Also, in a first, NHAI will skip the practice of selecting the lowest bidder to prepare detailed project reports (DPR) for highways, as it tries to attract better quality consultants. Besides, the National Highways and Infrastructure Development Corp. Ltd (NHIDCL) will get a permanent cadre of personnel for building strategic road projects along India’s borders.
The aim of all new policies was to build infrastructure of international standards and bring down India’s logistics costs that remain above the double-digit mark, Gadkari said. “I am confident that with the work we have done to improve mobility in the country, the country’s logistics costs would fall to single-digit mark, around 9% by December this year,” he said.
Mega-InvIT plan
Gadkari said NHAI’s public InvIT issue this year will keep 30-40% for retail investors, amounting to ₹25,000 crore. NHAI’s InvITs own completed, toll-generating road projects, and investors purchasing their units get regular income from toll collections.
NHAI’s first InVIT – the National Highways Infrastructure Trust (NHIT) – provided retail investors just one option of non-convertible debentures (NCDs). The NCD issue launched in October 2022 to raise ₹1,500 crore had 25% reservation for retail investors, and it came with a coupon of 7.9% payable half yearly, which worked out to 8.05% assured interest per annum to the investors.
Gadkari said a decision on how to raise retail investors’ participation in NHAI’s InVIT would be taken in the next two to three months.
Trust route
NHAI launched NHIT, its first InvIT in October, 2021. So far, it has raised ₹43,638 crore in four rounds to acquire 2,345 km of highways assigned to it by NHAI. The four rounds were undertaken in four years starting from FY22 till FY25.
Separately, the road ministry approved a new policy on DPRs on Wednesday, Gadkari said, keeping his goal of ensuing quality road infrastructure in mind.
A DPR is a comprehensive blueprint for a road construction project, outlining all technical, financial, and logistical details necessary for its execution. Currently, the consultant offering the lowest price, or so-called L1 bidder, is awarded the task of preparing DPRs.
Under the latest plan, DPR consultants will be selected based on their technical qualifications and experience. The development assumes significance since it is a departure from the established practice of L1 tendering, with the lower quality DPRs often blamed for poor quality of highways and rising road accidents.
Qualitative transformation
“The aim is to undertake qualitative transformation of the sector at par international standards. So, the new policy would finalize the lowest rate, but award DPRs only to agencies with experience in the sector, having requisite trained people, and having manpower capable to handle large infrastructure projects,” Gadkari said.
Meanwhile, the National Highways & Infrastructure Development Corp. Ltd (NHIDCL) which builds strategic roads will create its own cadre, said Gadkari, a move that could support infrastructure creation along the borders. This will begin with 1,000 personnel belonging to the states where the roads are built. Currently, NHIDCL personnel comprise officials on from NHAI and other government departments.
This comes against the backdrop of India’s four-day conflict with Pakistan, and the Centre’s renewed focus to develop the border road infrastructure. India is developing 1,560 km of border roads in Arunachal Pradesh, a high-speed corridor of about 200 km in Meghalaya, and tunnel-based road development projects in Jammu and Kashmir.
Strategic roads
On creating a new permanent cadre for strategic roads, the minister said the process is getting finalized with the Union Public Service Commission (UPSC). Recruitments for the cadre would be made from among people native to border states such as Uttarakhand, Himachal Pradesh, Arunachal Pradesh, Meghalaya and the Union Territory of Jammu and Kashmir.
“Infrastructure is very important for the progress of any country. And our government, ever since 2014, has given the highest priority to infrastructure development in the country. Good infrastructure is precursor to the economy getting capital investments and industrial development. Investments will create jobs, boost exports and raise growth of the economy. It will also help the GDP to cross $5 trillion mark and become the third economy largest globally,” Gadkari said.