Road transport challenges India

REsearch study
2015
Road Transport
challenges
In india

PART I: WHICH EVOLUTIONS FOR INDIAN RAILWAYS?
Interview of Mr Vinod Bhatia, Director of the Railway Board at Indian Railways
Indian Railways set for a radical overhaul
Interview of Mr Kunal Singh, Research Associate at Centre for Policy Research
PART II: MAIN CHALLENGES FOR TRUCKS IN INDIA
How to prevent the increasing problem of overloaded trucks?
Interview with Volvo Trucks India
An overview of Road Transport Challenges
PART III: TRUCKS RADIALISATION
Radial tyres have virtually replaced bias
Interview with Michelin India
Interview with Apollo Tyres
PART IV: ROAD & INFRASTRUCTURE
Will the Gadakri-led road ministry live up to its promises?
Possible solutions to relieve traffic congestion on Indian roads
BIBLIOGRAPHY
ABOUT INDIA TRANSPORT PORTAL
TABLE OF CONTENTS PART I:
Which
evolutions
for indian
railways?

the powers of the Government of India in regard
to Railway expenditure. It co-ordinates with other
Ministries of the Government of India for intergrat-
ed development of transport network.
The main initiatives of Railway Board are:
a) To partner with key stakeholders: States, Pu-
blic Sector Unit’s, multilateral and bi-lateral orga-
nizations & other governments to gain access to
long term financing and technology from overseas,
the private sector to improve last mile connectivity,
expand fleet of rolling stock and modernize our
station infrastructure.
b) Indian Railways is envisaging investment of
$142 billion in next five years. This capital will be
mobilized from multiple sources i.e Multilateral
development banks, pension funds.
c) Targeting operating ratio for 2015-16 at 88.5%
against 91.8%in 2014-15: best in the last 9 years.
d) To speed up decision making, tighten ac-
countability, improve management information
systems: training and development of human
resource.
e) To Develop and introduce High Speed
ITP: You are director at the Railway Board, and
you will be a speaker at the 5th Annual Modern
Railways taking place in Indonesia. What will be
your key messages?
MR Vinod Bhatia: Indian Railways has under-
taken the task of modernizing the massive Rail-
ways system. This task involves, organizational /
management support, substantial funding, new
direction, new thinking, mobilization of resources,
innovative PPP and new business models, and a
lot more. Government of India in August, 2014 has
permitted Foreign Direct Investment in construc-
tion, maintenance and operation of the identified
areas in Indian Railways. There are unprecedented
opportunities in Indian Railway system. Indian Rail-
ways is interested in closely interacting and work-
ing with industry and stake holders.
ITP: What is the Railway Board and what are
your main initiatives?
The Railway Board is the chief administrative and
executive body for the administration, technical
supervision and direction of the Railways. The Rail-
way Board has also been vested with certain pow-
ers of the Central Government and it also exercises
IntRODUCTION with MR. VINOD
Bhatia,
director of the railway board
at indian railways
Copyright India Transport Portal Road Transport Challenges 2015
are expected to enhance the passenger’s travel
experience.
ITP: Indian roads are still carrying most of the
freight. How would you comment the rail/road
freight transportation in this area?
Indian railways is targeting to increase its freight
share from 35% to 50%. This will be achieved by
creating carrying capacity through capacity en-
hancement works on High Density Networks and
providing new value added services on a custom-
ized basis. Par-
ternership with
major logistics
providers, pro-
curement of High
speed and high
capacity wagons, close linkages with the custom-
ers, strengthening of its position in bulk commodi-
ties like Coal, Cement, Iron ore and utilizing Infor-
mation Technology to meet delivery schedules are
some of major initiatives undertaken
by Indian railways. Two dedicated
freight corridors i.e. Eastern and
Western will be operational by 2020.
Preliminary engineering-cum-traffic
surveys (PETS) for four other DFCs
are in progress. This would create
adequate capacity to meet the freight
demand. Incentives to major customers have been
offered to invest in efficient terminal handling sys-
tems to reduce turn-round of the wagons.
