Insight: Road to nowhere: the longest expressway India never had

BALLIA, India Mon Jun 25, 2012 5:04pm EDT

1 of 8. Vehicles move alongside the under-constructed Kundli-Manesar-Palwal (KMP) Expressway at Manesar, about 60 km (38 miles) south of New Delhi June 15, 2012.

Credit: Reuters/Adnan Abidi

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BALLIA, India (Reuters) - In a wheat field near the mighty Ganges river stands a cracked foundation stone surrounded by nibbling goats and farmers driving their cattle in the baking sun.

Unveiled more than four years ago, it's all that remains of an ambition to build India's longest expressway, an eight-lane, 1,050-km (650-mile) road that would have run through Uttar Pradesh state and connected one of the country's most backward regions to the doorstep of the nation's capital.

Supporters of the Ganga Expressway project say it would have helped transform Uttar Pradesh, India's most populous state and one of its poorest, and the lives of its 200 million people by slashing travel times and letting industry and townships sprout.

But having been in and out of the headlines for years, the project has all but crumbled under the weight of political wrangling, opposition from farmers whose fields would have suffered, and a court order in 2009 stalling construction on environmental grounds.

"It's one of those projects that can change the development map of a region," said Gopal Sarma of the consulting firm Bain & Company.

"At the same time, there is the whole issue of how do you deal with people who have held onto pieces of land for literally hundreds of years, and are not really looking at compensation but are looking to continue a way of life that they have had?"

The failure of the Ganga Expressway offers a snapshot of India's chronic infrastructure woes and a reality check on Prime Minister Manmohan Singh's recent promise to speed up more than 200 key projects.

New Delhi has set an ambitious target to pump $1 trillion into an overhaul of infrastructure over the next five years, revamping roads, building airports and tackling endemic power blackouts. But, as the Ganga Expressway shows, such targets are all too often held hostage to harsh realities on the ground.

It's also symptomatic of how, for India's leaders, political expedience often trumps the need to revive investor sentiment and growth. In recent months, one party in the ruling coalition blocked a proposal to open the retail sector to foreign investment and the government has dithered on slashing costly state subsidies on fuel, fertilizers and food.

"It was a very ambitious project," said a former top state official who was closely involved in the expressway proposal, speaking to Reuters on condition of anonymity. "The tragedy of the whole situation was that the politics came in.

"People don't know what is good for the state, good for the people, good for the country," the official added.

TREACHEROUS, MIND-NUMBING

Driving across Uttar Pradesh's existing highways can be by turns treacherous or mind-numbingly slow. Cars and trucks jostle with bicycles, bullock carts, cows and goats along what are often narrow and potholed roads, gumming up traffic and prompting drivers to veer dangerously across lanes to overtake.

With a creaking rail network, India relies heavily on such highways to transport goods. But their often-shoddy condition saps the competitiveness of companies and creates supply bottlenecks that have helped keep inflation uncomfortably high.

The average speed of trucks travelling on Indian roads is just 35 km (22 miles) per hour, less than half the 75 km (47 miles) in the United States, according to a report by global management consultancy McKinsey and Company.

The Ganga Expressway was supposed to help change all that. Conceived under Mayawati, a four-time chief minister of Uttar Pradesh with prime ministerial ambitions, the stone was unveiled with much fanfare on her 52nd birthday in January 2008.

A contract to build the road was awarded to a unit of Jaiprakash Associates, a construction and infrastructure giant that also built India's Formula One track. Sameer Gaur, a top executive at the group who led the project, declined to comment for this article.

Under the state government's proposal, the company was to both fund and build the project. In return, it could charge toll fares and develop potentially lucrative real estate along the road - a version of the public-private-partnerships (PPP) that cash-strapped Indian governments have pushed in the sector.

But as is so often the case in India's troubled infrastructure story, one person's key development project is another person's land grab.

Farmers, egged on by what was at that time the state's main opposition Samajwadi Party (SP), said the project would rob small landholders of fertile land and their livelihoods.

Grumbling about inflation, power and water shortages, the farmers have scant faith in politicians and struggle to see how a massive highway running over their lands would benefit them.

"The government has done nothing for us except raise prices," said one, Dinesh Rai. "We are fooled by every party that comes in."

"What are we going to sell if we can't grow anything? What will we carry along an eight-lane road? Mud?" joked another, Jitender Kumar Yadav.

The SP, which booted Mayawati out of office in state elections in March, called the project a conspiracy and staged protests.

Ambika Chaudhary, the revenue minister in the new government, proudly told Reuters his activists, then in opposition, caused such a furor that Mayawati scrapped a planned trip to lay the foundation stone in 2008. Instead, she unveiled it at the state capital, Lucknow, and later had the stone transported to its current location.

"She did not dare to come to Ballia," Chaudhary said. "We protested like anything and the program was cancelled."

BRAKES

Officially, the Ganga Expressway still exists on paper, but with SP in power in Uttar Pradesh, it is unlikely to be built, at least for years.

