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Last Updated : Aug 27, 2015 09:23 PM IST | Source: CNBC-TV18

To award road projects worth Rs 3L cr by Mar 2016: Gadkari

The government is moving quickly when it comes to upgrading the country's infrastructure and a lot of initiatives have been taken with respect to getting road and port projects to take off, Union Transport Minister Nitin Gadkari has said.

The government is moving quickly when it comes to upgrading the country's infrastructure and a lot of initiatives have been taken with respect to getting road and port projects to take off, Union Transport Minister Nitin Gadkari has said.

In an interview with CNBC-TV18's Shereen Bhan, Gadkari said the government hopes to award highway projects worth Rs 3 lakh crore by March 2016, pointing out that his ministry has awarded nine build-operate-transfer projects and may award another 20 under a hybrid model.

"We hope move forward in 15-16 of the 26 stalled road projects," he said.

Among other initiatives, Gadkari said the government would launch a Rs 4,000-crore mass rapid transport system pilot in Delhi, was talking to unions to work out a port corporatisation scheme and will come out with a Road Safety Bill soon.

Gadkari also spoke about the recently-concluded Monsoon session of Parliament, in which both the Land and GST bills could not be passed.

The minister said the government would soon decide on its next course of action.

It is said the government is considering a special session of Parliament in order to try to pass the GST bill while the refloating of the Land Ordinance bill -- following some changes -- is being considered.

Excerpts from the interview on CNBC-TV18.

Q: I know there is a lot of activity in the various ministries that you are looking after. I will get to that in just a bit, but if I could very quickly ask you because this is a question that the markets are grappling with at this point in time. Is there hope of a special session being reconvened perhaps in the early half of September to try and push the goods and services tax (GST) bills through?

A: GST bill is very important for the development of this country and presently, in the world, many strong economic countries are also facing the problems. And this is the time for all parties, I also appealed to Congress party and other parties that in the national interest as early as possible, we should approve the bill of GST. But the most important thing is of the Congress party is ready to support it, then there is question, then we can think about it.

Q: The parliamentary affairs ministers, Mr Venkaiah Naidu has told us that your government has reached out to all political parties, you are open to discussion. I spoke with Mr Veerappa Moily, Congress leader yesterday and he said that no one has reached out to the Congress party, no effort is being made for conciliation and they stick to that demand as far as the GST is concerned. Is there any hope of a breakthrough at all? Because, if there is no breakthrough on GST, then there is no point of reconvening the parliament session.

A: Actually my information is Mr Venkaiah already discussed this issue with many stakeholders of different political parties and our government is trying to convince them. And we need their cooperation. And the present economic situation in the country, this is a time for all parties, that they should take the decision in the interest of the economy of our country. I again, appeal all political party, just leave with the politics and for the national interest, they should come and they should help the government for our economy in the very crucial time to support them. And that is the need of the hour.

Q: If the Congress does come on board as far as the GST is concerned, what could be the possible timeline of the special session?

A: It is the Parliamentary Minister, Mr Venkaiah Naidu who is taking initiative and discussing the issue. And after, when he gets the response from the parties, our government and the Prime Minister... (Interrupted)

Q: So, the first half of September, would that be?

A: I do not know. It is up to decide by the Parliamentary Minister and the Prime Minister,

Q: Let me move to another issue which you have been personally involved with. You have in fact been driving that issue and that is the issue as far as the changes in the land law are concerned and the land ordinance. The parliamentary panel is now going to submit its report only in winter. So, we do not know what the fate of the legislation itself is going to be whether that will be part of the special session if at all the special session is called. We are now hearing the talk of an executive order being passed because the ordinance cannot be re-promulgated unless you prorogue the session. Can an executive order take forward what the ordinance has left?

A: That is issue related with the Roadway Minister, he will take the decision.

Q: But, you have been involved with this from day one.

A: I will tell you two things very clearly. In Mann Ki Baat, even in parliament and even in National Institution for Transforming India (NITI) Aayog, Prime Minister every time clear that we are open, we are ready for discussion. We will invite suggestion from your side. But, fortunately, the responsible political party, the United Progressive Alliance (UPA), some particular Congress party, they made a boycott on the meeting of NITI Aayog.