ITP: What changes can we expect with the Rail
Budget 2015?
Rail Budget 2015 marks beginning of a Five Year
Action Plan to transform the Railways by setting
higher standards for Governance and Transpar-
ency. A medium term perspective to increase
daily passenger carrying capacity from 23million
to 30 million, increase track length by 20% from
1,14,000 km to 1,38,000 km and grow our annual
freight carrying capacity from 1 billion to 1.5 billion
tonnes
has been
initiated.
Estab-
lishing
‘waste to
energy’conversion plants, online booking of dis-
posable bed rolls, provision of bio toilets, issuing
unreserved tickets through smart phones, smart
cards for ticketing, e-catering by integrating best
food chains, Introduction
of‘SMS Alert’to inform
passengers about up-
dated arrival and depar-
ture time, provision of
concierge services, user
friendly ladders for climb-
ing upper berths, new
Braille enabled coaches, development of 10 Satel-
lite railway terminals in major cities for decongest-
ing these cities are some of new initiatives which
“Indian Railways is targeting to in-
crease its freight share from 35% to
50%”

Copyright India Transport Portal
10.8 billion has been marked for High speed Rail
Elevated corridor and $ 2 billion will be utilized for
enhancing Passenger Amenities.
ITP: In India, railways infrastructure is not as
discussed as road construction but how would
you describe it and the investment it requires?
In last few decades, the expenditure on Railways
infrastructure as a percentage of total transport
expenditure has declined considerably. Railway ex-
penditure as percentage of transport sector expen-
diture used to be about 56% in 7th Plan (1985-90)
which has reduced to 30% in 11th Plan (2007-12).
Indian Railways in last two decades has remained
under-invested whereas the road sector has wit-
nessed a surge in investments.
The share of Indian Railways in overall GDP has
been static at 1% and has, in fact, gone down to
0.9% in 2012-13. Since 1951, while the freight load-
ing has grown by 1344% and passenger kilometers
by 1642%, the Route kilometers have grown by
only 23% and Doubling Multiple route length by
only 289%.
There is a large shelf of pending projects which is
estimated at $ 80 billion on the basis of original
estimated costs. Of these, fund requirement for
the prioritized works such as doubling, new lines,
gauge conversion, traffic facilities, signal telecom
works, workshops and electrification is estimated
at $ 35 billion. Over the next five years, Indian
Railways is envisaging an investment of $ 142 bil-
lion. Out of these, $ 16.67 billion will be utilized
for Station redevelopment and logistic parks. $

Indian Railways set for a radical
overhaul
“One of the main reasons that the Indian
railways has survived is because is has no
competitors.”
Copyright India Transport Portal Road Transport Challenges 2015
technology that it needs to cater efficiently and
effectively to India’s teeming population.
There is no doubt in either the government’s
or the common peoples’minds that Railways
needs a makeover and huge investment. Railways
has been losing traffic share, both passenger and
freight, for over half a century.
Sadly, this vital element of infrastructure has
progressed abysmally in the years since the first
train ran between Mumbai and Thane in 1853
where it carried 400 passengers 34 km at a speed
of 28 kmph in about 1.5 hours. Now the trains
between these two destinations run at an aver-
age speed of 50 kmph. Perhaps one of the main
reasons that the Indian Railways has survived is
because it has no competitors.
ndian Railways’ rickety coaches trundling
past ill-maintained stations may soon be a thing
of the past says the new government. The loss-
making national transporter is expected to see a
major facelift with ambitious promises of mod-
ernization and better operational efficiency.
The lifeline of millions of commuters, the Indian
Railway network is massive albeit a tad rickety. One
of the largest employers in the world, the national
transporter is ready to take the‘Big Leap’and
transform itself from the abysmal state it is in to an
efficient, modern system. People of India are skep-
tical about the fantastic promises various govern-
ments have been making over the years. This relic
of the British Raj has stood the passage of time but
has been unable to integrate modern and requisite
mixed reactions about the‘radical rail overhaul.’