Across India, poor infrastructure has helped put the brakes on the once-stellar growth of Asia's third-largest economy, which has dropped to its slowest pace in nine years, and businesses are clamoring for more policy action.

Lacking the financial muscle that China has to bring its infrastructure up to speed, New Delhi has turned to the private sector to fund half of the $1 trillion target.

But time after time, big investments fall prey to red tape and battles over land, stalling projects for years. Firms complain bureaucracy and corruption delay the awarding of contracts, while debt to fund new ventures is scarce and the market in which to bid for them too aggressive.

As a result, New Delhi has consistently missed construction and funding targets for many sectors in recent years. Out of 583 projects worth more than 1.5 billion rupees ($27 million) each, 235 are delayed, according to the government's 2011-12 economic survey.

Roads are the worst hit, although the $8 billion Golden Quadrilateral project, that links big cities New Delhi, Mumbai, Kolkata and Chennai with modern highways, has been mostly completed.

Examples abound of projects hit by similar woes to the Ganga road. The KMP Expressway, aimed at slashing congestion in the capital, was meant to be completed a year before the 2010 Commonwealth Games in Delhi. Instead, land disputes and delays in obtaining clearances caused it to miss several deadlines and it is now scheduled to be finished next May.

Bain's Sarma estimates that India will only achieve about $650 billion of the $1 trillion target, and that number could fall further if the government fails to lift corporate sentiment with some key policy decisions over the next 3-6 months.

"We still are facing huge policy paralysis to get projects moving forward. Project pipelines are slow," he said.

Facing an avalanche of criticism over his government's handling of the economy, Singh has raised infrastructure targets and rolled out a system to track key projects.

A senior government adviser, speaking on condition of anonymity, said the renewed push would help make individual ministries more accountable on performance, but added that he didn't "expect miracles".

For now, infrastructure players will likely wait and see whether Singh can deliver on his promise of a new impetus.

"(We're) not too optimistic, to be frank with you, because it is not the first time that such intentions have been made public," Vinayak Chatterjee, the chairman of Feedback Infrastructure Services, told Reuters Television.

"But I think there is a sense of fatigue with mere announcements of targets or mere announcements of new projects."

(Additional reporting by Sharat Pradhan in Lucknow and Ankush Arora in Gurgaon; Editing by John Chalmers and Raju Gopalakrishnan)

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Comments (3)
Shiv wrote:
Why would someone who has land sell(pennies) it to a company for them to make profit? The Companies and Govt should share the profit. They just cannot grab the land from poor and profit from it in the name of development.
Sell the land what should they do after that? There are no jobs.
There is going to be social uprise on such issue until a win-win solution thought. For me this article looks baised, it only present the capitalists and their thoughts.

Jun 25, 2012 8:53pm EDT  --  Report as abuse
paintcan wrote:
The public/private partnership worked in the days of the US railroad-building boom after the Civil War. It was a land grab and those entrepreneurs were known as “Robber Barons”, but it worked and it was built very quickly. They were usually taking farmland. The later era mega-barons, like Vanderbilt and Harriman, built vast rail networks and even ensured standardization of rail gauge and rolling stock industry wide.

It will never happen again here. I can’t imagine India ever being able to build extensions to existing rail or highway ROWs so they will very likely not have a modern interstate highway system other than that core network tying the major cities together.

It could be strange if the system can’t be expanded. One part of the country would be living at the modern pace and the rest outside that network would be living at it’s own. But I would think the country of India would want a highway system that connected all state capitals, at the very least.

It’s ironic that the more “empowered” people are – the more likely the old forms of infrastructure improvement get harder to do. The interstate highway system could not be easily expanded today. It most likely wouldn’t have been built at all if they had waited 50 years. And it would be very difficult to revive the extensive railroad networks of 100 years ago.

Maybe what India should try to do is encourage local road construction of all kinds of networks built by small-scale local firms and wait until they form the more substantial statewide networks that can later be augmented with major arteries? It sounds like they are doing it from the top down while this country started its highway networks from the bottom up. The major highways tend to occupy parallel, and even contiguous, ROWs with the older state roads and railroad lines. The local networks sound like they are terrible and that really wasn’t always the case here. There were also many toll roads.

The entrepreneurs should make the people they buy out using eminent domain powers, shareholders in the corporation, or make cash payments augmented with stock.

Perhaps the whole idea of a major auto base interstate highway system should be reconsidered for India? Sustainable development may like a “slow” approach to standards of living.

Jun 25, 2012 10:23pm EDT  --  Report as abuse
John2244 wrote:
What this article fails to state is that in about 23 of 28 India’s states, caste voting isnt to a degree where it is in the 5 poorest states. In these states the opposition actually fights against development from the ruling party to win votes. The rest of India has had its traditional bribery, overrun, and quality problems but on the whole, highways, ports, and airports are being built on schedule and in budget. There are not enough of them and the equal can not be said for rail (cargo) and electirc grid improvements.

Problems everywhere – but the specific political problems of UP, Bihar, and other caste driven politcal states do not represent most of the territory of India.

Jun 26, 2012 5:21am EDT  --  Report as abuse
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