Extension of Bharatmala Phase 1

Context: Phase 1 of the Bharatmala project deadline has been extended by six years, to FY 2027-28. 

News:

• Project Initiation: The first phase of Bharatmala, unveiled in 2017, aimed for completion by 2022.
• Estimated Cost Approval: The Cabinet Committee on Economic Affairs (CCEA) sanctioned the initial phase with an estimated cost of Rs 5.35 trillion.
• Cost Overrun: The Public Investment Board, under the Department of Expenditure, Ministry of Finance, appraised the project and noted a 100% increase in the estimated cost to Rs 10.95 trillion. The per km cost surged from Rs 14 crore to Rs 24 crore, as per the Comptroller and Auditor General (CAG) report.
• Time Overrun: As of November, only 76% (24,416km) of the total 34,800 km project length has been awarded, and merely 42% (15,045 km) has been completed.
• New Deadlines: The Ministry of Road Transport and Highways (MoRTH) aims to secure all clearances (land acquisition, environmental, etc.) by the end of 2024-25 and award the remaining project. The construction completion deadline has been extended to 2027-28.
• Reasons for Delay:
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  • Escalation in raw material costs.
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  • Increased expenses and lingering disputes related to land acquisition.
  • Impacts of the COVID-19 pandemic on construction activities.
  • Lack of a systematic prioritization method and unclear completion timelines, as per the CAG report.
  • Rise in Goods and Services Tax rates.

Cabinet Committee on Economic Affairs (CCEA):

• The CCEA is a Cabinet committee chaired by the Prime Minister
• Functions:
  • Formulation of Economic Policy: The committee is responsible for developing a comprehensive and cohesive economic policy framework for India.
  • Direction and Coordination: It directs and coordinates all economic policies and activities across the country.
  • Price Control: The CCEA oversees the price control of industrial raw materials and products.
  • Performance Review: It conducts reviews of the performance of Public Sector Undertakings (PSUs).

Bharatmala Pariyojna:

• A centrally funded project aimed at the development of roads and highways across India, designed in two phases.
• Objective: The project's goal is to enhance road connectivity, focusing on border areas, coastal roads, major and non-major port connectivity, efficiency improvement of national corridors, development of economic corridors, expressways, inter corridors, and feeder routes.  Integration with Sagarmala is also a key aspect.
• Phase I Overview: This phase concentrates on the development of economic corridors, feeder roads, and expressways, covering 34,800 km out of the total length of 74,942 km.
• Nodal Ministry: The Ministry of Road Transport and Highways is the overseeing authority.
• Implementing Agencies: Execution of the project involves collaboration with the National Highways Authority of India (NHAI), National Highways and Infrastructure Development Corporation Limited (NHIDCL), and State Public Works Departments.
• Funding Mechanism: The project's financial support is derived from various Sources, including the collection of Cess from Petrol & Diesel (in accordance with the Central Road & Infrastructure Fund Act, 2000), Toll Tax, Monetisation of National Highways through TOT (Toll-Operate-Transfer), Internal & Extra Budgetary Resources (IEBR), and Private Sector Investment.