It may take India decades to realise the dream
of trains like the local version of the Shinkansen
running the tracks. Modi’s Diamond Quadrilateral
lines will have to wait and a compromise of sorts
has been arrived at—semi-high speed rail service
that will link India’s biggest cities. China is expect-
ed to help with expertise and funding to build a
high-speed corridor between Chennai and Delhi,
whereas Japan’s technological know-how and
investment will be leveraged to introduce a high-
speed
service
in the
Mum-
bai-
Ahmedabad section. Feasibility studies are
underway for nine high-speed corridors that have
been identified. With India requiring an invest-
ment of $137 billion over the next five years,
other advanced nations such as France are also
keen to bid for a share to upgrade India’s un-
derdeveloped rail sector. The Dedicated Freight
Corridor (Eastern and Western) project is facing
land acquisition challenges as of now. DFCC is be-
ing funded by the Japan International Coopera-
tion Agency and the World Bank. Work is picking
up pace and these corridors are expected to be
complete by the end of 2019 (two years behind
schedule).“Dedicated freight corridors will free
up 70% of Railways’carrying capacity,”said Adesh
Indian Railways is characterized by operational
inefficiency that beggars belief and its peripherals,
research and development, and manufacturing
units are also in varying stages of underutilization.
Indigenization of manufacturing should be a key
focus area of the government as it will generate
employment and help cut costs incurred by im-
porting components such as Linke-Hofmann-BI-
usch wheels used for Duronto and Rajdhani. After
gaining independence in 1947, India has added
about 13,000 km to its extensive railway network,
where-
as
China
added
14,000
km in
just five years (2006–2011). India must find ways to
breathe life into this sector as it leads to“improved
land use and urban densification, lower carbon
emissions, reduced congestion and enhanced
energy security”(Deloitte Access Economics Study,
2011).
The Narendra Modi-led Government recognizes
that the railways system needs reforms like never
before. The new regime has even been ambitious
enough to envision an India that has high speed
bullet trains like Japan and China—an expensive
proposition, say critics, in a country where so many
people live below the poverty line. People have

9 Copyright India Transport Portal Road Transport Challenges 2015 10
private sector participation and not privatization
or transfer of ownership. Most people are happy
with recommendations that relate to setting up
an independent regulator, decentralization, track
access and commercial accounting. India needs
a fair system to regulate and set passenger fares
and freight rates. How do they plan to make this
system vibrant again? In the Budget speech in
February 2015, the Union Minister for Railways,
Suresh Prabhu, said,“What is important is how we
sustain the Indian Railways. We need to regener-
ate the Railways.”Improving the travel experience
seems to be a focus area for this party. He added:
“A major part of my Budget focussed on passen-
ger amenities like cleanliness and toilets. If cus-
tomers realise they are getting something, they
will be ready to pay. The direction is very clear.
We want to make the Railway self-sustainable
and profitable. We want to put the money back
into the system.” The ministry seems to have kept
at least 39 of its promises if one is to believe the
press release in May, including improving the
quality of food and cleanliness in the coaches and
stations, setting up emergency helplines, making
booking tickets and retiring rooms easier, signing
MoUs to improve rail design, obtain funding and
Committees over the years have recommended
that the Railways split functions and a Railway
Tariff Authority be established; corporatization is
important and experts believe that setting up a
holding company is the way forward. The Debroy
Committee in its interim report (April 2015) said,
“Private entry into running both freight and pas-
senger trains in competition with Indian Railways
should be allowed and private participation in
various Railway infrastructure services and non-
core activities like production and construction,
should be encouraged by the ministry.”The seven-
member panel said,“It is imperative to split the
roles of policy-making, regulation, and operations.
There should be clear division of responsibility be-
tween the government and railway organizations.
The Narendra Modi-led Government recognizes
that the railways system needs reforms like never
before. The Ministry will only be responsible
for policy for the railway sector and Parliamen-
tary accountability and will give autonomy to
Indian Railways.” However, the Rail Union has
rejected the Debroy report and railed against
rail restructuring through privatization modelled
on that used in the UK and other rail systems in
Europe. The ministry insists that it is pushing for
ment those already awarded. Indian Railways
needs close to INR209,000 crore (~USD33 bil-
lion) for priority projects that deal with‘doubling
new lines, gauge conversion, traffic facilities and
electrification.’There are pending projects worth
about INR492,000 crore (~USD78 billion).