Now, the problem is that the land acquisition is a subject in concurrent list and majority of ministers when there was a subject of land acquisition in the NITI Aayog meeting, they appealed to the Prime Minister that we can take the decision, we are authorized to take the decision. We want development. And we are ready to take the decision, whatever the important law we want to change in the land acquisition act, we are ready for it. We will make the appropriate rules for that. So, why are you taking the risk and some people are making politics here? Better way, you give us the right, we will do it.

Q: That part I understand that now, the government is looking at empowering state governments to take their call as far as land acquisition is concerned, but in the interim because Mr Naidu has also gone on record to say that we have to ensure continuity. If you cannot re-promulgate the ordinance because the session has not been prorogued, how do you ensure continuity? Or are you willing to let the ordinance lapse and let the state governments as when decide what they want to do with the acquisition act?

A: Our government will take appropriate decision at an appropriate time.

Q: That is all you are going to say?

A: Yes.

Q: So, the ordinance will lapse and will you ensure continuity or not? That is my only question that I will ask you on this?

A: Your question is very important, but my answer is that appropriate time, appropriate decision.

Q: You do not have much time. The ordinance lapses on August 31.

A: So, wait and watch.

Q: Let me now ask you about the decision that was taken by the cabinet committee on economic affairs just last night and this has to do with build operate transfer (BOT) projects. A similar decision is taken in March if my memory serves me correctly. What is the difference now if it is only the fact that the investors can now use the, can exit and actually use that to fund power projects to deleverage their own balance sheets because earlier it was supposed used only for road projects bid out by the NHAI.

A: Actually, the decision was that any project if you sell the equity, he can only invest in the other infrastructure project of National Highway. But, the contractor and builder association of India, they gave me their representation. Actually there was problem of that there was some more people doing power projects, some were infrastructure project in the state, some other infrastructure projects. And some where there was a big problem, crisis in the banks. Bank was not giving them money account was non-performing asset (NPA).

So, they appeal us that allow us to whatever we get the money, we can give it to the bank. Our account will be regularised and bank will give us the money. So, these are the practical problems. So, because of that, we again take that note to the cabinet and now, cabinet approved that. So, now there is no problem that anyone who is going to sell his equity, he can invest his money either on infrastructure project, either state government under power project or anywhere, or either he can return his money back to the bankers.

Q: So, how many projects are likely to benefit on account of this? Because, you said that industry has made representations to you, what kind of pain is likely to be moved out of the system on account of this decision that you have taken.

A: To be very frank, these are all problems created by the previous government. And my intention is whatever it may be now, we want to solve it.

From the next when our government starts work, we have already changed all types of rules and regulations without 0 percent of land acquisition we are not giving any appointment order to anybody. We are going to clear first forest environment clearance then, we are giving appointment order. So now, this is not the problem now for the future.

But the past there are a lot of problems. There was a number of projects, something, I do not know, it might be 280 something.

Q: 240 projects under the public-private partnership (PPP) model, 186 were stuck. Out of the remaining 44, you said have been terminated, 80 have been restarted and only about 20-25 projects continue to be stuck. that was our last conversation.

A: Approximately 22-26 projects, they are big projects we are facing the problems. Now, I have decided taking the renew of every state regarding all type of projects and I will get the correct information. But my positive approach is how to start the project, how to solve the project. And now that is the only this benefit will go to 8-10 projects.

Again, today I discussed with my secretary, why are you making solutions in piece-by-piece. Now, you take a solution, we will go to the cabinet, this is a problem, what we can do? Now, we want to solve, we have to make full-stops to that, because at any cost either any side, by this side or this side, we want to solve the problem. So, probably I feel that out of 26, 15-18 projects we will solve. Again for 6-8 projects we have to find out some way out from that.

Q: Let me put to you a question the Finance Minister raised  very recently. He said that he hoped that the railway ministry will now start to spend very quickly the money that has been allocated to the railway ministry for this particular year. Is that a problem with your ministry as well or are you on track to be able to deliver what you have promised  so far?

A: We are on track, we are making expenditure but my expectation is too high from my department. I am also very keen to accelerate the speed of my department. I want to change the system. The administrative system of the department is not good. This bureaucratic system delays the project.

We are very much committed  for transparency. We are very much committed for reducing the cost of construction. At the same time we want to make it good quality. 


Q: Are you on track to award Rs 1 lakh crore worth of highway projects this particular year because that was the target that you had set out for yourself?

