The Indian roads and highways sector is the second largest road network globally. It bears the maximum passenger and freight traffic of any mode of transport in India. Investments in roads have been rising, with greater private sector involvement. National highways make up only 2% of the total road network but carry 40% of road traffic. The government has launched various initiatives like the National Highways Development Project to expand and upgrade the national highway network through public and private partnerships. Growing vehicle sales and economic activity are driving increased demand for transportation and boosting growth in the roads sector.
2. Sector At A Glance
2nd largest road network 4.8 million km
Bears maximum passenger (85%) and freight
traffic (60%)
Rising investments
Growing Private Sector Involvement
Rapid growth in NH [100,000 km by 2017]
Overseas Investments
Roads*
Total length : 4.87 Mn km
State Highways National Highways
District and Rural
Roads
1,46,100 Km
3.0% of total roads
97,135 Km
2.0% of total roads
46,26,500 Km
95.0% of total
roads
Source : Ministry of Road Transport and Highways (MoRTH), *As on July 2015
63
3
7
27
Proportion of freight traffic across modes of
transport [2013-14] [In %]
Road
Coastal
Pipeline
Rail
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010-2015 2016-2020
25% 32%
61%
59%
14% 9%
Investments in Roads [In bn]
NH State Rural
4358 8651
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010-2015 2016-2020
35%
56%
65%
44%
Financing of National Highways
Public Private
3. National Highways
NH 2% of road network, 40% of traffic
NHAI Nodal Agency launched NHDP in
2000
21440 23769
28977
33689
76818 79116
92851
96214
0
20000
40000
60000
80000
100000
120000
Trend in NH Network [km]
1950 1965 1980 1995 2012 2013 2014 2015
NHDP Building, Upgradation, rehabilitation &
broadening of existing NH 7 phases
NHDP
Phases
6-laning of
existing NH
NHDP Projects Private Players [EPC Contract /
BOT]
Execution picks up in 2015-16; Nearly 50%
completed
7994 7142 12109 13203
6500
1000
700
48648
7714 6394 6594
1439 2216
- 22
24379
0
10000
20000
30000
40000
50000
60000
Phase I Phase II Phase III Phase IV Phase V Phase VI Phase
VII
Total
Total Length Completed
NHDP Cash contracts Central road fund,
grants, toll revenue
201 234 254 223 185
251
353
516
669
792
NH - Year-wise estimated investment [Rs
Billion]
56%
19%
7%
2%
2% 14%
NHAI Sources of Funds
Cess Toll Premium
External Assistance Budgetary Support Borrowings
4. State Roads
20% of road network,
40% traffic
SH, MDR, ODR & Rural
Roads
PWD [Cash] & RDC [BOT]
Awards contracts
Central Road Fund By
Central Govt
10%
9%
9%
8%
8%
56%
State-wise budgeted expenditure for the year 2013-14 under CRF
Maharashtra
Rajasthan
Andhra Pradesh
Uttar Pradesh
Madhya Pradesh
Other States
10% [CRF] Devpt of
roads under ISC EI
8%
13%
10%
7%
62%
Total allocations under ISC from 2001-02 to 2011-12
MP Maharashtra Rajasthan Sikkim Other States
7%
7%
7%
7%
10%
7%
55%
Total allocations under EI from 2001-02 to 2011-12
AP Jharkhand Karnataka Nagaland Odisha TN OthersInvestments
380 440
565 623 691
778
879
992
1125
1287
State Roads : Overall Investments [Rs billion]
6. Top Players Track
21.7 24
9.7
47.1
16.6
4.7
15.1
6
15.8
73
2.4 -2.2 -3.7
12.3
5.7
-5.9
8.6
-18.3
7.5
45
5.7 5.7 6.5
10.5 12.5
2.8
9.5
-1.5
15 15.2
-40
-20
0
20
40
60
80
Ashoka
Buildcon
GMR Hindustan
Construction
Company Ltd
IRB
Infrastrcutre
Developers
Ltd
Larsen &
Toubro
Punj Lloyd
Ltd
Reliance
Infrastructure
Limited
IVRCL
Infrastructre
Projects Ltd
KNR
Constructions
Ltd
Noida Toll
Bridge
Company
Limited
OPM NPM RoCE
Top Companies with exposure to roads sector : Margins & RoCE [In %]
7. Trends in the road sector
Increasing private sector participation
Partnerships Indian & Foreign firms
Indias focus on infrastructure
Infrastructure initiatives
13. Presented By
Dhara B Shah
Divya Liz George
George Jacob Ken Sunny
Shankar Ramesh
Editor's Notes
#4: National highways (NHs) constitute around 2% of the road network but carry about 40% of the total road traffic. The
National Highways Authority of India (NHAI), the nodal agency under the Ministry of Road Transport & Highways
(MoRTH), is responsible for building, maintaining and upgrading NHs. In order to develop the NH network in the
country, NHAI launched the National Highways Development Programme (NHDP) in December 2000.
NHDP projects are awarded to private players either on an EPC (cash) contract or on a buildoperatetransfer
(BOT)
basis. NHDP cash contracts are mainly financed through budgetary allocations from the Central Road Fund, negative
grants/ premium received, and toll revenues. Loans and grants are also received from the World Bank and the Asian
Development Bank.
#5: State roads come under the jurisdiction of the respective state governments. However, the Central government may
provide financial assistance to state governments through various schemes for development of the road network.
The responsibility of awarding of contracts for road development is entrusted with two state government divisions,
namely the Public Works Department (PWD) and Road Development Corporation (RDC). Generally, cash contracts
are awarded by the state PWD, while BOT Annuity
and BOT Toll
contracts are typically awarded by the respective
state RDC.
The CRF is funded from the cess collected on the sale of petrol and high speed diesel (HSD). On every litre of petrol
and high speed diesel that is sold, a cess of Rs 2 is collected. The fund provides assistance to states for
development and maintenance of state roads, rural roads, national highways, under and over bridges and safety
works at unmanned railway crossings. 11 per cent of the cess collected on HSD and 30 per cent of that on petrol is
allocated towards maintenance of state roads.
#6: Rural roads connect rural habitations to each other as well as with state and national highways.
Of the total 4.6 million km road network in India, rural roads account for around 3.7 million km
(80%).
PMGSY was launched in December 2000 with the primary objective of providing good allweather
connectivity to plain areas with population above 500 and hilly areas with population
above 250 persons. The programme also involves upgradation of the existing rural roads to allweather
roads. The PMGSY aims to provide new connectivity to 164,849 habitations. Up to
March 2015, 426,629 km of road had been constructed. Further 51,253 habitations have been
connected under the scheme up to March 2014. The programme also aims to upgrade about
374,844 km of existing roads. It is implemented only through cash contracts. To expedite its
implementation, in 2005, a part of this programme was brought under Bharat Nirman a
business plan to build rural infrastructure.
PMGSY, which is a 100% centrally sponsored scheme, is funded by budgetary allocations,
Central Road Fund (CRF) on high speed diesel (HSD), market committee fees, loan assistance
from the National Bank for Agriculture and Rural Development (NABARD), World Bank and the
Asian Development Bank.
Repayment of the principal amount of the loan taken from NABARD has commenced from
201011.
Due to this outflow, investment in PMGSY declined, thereby impacting the progress of
the programme. All upgradation projects were suspended in this period.
#10: Growing domestic trade flows have led to a rise in commercial vehicles and freight movement
Increasing financing on vehicleloans
Roads trafficshare of the total traffic* in India has grown from 13.8 percent to 60 percent in freight traffic, and from 32 percent to 85 percent in passenger traffic over 19512014