This government is all set to turn Indian Rail-
ways into what it calls‘an engine of economic
growth.’The incumbent railway minister seems to
be dynamic and ready to implement some much-
needed measures vital to the modernization of
the rail sector. Compared with the expectations
people had, undoubtedly the reforms have been
modest since the NDA government came into
power a year ago, but no one can deny the fact
that it has certainly brought about an impressive
wave of transformation.ns such as France are also
keen to bid for a share to upgrade India’s un-
derdeveloped rail sector. The Dedicated Freight
Corridor (Eastern and Western) project is facing
land acquisition challenges as of now. DFCC is be-
ing funded by the Japan International Coopera-
tion Agency and the World Bank. Work is picking
up pace and these corridors are expected to be
complete by the end of 2019 (two years behind
schedule).“Dedicated freight corridors will free
up 70% of Railways’carrying capacity,”said Adesh
Sharma, MD, Dedicated Freight Corridor Corpora-
tion of India Ltd (DFCCIL).
expedite rail connectivity, and introducing tech-
nology in some spheres (surveillance cameras,
e-ticketing, e-concierge, mobile charging facilities).
Suresh Prabhu said,“In the next few months we
should be able to put in place a complete blue-
print”to achieve these goals without denting the
rail finances.”
The $140 billion reboot proposed for the next
half a decade to enhance safety, build new rail
lines and finish pending projects will require enor-
mous amounts of investment. Along with budget-
ary support, the ministry will be aided by the Life
Insurance Corporation of India (LIC), which will
provide $25 billion (in the form of debt) in the
next five years—a great step forward in attracting
private investment without risking the‘public debt
dynamics.’Last year, the government decided to
allow FDI for‘construction, maintenance and op-
eration’of certain‘identified areas.’Various govern-
ments refused to increase rail tariffs and instead
upped freight rates, moves that led to more losses
for the decrepit rail sector. here are pending
projects worth millions of dollars. For every ru-
pee the Railways earns, it spends 96 paise; there is
barely enough to reinvest. The ministry is actively
considering many alternative sources of funding
such as monetization of railway land, approaching
multilateral funding agencies, tax-free bonds and
joint ventures (for suburban rail) with state govern-
ments. The defence ministry may fund rail projects
along the India-China border. The rail ministry has
to increase the pace of project awards and imple-

Interview with MR. Kunal Singh
Research Associate at Centre for
Policy ResearCH
for freight transport carried by railways so as to
cross-subsidise passenger trains. This results in fr-
ieght shifting to roads having deleterious impacts
on both the economy and the environment. Till
very recently, the diesel was subsidised in India
thus providing a license to pol-
lute to the vehicle owners.
So, while India has to in-
crease the density of its road
network in order to connect
the unconnected but at the
same time decrease the share
of road transport compared to
rail and waterways. National
Transport Development Policy
Committee chaired by Dr.
Rakesh Mohan estimated a
freight traffic to GDP elasticity
ratio of 1.2 and correspond-
ing number for the passenger
traffic was 1.9. Using these elasticity ratios and
expected economic growth figures, one can cal-
culate a rough estimate of road network in 2020.
But the real challenge is what I stated before:
augmenting road network while augmenting rail
and waterways way more so that share of road
traffic decreases.
ITP: What are the main evolutions the Indian
road transport sector will go through by 2020?
Road transport represent unique challenge
to India at the moment. While there is certainly
a need for augmenting the current network, the
share of road transport has to be brought down.
There are two issues in-
volved here. One is the
inevitability of road net-
work solving the last mile
connectivity problem. It
is much easier to build a
road network to all nooks
and corners of the country
compared to a rail network.
Water transport depends
on geographical factors. It
is also proven that proxim-
ity to roads increase the
social well-being of the
neighbouring towns and villages. Not only they
provide easy access to markets for farm products
but also greater opportunities for non-farm em-
ployment.