A: It is more than that. Yesterday I was discussing with my officers, it is more than that.

Q: More than Rs 1 lakh crore?

A: Yes. Before March 2016 I want to complete the target of Rs 3 lakh crore.

Q: You had set out a target of Rs 5 lakh crore over the next four years?

A: Yes.

Q: You are saying by March next year you want to complete Rs 3 lakh crore?

A: This is my internal target and I am working on it. Whatever target I decide I have a track record of always completing it. 

Q: Since you are talking about targets, you went from 7 kilometers to 14 kilometers, what is the target now because eventually you want 25-30 kilometers but by end of this calendar year?

A: Leave my personal target. My declared target is 30 kilometers per day in two years.

Q: Have you moved up beyond 12 and 14 kilometers?

A: 100 percent.

Q: How much are we currently doing?

A: That is not with me right now, at March end I will tell you exactly but it will be more than 30 kilometers per day.

Q: By March end you would have done more than 30 kilometres a day?

A: Yes.

Q: Let me ask you about something else that we talked about and this was as far as the port related issues were concerned and you were planning to take the port corporatisation policy in that sense to cabinet as well. One of the other issue that your government is grappling with is the problem of NPAs on account of power sector as well as the steel sector and there in terms of input cost the logistics distribution cost is very high. In fact for the steel sector as high as about 40-45 percent, for the power sector it is as high as about 30-35 percent. What is your ministry going to do in order to try and bring down the logistics cost?

A: Now we are going to start inland waterways. We are going to start Roll-on/roll-off (RORO) services for transport and we also sanctioned one scheme where any jetty for passenger any state have a proposal 50 percent we will give as a grant in aid for that, maximum of Rs 15 crore and from container for the goods transport if they want to make it jetty water port there we can give them 50 percent up to Rs 25 crore.

So, this scheme is very good and because of the new scheme the RORO services, the transport service for the goods, the transport services for passenger will increase and it will reduce the cost.

Already I gave you the information when you go by the road if the cost is Rs 1.50 for example that is for railways is Rs 1 and by water it is Rs 0.25-0.30.

All over the European countries the industry is just near the river. So, now river side industrial development is very useful as far as logistics is concerned. So, I am trying my level best how we can reduce this logistics cost particularly the transport cost.

Q: What is the timeline? Because I understand this is going to be part of your Sagar Mala initiative that you are going to be announcing. What is going to be the timeline? This is a clear pain point that the industry is faced with today?

A: By taking more traffic on water we can reduce the cost. I am giving you the example. In Mahanadi, the coal area, their coal production is 60 million tonne and now in due course of time they will go up to 300 million tonne and I am planning that out of 300 million tonne 200 million tonne on water. So, we are working very hard and within two years I am confident that we will get good success.

Q: What about the port corporatisation policy and what about private investment in the sector, divesting within the port space, what is the plan of action there?

A: Already, we have decided some expansion of Cochin Shipyard. We are taking loans and particularly the pension fund that labour ministry is ready to give us. At the same time, we are changing some laws. Regarding the corporatisation, Finance Minister has already declared in the Budget and we are studying the proposals.

Q: It has been a while since the budget and it has been a while since our conversation where you promised that you would be taking the matter to cabinet shortly. So, when do we anticipate forward movement on this front?

A: You are absolutely correct. The trade unions are creating some reservation about it. We have to convince them.

We are not against labour, but some of the political parties they want to create an atmosphere in the country that we are anti-poor, anti-labour, anti-minority, anti-scheduled caste, anti-farmer and that was one of the reason that we have to convince the people that this is in the interest of you and now the problem is that our economy's emphasis is how we can increase the employment potential.

How we can increase the industrial growth rate by which we can make our country strong but we have to convince all these things to the stakeholders and that is one of the problem I am talking with the unions and with the cooperation of the unions I feel that we will succeed in this mission.

Q: Let me ask you as far as more action within the road space is concerned and you have tried to derisk the private sector and derisk the private sector balance sheet. What more can we expect in terms of hybrid models that you are likely to announce where the sovereign will take on much more of the risk?

A: In this year after March, already new 9 BOT projects we have given work order to them in the first time. Last year it was only three. So, it is a good thing as far as the sector is concerned. Now the people have faith on the government.

