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National Highways Authority of Indias
Golden Quadrilateral Project
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Why Golden Quadrilateral?
INDIAN ROAD NETWORK
Length (in Km)
National Highways 65,569
State Highways 131,899
Major district roads 467,763
Village and other roads 2,650,000
Total 3.315 million
National highways are less than 2 percent of network but carry 40
percent of total traffic
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About NHAI
The National Highways Authority of India was constituted by an
act of Parliament, the National Highways Authority of India Act,1988.
NHAI is responsible for the development, maintenance and
management of National Highways entrusted to it and formatters connected or incidental thereto.
The Authority was operationalised in Feb, 1995
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Overview of NHDP Project
The National Highways Development Project is a project toupgrade, rehabilitate and widen major highways in India to a higherstandard.
The project was implemented in 1998.
"National Highways" account for only about 2% of the total lengthof roads, but carry about 40% of the total traffic across the lengthand breadth of the country.
NHDP is managed by the National Highways Authority of Indiaunder the Ministry of Road, Transport and Highways
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NHDP Project
Phase I:
Golden Quadrilateral
Phase II:
North-South and East-West Corridors
Phase III:
Build, Operate andTransfer (BOT)
Phase IV, V:Widening of highways
Phase VI, VII:
Expressways and Ringroads
Phase IV, V:
Widening of highways
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About Golden Quadrilateral
The Golden Quadrilateral (GQ) is the largest express highway project
in India launched by former prime minister Atal Bihari Vajpayee,however the credit should go to the prime minister Dr. Manmohan
Singh, as he was the one who completed most part ( about 75%) ofthe project.
GQ is the first phase of the National Highways Development Project
(NHDP), and consists of building 5,846 kilometers of four/six lane
express highways connecting Delhi, Mumbai, Kolkata and Chennai(thus forming a quadrilateral of sorts), at a cost of Rs. 60,000 crores
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Agencies/Instituitions involved in
implementation of the project
Around 115 stretches
GQ resulted in creation of NH 2, NH 4, NH 5, NH 6, NH 7,NH 8, NH 46, NH 60, NH 76 and NH 79
GQ was funded mainly by MORTH, NHAI, SPV, ADB and BOT
More than 75 contractors were involved
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Market Demand Analysis
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Need of Golden Quadrilateral
Indias economy had long suffered from the National highway
systems chronic capacity shortage
Prior to implementation of NHDP project, 40% were single lane,
57% were two lanes and remaining 3% accounted for four-lanehighways
The total investment required to implement these programs was
estimated at $37 billion
National highways are less than 2 percent of network but carry
40 percent of total traffic
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Government policy
Declaration of the road sector as an industry
Provision of capital grants subsidy up to 40% of project cost on case-to-case basis
Duty-free import of certain identified high quality construction plantsand equipment
100% tax exemption for 5 years and 30% relief for next 5 years, whichmay be availed of in 20 years
Provision of encumbrance-free site for work, i.e. the Government shallmeet all expenses relating to land and other pre-construction activities
Foreign direct investment upto 100% in road sector
Easier external commercial borrowing norms
Higher concession period, up to 30 years
Right to collect and retain toll
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Project details
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Technical Analysis
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F
EW
S
TRET
CHES
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Features
Type: Civil Engineering Cost
Cost: Rs. 5 to 10 Crore per kilometer
A well designed rural road with 3.75 carriageway, shoulder andcross-drainage works may cost between Rs. 6 to 25 lakhs,
depending on the construction conditions A proposed project is expected to have various alternatives in
terms of its way of implementation
A Study of highway economics and finance involvesunderstanding of
Various cost components of highway projects
Economic feasibility of alternative highway projects
Decision on scheme of investment on a project at its various stages
Funding source and policies for road projects
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Cost components
Agency Cost
Construction Cost
Maintenance Cost
User cost
Vehicle Operating Cost
Cost due to traffic congestion and restraint
Cost due to accident
Cost of travel time
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Operations
Completely owned, financed and operated by private body
Build, Operate and Transfer approach
Finance, build and lease approach etc
GQ considered BOT as the most effective form of privatization.
Several variations of BOT approach exist, like, build, own andoperate (BOO), build, own, operate and sell (BOOS), build,
operate, lease and transfer (BOLT) etc
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Financial Analysis
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Parameters used in estimating Financialrequirements
Time Horizon
Interest rate
Inflation Salvage value
Present worth
Capital recovery factor
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NHAIs Finance Mechanisms
Annuity based model
Cess on Diesel & Petrol @Rs 2 Per liter
Capital grant up to 40% of project cost
Issuance of bond by NHAI guaranteed by government
Other funding agencies includeWorld Bank amounting $400mn andAsian Development Bank amounting $200mn every year
Issuing of Infrastructure bonds
Set up its independent companies Moradabad Toll Bridge Companyand Vadodara Halol Toll road
Company for getting sops and getting funds from the markets. ThroughBuild, Operate and Transfer schemes which include SPVs (SpecialPurpose Vehicle), Annuity and Shadow Tolling
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Financing Plan for Golden Quadrilateral
Source Rs. Cr
Total Cost 54,000
Revenue
Cess on Petrol and Diesel 20,000
External assistance 20,000
Market borrowings 10,000
Private sector participation 4,000
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Funds would be managed by the followingagencies
Ministry of rural development for component meant for rural
roads
Ministry of Surface Transport (MoST) for remaining funds meant
for National highways, state roads, roads for interstate andeconomic importance and rail safety works
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Thank you
By
LumpiGokul
Maheedhar