At the same time, the second issue involved
here is the increasing share of roads in the over-
all transport choices is bad for energy efficiency
and carbon footprint. We charge very high tariffs
has to invest in its infrastructure. If the private
companies can’t do it, the State has to do it. Wait-
ing is not an option anymore.3/ The Indian road
network is the second largest in the world and is
ranked 87th in the world for its quality. How do
you think India could improve its road network?
What are the most important barriers the country
faces?
India has to focus on a number of things. The
regulatory system is a mess. PPP has not proved
to be the kind of
panacea it was
presented to be.
In fact, the insti-
tutions are weak.
The institutions
as they exist are
unable to enforce the contracts. The cases end up
with the judiciary which leads to severe delays
before any conclusion is reached. The regulatory
maze also creates incentives for private gains at
the cost of public goods . The entire regulatory
structure has to be relooked.
Funding is obviously another problem. It is a
problem because pricing is a political issue rather
than an economic issue. Toll booths have become
the new arena for political showmanship. Toll
booths are politically unpopular.Poor oversight,
regulation and politicking creates enough incen-
tives to not pay attention and resources towards
maintenance of the roads.
ITP: China is supposed to surpass India from an
economical point of view within the next years.
Is the transport sector involved in the Indian
growth? Can the lack of infrastructure (rail and
roads) be an obstacle to the Indian growth?
India will only surpass in growth figures, not ab-
solute GDP. Transport sector is obviously a factor in
India’s growth. The Government is focused on mak-
ing Railways as a pivot around which high rates of
growth can be achieved. The chapter on Railways
in the Economic Survey
makes for a very good
reading. It calculates
the impetus that the
Railways can provide to
the economy through
its forward and back-
ward linkages. The roads also provide significant
opportunities for growth. But the latter“road”was
taken by the previous NDA government under Atal
Bihari Vajpayee that served from 1998 to 2004. In
fact, the Economic Survey recognises this and talks
about recreating in Railways what the previous
NDA government created with rural roads.
The lack of infrastructure is an impediment.
Ask any investor and he will state the lack of in-
frastructure as one of the top three reasons that
deters him/her from investing in India. It is not just
the transport but also other things like chronic
power cuts. The inland connectivity from ports is
not good. The last mile connectivity is poor. India
“Transport sector is ob-
viously a factor in In-
dia’s growth”
Copyright India Transport Portal 11 Road Transport Challenges 2015 12

ty is last on anyone’s mind – resulting in so many
deaths. Overloaded and unlicensed vehicles ply-
ing on the roads only add to the problem
ITP: What major improvements India should
go through in its rail sector by 2020?
The Interim Report presented by Dr. Bibek
Debory Committee is on the website of Ministry
of Railways. It presents a comprehensive plan
for reforming the railway sector for next seven
years. Railway board has to be restructured and
Debroy Committee has useful suggestions for it.
The Accounting practices have to be reformed.
Private entry has to be encouraged. Decentralisa-
tion from Board to the Zones and then to Divi-
sions should be the way forward. Setting up of a
regulator and removing some of the restrictions
in tariff setting will encourage private players to
operate in this space.
ITP: The Minister of Railways is willing to es-
tablish technonlogy collaboration with China
but is ready to consider some others with
Japan, France…What do you think of such col-
laborations?
The collaboration is good. With one caveat. Some
of the collaboration is on high speed and bullet
trains. While the government had announced
that it will deliver a bullet train from Mumbai to
Ahmedabad. It should not announce more before
taking a hard look at the facts. In my opinion,
Another reason is safety. Road safety is completely
neglected in India. While designing the roads,
safety is last on anyone’s mind – resulting in so
many deaths. Overloaded and unlicensed vehicles
plying on the roads only add to the problem.
ITP: The Indian road network is the second larg-
est in the world and is ranked 87th in the world
for its quality. How do you think India could
improve its road network? What are the most
important barriers the country faces?
