speed, simplicity and predictability of formalities) by border control agencies; quality of trade and transport related infrastructure (e.g., ports, railroads, roads, and information technology); ease of arranging competitively priced shipments; competence and quality of logistics services (e.g., transport operators, and customs brokers); ability to track and trace consignments; timeliness of shipments in reaching destination within the scheduled or expected delivery time. 
 
Germany is the top performer in LPI for 2018 with an overall score of 4.1/5. For comparison, India’s overall score was 3.18/5. 
 
In general, developing countries like China and East Asian tigers hover at around 3.4 mark whereas developed countries are stacked around 4.0 mark. 
 
In a nutshell we can deduce that at same level of infrastructure Germany is able to deliver much better value for logistics. 
 
There are two important take-aways from this. First, no matter how many roads we construct, there is need for supporting soft infrastructure so that the benefits of better roads, railways and ports can evident.
 
Second, all the infrastructure needs to work in an interconnected manner. Thus, there must be effective feeder routes for cargo and people terminals in roads, railways, ports and airports. And the information support should also make transit easier.
 
Road Infrastructure has Two Roles
 
If we imagine transport network as series of hub and spokes, first role refers to trunk routes represent hub-to-hub transport and second role refers to last-mile routes representing the spokes. 
 
In the first role, roads work as an alternative form of transportation between hubs.
 
These hubs can be connected by alternate modes of transport as well. However, India relies more on road transport for trunk haulage than other countries. Other countries use waterways (inland and coastal) and railways as main drivers. 
 
To offset the trunk haulage part of the problem, NDA1, under prime minister Atal Bihari Vajpayee embarked on Golden Quadrilateral project. The project involved making highways connecting the four corners of the country AND two additional roads along the diagonals (East-West and North-South links). NHAI operates in this phase of the transportation network.
 
The last-mile road infrastructure helps all modes of transportation. Thus, you can go to another city by train or by air, but to reach your home, the final part of journey will be made by road. The same is case with goods. The goods may be moved by land (trucks), rail or ship or air, but their last mile journey will be made on road. Thus, last mile road infrastructure is most critical part of the puzzle. 
 
How many roads do we have?
 
Indian road network density is about 1.8 km/ sq. km. For comparison sake, Germany is 1.8, France is at 1.51, UK is 1.64, China is 0.51 and United States is 0.70. For smaller city nation of Singapore, the density is 4.8 while dense Belgium has 5.0. 
 
However, we must be careful in interpreting these numbers. The data simply says length of road. Ideally, lane-kilometres is a better measure. Reporting by various countries may have different units (i.e. km vs lane-km) and hence create discrepancy. 
 
So, does India have more roads than we need?
 
Actually, no. Indian roads suffers from various shortcomings.
 
First, road network depends on density and dispersion of settlements. Thus, China where most of population is concentrated along the east coast can do with lesser road networks. In terms of geography, density and dispersion of population India is closer to European countries than to US or China. 
 
Second, many of the roads, while technically roads, are not usable. Therefore, in many cases it was found that transporters prefer longer routes because they take less time. 
 
Third, Indian efficiency of connectivity is not high. In many cases, the last mile connectivity is missing or grossly inadequate. Ideally, municipal corporations should be developing these roads. However, central government has decided to build some of them under the Bharatmala project.
 
Finally, there are several design inconsistencies. For example, on a single highway, the number of constructed lanes itself and the number of lanes available for traffic keeps changing.  To add to that, the changes are abrupt creating choke points.
 
There are inadequate shoulder lanes for breakdowns, not enough buffer zones at turning points etc. 
 
We need more road projects
 
Despite the number of roads already existing, we need more roads. A large part of this requirement will come from improving old-existing roads, widening them, adding services along the roads.  Some additional hub-to-hub connections will have to be established. In that sense, Bharatmala project is a welcome initiative.
 
We need to bring a more practical perspective to the road infrastructure. It isn’t about simply paving the roads. The number of services needed to support modern road infrastructure is numerous. If we have to improve our performance on LPI index itself, we need to upgrade customs infrastructure, port infrastructure, operator training etc. These, while not directly under the purview of NHAI or road development body, are essential pieces of puzzle.
 
In the next article we will discuss how to manage road projects the right way.
 
(Rahul Prakash Deodhar is a private investor and Advocate, Bombay High Court. He can be reached at [email protected], on twitter at @rahuldeodhar or at his website www.rahuldeodhar.com.)
Comments
Baskaran
2 years ago
I just returned from USA after visiting my children who are in seattle and Chicago. 8 lane roads criss cross the huge country carrying massive traffic and
automobiles with a speed of 1 mile per minute barring peak hours. These roads were built in 1930 to 50 s. Now they are crying that US is lagging behind China by 50 years in infra. Where is India? In stead of creating a scare on huge debts give constructive solutions to monetise the assets. When the private sector is not willing to invest due to various reasons Government has to chip in. Give creative and innovative ideas in fund raising in stead of
crying hoarse on debt. It is inevitable if we have to develop.



Ranbir Lamba
Replied to Baskaran comment 2 years ago
Bribe is deep rooted virus & Babus are never punished. To remove virus pass law like China. Take bribe & face firing Squad. Dereliction of duty punishment hard labour for life .
Then see at 40% of budget all infra are made to withstand 100 years.

No NPA no debt will exist
Gur Amrit Bhalla
2 years ago
Is there any doubt on this issue???!!! India desperately needs all new roads, we cannot commute for lack of good roads connecting the country. There are innumerable accidents, deaths on our tight and potholed roads. If you add more transport vehicles the choked, broken 16th century roads will become worse and what takes us now 6 hours to do 100 KM's will start taking 12 hrs and we will then curse our government. We've suffered for 70 years please give us proper international level roads now, we pay honest taxes for "toilets, gas connections, Jan dhan yojanas, assistance to lower classes" PLEASE all we request you is for good roadsare so we can smile and travel.
Ramesh Poapt
2 years ago
quality... more important than km. is it compulsion?!!
Ranbir Lamba
2 years ago
Haphazard creations & lack of control leads to disaster. Better to move the ladder step by step rather then spread network all over. Now none of roads will be completed & money almost sunk at point of no return. Catch 22 situation

As per media reports, the National Highway Authority of India (NHAI) has racked up debt of Rs1.78 lakh crore and contingent liability of at least twice that amount.

It means theoretically we are looking at about Rs5 lakh crore debt and contingent liabilities. The Prime Minister’s Office (PMO) has asked NHAI to stop building roads till the solution to funding problem is found. So, is it a cause for worry
Gur Amrit Bhalla
Replied to Ranbir Lamba comment 2 years ago
I agree with Ranbir Lamba it is completely a haphazard situation. Construction is underway everywhere, roads are incomplete, before completing a patch they break everything, schedules are not followed, money is siphoned away, contractors leave the job incomplete and run away. The process needs strict monitoring both for quality, responsibility and completion. Even an ordinary village child will tell you this even they know what is happening. Contracts should be given to big
companies. Once punitive action is applied to delayed projects, bad construction things will change. As of now crores of rupees of our country's good money has gone down the drain. Our country needs a new minister and officers of "Vigilance" to really stop corruption which is still rampant.
Ranbir Lamba
Replied to Gur Amrit Bhalla comment 2 years ago
Sack Babus + black list contractor. Recover cost from Babus & contractor as the projects have been left half way. Recover cost from contractor
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