Bill to regulate NHDP funds

By V. Jayanth

The decks have finally been cleared for the major National Highways Development Project (NHDP) and the ambitious programme has now been fitted into a time and funding framework.

When the Prime Minister, Mr. A. B. Vajpayee, announced the NHDP a year ago, there was widespread scepticism about its feasibility. Where can the Centre find the funds from, was the main question.

Though a special cess was introduced on petrol and HSD two years ago, even officials were not confident that these funds would ultimately find their way to the NHDP.

Now the Union Cabinet has decided to set up a dedicated fund for the National Highways projects, to be administered by the Surface Transport Ministry. A Bill will be introduced in Parliament to make this a reality and ensure that the cess collected is not diverted to the contingency fund or absorbed into the general revenues of the Centre. This is one way of making sure that the entire amount raised from the levy is channelled into road development.

Official sources say that Rs. 20,000 crores could be generated through the cess and an equal amount could be raised as loan from multilateral financing institutions to complete the project on time.

In addition, the National Highways Authority of India (NHAI) has been authorised to go to market with infrastructure bonds to raise additional resources. About Rs. 8,000 crores will come from such borrowings. These bonds will be eligible for exemption from capital gains duty. The private sector will also be involved on selected routes, to be taken up on a BOT basis and about Rs. 6,000 crores could come from them. With these measures in place, raising Rs. 54,000 crores for the whole project should be possible, the sources say.

The golden quadrilateral connecting the four metropolitan cities will take the priority through a four or six laning of the National Highways which link them.

Another component will be connectivity to the major ports as also upgrading the maintenance of the entire 52,010 km network of National Highways.

Upgradation of the golden quadrilateral and the connectivity to the ports will itself cost Rs. 27,000 crores and the target for completion is 2003.

The next phase will be the North-South and East-West corridors - linking Srinagar and Kanyakumari, Silchar and Saurashtra - expected to be completed by 2009.

Transport and industry circles are obviously enthused at the concrete direction given to the NHDP. They are confident it will generate considerable employment in rural areas where the highways are to be upgraded and linked.

Once the network is upgraded, it should provide a boost to the automotive and transport industries. A host of service units are also expected to take shape in the expanded corridors.

``It needs constant monitoring, fine-tuning and completion on schedule to generate the kind of confidence in such infrastructure projects'', industry sources say.

The same enthusiasm is not discernible in the Cabinet's decision to amend the Motor Vehicles Act to permit the use of LPG as fuel for cars.

``We are convinced that it needs greater planning and regulation before the LPG as fuel concept is thrown open. Already, hundreds of cars in many cities and towns have converted to LPG. Small Maruti cars can be seen carrying LPG cylinders in the boot. This is dangerous, to say the least'', car dealers say.

They feel the market has been flooded with converter kits which may not all conform to stringent standards. ``Before the Government blesses such a move, it must standardise the production and distribution of converter kits to ensure safety. It is literally playing with fire'', they say.

The other aspect relates to the use of LPG cylinders distributed as cooking gas. ``On the one hand, the Centre cries hoarse about subsidy on LPG cylinders and on the other, it has opened the floodgates for its use in vehicles. What is the guarantee that domestic LPG, now sold at around Rs. 200 per cylinder, will not be used in vehicles? It will be difficult to ensure that vehicles buy only private, commercial LPG cylinders, which cost more'', dealers say.

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