India has to focus on a number of things. The regu-
latory system is a mess. PPP has not proved to be
the kind of panacea it was presented to be. In fact,
the institutions are weak. The institutions as they
exist are unable to enforce the contracts. The cases
end up with the judiciary which leads to severe de-
lays before any conclusion is reached. The regula-
tory maze also creates incentives for private gains
at the cost of public goods . The entire regulatory
structure has to be relooked.
Funding is obviously another problem. It is a prob-
lem because pricing is a political issue rather than
an economic issue. Toll booths have become the
new arena for political showmanship. Toll booths
are politically unpopular. Poor oversight, regula-
tion and politicking creates enough incentives to
not pay attention and resources towards mainte-
nance of the roads.
Another reason is safety. Road safety is completely
neglected in India. While designing the roads, safe-
here is no point runnin high speed or bullet trains
in India if it has to be subsidised by the Govern-
ment.
ITP: Is Make In India a project which could reig-
nite growth in the transport sector?
Yes and no. Yes, because in transport sector, we
have a domestic consumption sector that can
support initiatives like Make in India when global
demand is falling. No, because there are many
hiccups in the full-fledged success of Make in India
program. There are a variety of reforms on land,
labour and capital that has to go through. The
regulatory institutions have to be relooked at. The
judicial system has to be agile and effective. The
jury is out on this one.
Copyright India Transport Portal 13 Road Transport Challenges 201514

How to prevent the
increasing problem of
overloaded trucks?
PART II:
Main
challengeS
for trucks in
india
Road Transport Challenges 2015 16
Bengaluru has shown that 4,000 driving licenses
were cancelled in 2013 for vehicles caught plying
on footpaths.
“These are comprehensive efforts by the govern-
ment to crackdown on overloading and pro-
truding besides safeguarding pedestrian rights.
Bringing the consignees, common carriers and
transport agents under this law will put an end
to the practice, which is a serious threat to other
road users”, said SP Singh of IFTRT, a Delhi based
think tank on transport issues.
Two overloaded trucks recently overturned on
the Bareilly-Haridwar national highway number
30 near Nisra Village in the Pilibhit district. The
highway became blocked resulting in a huge
traffic jam lasting hours.
The Indian government want zero tolerance on
overloaded vehicles, the illegal plying of “over
dimensional” vehicles and vehicles carrying pro-
truding items such as metal rods. A high penalty
has been proposed for those who fail to comply
with the new rules, with a suspension of permits for
one month upon first offence and a cancellation of
permits if the offence is repeated.
Overloading damages the quality of roads and can
be the cause of fatal crashes. In 2013, approximate-
ly 38,370 people were killed as a result of‘overload-
ing’. To safeguard pedestrians and cyclists, the bill
will introduce fines of Rs 2,500 ($40) for first time
offenders and Rs 5,000 ($80) for a repeat offence. If
a vehicle is parked on these stretches or if vehicles
are caught driving here, fines will also be imposed.

trucks backed by
strong Aftersales
Support – robust service network and customized
service agreements both in off-road and on-road
application segments. Last year in 2014, we have
launched all new technologically most advanced
Volvo trucks range in India.
ITP: According to you, what are the biggest
challenges for road transport in India? (Freight,
road construction, road safety…)
Road transportation is
the predominant choice
for freight transport
in India contributing
to around 60% overall
freight movement and
passenger traffic as well is increasing consistently
over a period of time. But there are several chal-
lenges which are impacting the road transport ef-
ficiency – delayed road construction projects, poor
quality of roads, urban roads heavily congested,
rural area have very bad condition of roads, fluctu-
ating fuel prices but freight rates not proportion-
ate etc. Also, majority of the trucking industry is
fragmented with small fleet operators occupying
a major portion resulting in overloading of trucks
to reap individual benefits. Several other issues like
ITP: Volvo Trucks is the leader of the pre-
mium trucks manufacturers in India.
How do you explain such a success? What
are your next steps for India’s market?
