The Golden Quadrilateral (GQ) project, India’s prestigious highway network connecting the four largest metropolises of Delhi, Mumbai, Chennai and Kolkata, has indeed attracted world attention for its huge cost and size. It is in fact the first-of-its-kind highway development project attempted at the global level. Since its foundation laid by the then Prime Minister, Mr. A.B. Vajpayee, on January 6, 1999, work on the network is proceeding apace though with some periodic hiccups.
The Government had initially estimated that GQ would cost Rs. 60,000 crores at 1999 prices. However, as of August 2011, the cost incurred by the Government was about half of the initial estimate at Rs. 30,358 crores. At this rate, the project cost is subjected to further upward revisions as time progresses.
The other minor and major road development projects undertaken by the Government in order to meet the ever-growing road infrastructural needs of a fast developing automotive industry are progressing side by side. However, after a temporary slowdown last year, the road construction sector in India has picked up in 2012. With the National Highways Authority of India (NHAI) awarding new projects under the public-private partnership (PPP) programs and the projects execution picking up from last year, the Indian construction industry is looking at making up for lost time with a flow of funds and EPC (engineering, procurement and construction) contracts in 2012.
The effect of the sudden surge in demand for construction machinery, building material machines, mining machines and construction vehicles is clearly evident in the expanding industrial activities all over the country.
NHAI awarded 4,375 km of roads in the first nine months of 2012 as against 4,553 km in 2011, 3,338 km in 2010 and 643 km in 2009. The third quarter of 2012 itself saw about 1,898 km of projects being awarded.
Notably, the new road projects are part of the Rs. 3 lakh crore ($70 billion) National Highways Development Program (NHDP) aimed at developing 50,000 km of national highways in seven phases by 2015. Phase I and II comprise 14,145 km of connecting and upgrading of highways between the four metropolitan cities – Mumbai, New Delhi, Chennai and Kolkata – also called the Golden Quadrilateral (GQ), connecting Srinagar with Kanyakumari, Silchar with Porbandar, 12 major ports and several other important national highways.
Phase-III involves upgradation of 12,109 km of national highways between State capitals, important tourist places, and economically important areas. Phase IV comprises two-laning of 20,000 km of single/intermediate/two lane National Highways. Phase V comprises upgradation of 6,500 km of the existing four-lane highways and other selected stretches, while Phase VI develops 1,000 km of fully access-controlled expressways. Phase VII will construct stand-alone ring roads, bypasses, grade separators, fly-overs, elevated roads, tunnels, road overbridges, underpasses, and service roads across the country.
As the market gears up to the sudden surge of new road projects, EPC contractors and construction equipment companies are struggling to maintain their order-book growth. Many are preferring to enter the PPP format by undertaking projects on build-operate-transfer (BOT) basis, and several are forming special-purpose vehicles (SPVs) to execute the projects.
Hectic project management, equipment hiring and sub-contraction are making it necessary for construction companies to look for technologically advanced and efficient solutions for project execution.