We are moving fast, transparently and time bound. One of the reason is that we have just selected 20 projects in hybrid models and within four months we are going to start this 20 hybrid model project which can also be very useful for the industry and it will create more faith of the industry of the government, it will create a good economic atmosphere.

So, we are moving fast now and after this 20 projects at least 100 projects are under pipeline.

Q: Under the hybrid model, are you looking at other models as well where the cost of capital can be reduced?

A: Somewhere the projects which are economically viable on the traffic density IRR is good, we will go for public–private partnership (PPP) but somewhere ether is no economic viability is there we can go for hybrid model.

Q: You have got the motor vehicle act and you have got the road safety bill as well which you intend to take in the winter session, there has been a lot of representation on going back to strengthening the road safety bill. The feeling is that it has been diluted significantly. What is the sense on that, are we likely to see any changes?

A: No, actually there are a lot of suggestions from different department of central government and one thing there, the dilution of bill. So, now I am going to present it to the PMO.

What my original plan was what the suggestions were given by the department and ultimately the Prime Minister will take the decision and we will submit the bill to the parliament.

Q: So, the Prime Minister's call will be final as far as the Road Safety Bill is concerned?

A: Yes. Today I have a meeting with the PMO.

Q: On the Road Safety Bill?

A: Yes. We will give all presentation to them. Then they will take that with Prime Minister and the Prime Minister will take the final call.

Q: What are going to be your priorities for the rest of this calendar year? You have managed to move forward at least as far as stuck road projects are concerned. Across your various ministries what would be the top 5 priorities now for the end of this calendar year and this financial year?

A: We are going to start from NHAI's side express highway network. The first access control express highway is easterly bypass with cost of Rs 7000 crore. I am going to start it within 15 days - the work will start.

Second project which we can start within a month is Delhi-Meerut. We are making 14 lane road there.

Thirdly is Mumbai-Nagpur and Delhi-Katra through Ludhiana, Amritsar and Katra. Nagpur to Mumbai and Delhi to Katra it will take some time but first we are going to start the express highway.

Another thing is we are thinking about making NHAI international. NHAI will work in different parts of the world as a contractor having a huge experience.

Fifth is that we are making 1200 roadside amenities. Fourth is we have already taken a decision to make 1 percent cost for plantation, transplantation, beautification and at the same time for the maintainence of trees.

So, we want to make our road green. In next 5 years my plan is giving Rs 5000 crore from by Budget for this green area and that is one my dreams.

Lastly we are going to start a new mass rapid taskforce system. It is from Dhaula Kuan to Manesar. It is a Metrino.

Pods are there and just like ropeway they can move up to 70 kilometres. Within two months we are going to start the first pilot project with a cost of Rs 4000 crore and we want to complete it within one year and ten months.

Q: Rs 4000 crore mass rapid transport system that connects Manesar to Dhaula Kuan and you are saying this will be ready in a year?

A: Within two years.

Q: Let me ask you about NHAI going international. What is the plan, how soon do we see this?

A: We have some offer from some of the countries particularly from Nepal, Bhutan, Iran. So, we will think about it. Within 8 days in Mumbai I am going to open an office of new rail port connectivity corporation. This corporation is going to start a rail network of Rs 4000 crore of 24 projects within two months.

Q: For this mass rapid transport system that you spoke about, is there a private party that has already been given the project, awarded this bid, what details can you share?

A: It is a pilot project. DPR is prepared. Rs 4000 crore investment is from their side, we are not going to invest anything. We are giving them right of way and in place of right of way they are giving us equity and the first pilot project is going to start. I am trying it as make in India, made in India.

In the pods, there is an electronic sensor. The cost of electronic sensor, Israeli company quoted was for Rs 1 crore 10 lakh. But in India one of our Indian company quoted only for Rs 10 lakh.

They are also manufacturing here in Bhopal. Now the problem is that this all will be indigenous and the capital cost of the metro is Rs 350 crore per kilometre and the capital cost for this project is Rs 50 crore and I am confident that it can reduce upto Rs 30 crore. The capacity is same.

So, this can be a revolutionary change in the country. This is going to change the total scenario of the transport system. However, it is a pilot project. If we succeed in the first pilot project, then we will make it everywhere in the country.

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First Published on Aug 27, 2015 11:27 am
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