Volvo group in India have initiated its operations in
1996 and now with over 17 years of our presence
in India, Volvo trucks been delivering the best in
class Safety, Uptime, Fuel efficiency, Productivity
and superior overall lifetime profitability for our
customers and hence the market leader in premi-
um trucks segment with
a strong market share
of over 60% as of end of
2014. Even before setting
up a manufacturing unit
in 1998, we started our
workshop and a driver training center which shows
our commitment towards Aftersales support and
driver development. Volvo launched its first truck
model the FH12 340 6x4 Tractor in June 1998 with
a mission to“Drive the Change”in the Indian CV
industry. This was the first high performance (HP)
heavy duty tractor with state of the art features
and technology at a time when majority of CV in-
dustry was ruled by low horsepower (120-160 Hp),
low technology trucks. Since then we have been
driving progress in the industry through introduc-
tion of innovative and technologically advanced
17 Copyright India Transport Portal
Road Transport Challenges 18
Interview with volvo
trucks india
“Safety is one of
Volvo’s core values”
Nirmal Kumar Visht told Times of India that over-
loaded trucks carrying sugarcane more so than
often cause traffic jams on this particular road.
He said that truck owners and sugar mill admin-
istrations have been warned several times and
that legal action has been taken before, but truck
operators continue to overload.
The revised draft of the Road Transport and Safety
bill stated that the road transport ministry has
brought these categories of vehicles under the
term“overloaded vehicles”. Plus, the list of people
who can now be held responsible for such, now
includes not only
the driver but the
vehicle’s owner for
allowing their ve-
hicles to ply, com-
mon carriers, good
transport agents and
consignees. Road toll
operators can even
be held responsible.
Penalties would be as high as Rs 35,000 ($560)
for mini trucks and buses whereas the fines for
heavy trucks and larger buses would increase to Rs
50,000. Plus, people will face a one month permit
suspension for the first offence and a repeat of-
fence would result in a Rs 50,000 ($800) fine and
a complete cancellation of permit. If a driver or
owner fails to submit their vehicle for weighing,
the present fine stands at Rs 3,000 ($50).

unorganized toll systems, delays in check posts,
traffic congestion etc. lead to low average speeds
and thus affecting the fleet operators profitability
and thus economy. Above all, Safety is the big-
gest concern with each year India losing up to
3 per cent of its GDP due to road accidents. The
new road transport and safety bill proposed by
the MoRTH would likely address many of these
challenges
ITP: Poor road conditions in India seem to
damage trucks. How can India prevent this to
happen? How Volvo trucks could respond to
this challenge?
Roads quality is not being maintained prop-
erly in India and it also affects the trucks badly.
Poorly maintained roads will lead to low average
speeds, break-down of the vehicle, increased
wear and tear, poor tyre life and also increases
the driver fatigue. With the low average speeds
and bad roads, fuel consumption also would
likely increase. In all, the average operational and
maintenance costs go up. Volvo trucks are built
robust with rugged chassis, high performance
engines matched to optimized driveline and sus-
pension systems that offer smooth ride handling
and comfort even in bumps/bad road conditions.
(GDP).
ITP: How Volvo trucks is tackling road safety
and driver’s safety in India? Which steps could
be taken in India to improve road safety and
stop trucks from overloading?
Safety is one of Volvo’s core values and Driver
Productivity a key deliverable. We conduct the
extremely tough cab crash tests at our collision
centre in Sweden. All cabs meet the Swedish cab
strength standards – the toughest in the world.
The vehicle is equipped with list of features to
ensure high level of active and passive safety e.g.
better visibility, powerful headlight beam, sun-vi-
sors, extra footsteps etc.
Two new introductions with our technologically
advanced trucks - the new Volvo FMX, FM FH
are“Red Safety Belt”and“Electric Parking brake”.
Red Safety belt brings more focus towards the
driver to use safety belt without miss.
The parking brake activates automatically when
the engine is turned off to ensure high degree
the driver now has to focus only on manoeuvring
the vehicle (Hands on wheel – Eyes on road)
In addition to this, out of the twenty require-
ments prescribed by DGMS through Circular No.
05 dated 13th October 2010, fifteen are provided
as standard features in Volvo FMX.
Following features are offered as accessory fit-
ment based on customer requirement.
- Fire Suppression System
- Proximity warning device
- Rear Vision System
- Load indicator and Recorder
- Auto dipping system (is not available currently
and is under development).

and investment of the transport sector
becomes integral to realising the vision.
Rail and road are the principal modes of
transport in India. Road transport conti-
nues to be the dominant mode of trans-
port in India despite the c
ountry being home to one of the largest
rail networks in the world. Poor design
and maintenance of the roads coupled
with rash driving has made India’s roads
the most unsafe in the world. Corrup-
tion and poor traffic management add
to the sector’s woes. Road transport is
the primary logistics provider in India.
In terms of passenger traffic, the share
of road transport has steadily increased.
In the last few years, roads have over
taken rail in terms of freight movement.
As the backbone of an economy, the
logistics sector has to provide cost-ef-
fective, prompt and reliable transporta-
tion of goods India is yet to fully realise
the immense potential of its waterways
and extensive rail network. India has to
re-apportion funds to ensure that the
rail share in freight traffic increases to 50
percent. Analysts say that India will have
to come up with a national policy that
will‘reduce economic waste and improve
The eyes of the world are on India, an eco-
nomic power that is steadily growing in
strength and influence. Overcoming its
road transportation handicaps is vital if the
country is to realize Modi’s vision. Increasing
levels of radialisation in the trucking seg-
ment is perhaps a hint of the progress that
will provi-
de a much-
needed
fillip to the
commer-
cial sector—often considered an indicator of
economic growth.
India is all set to walk the path of economic
progress and attain sustainable growth in
the next two decades. When the country as-
pires to achieve four times the real per capita
income today by 2032, the development
Road transport accounts
for 65% of freight in India
an overview of road
transport challenges
Source: http://www.kpmg.com/in/en/issuesandinsights/articlespub-

energy efficiency.’Given India’s need to manage
energy issues and control emissions, shifting the
excessive dependence from road to rail will be
critical to achieving sustainable mobility in the
future. India relies heavily on its roads for trans-
port – roads account for about 65 percent and 45
percent of freight and passenger traffic, respec-
tively. The highly fragmented and unorganised
logistics sector is all set for a complete transfor-
mation with the renewed focus on this sector.
Road transport is largely in the hands of private
parties, each with a small fleet of trucks of the
single-axle type. Most truck owners in India have
less than five trucks;
the‘ownership
profile’has given
rise to a number of
middlemen exerting
varying levels of
influence on profita-
bility and efficiency.
A significant
player in the
movement of
goods, the trucking industry is highly competi-
tive. Truck operator profits depend on operating
costs and freight rates. Factors that plague truck
transport include low capacity utilisation, poor
road quality, vehicle overloading, high transit
times, barriers to free movement and safety
concerns. Low utilisation results typically
from trucks being overloaded and under-
powered. The fatalities that have resulted
due to truck accidents have led to not only
a loss of lives but also economic loss (GDP).
The authorities have been lax in enforcing
overloading and licencing regulations and
there are no incentives for using multi-axle
trucks. Fluctuating fuel prices and high toll
charges increase the running costs of the
trucks. Tyre maintenance is also major factor
in deciding operator profit. Customer choice
in the commercial vehicle segment is slowly
tilting in favour of radial
tyres as these tyres can
enhance profits as they
offer better mileage, du-
rability and performance.
Overloading restrictions
and growth of multi-axle
trucks augur well for ra-
dial tyre manufacturers.
There are positive signs of
economic recovery world
over and the
that,“Radial tyre, by virtue of its peculiar
structure, employs its constituent materials
and structural components to do the intend-
ed work more efficiently than cross ply tyres.
Performance enhancement in terms of wear,
rolling resistance, durability and comfort is
easily realised by a user by shifting to radials.”
He added,“For example, in a bias tyre, only
about 30-40 per cent of the tread compound
is actually used up to providing the mileage
when radials utilise close to 50-60 per cent
by the time of removal for retreading. Slower
rate of wear enhances tyre life, delaying the
replacement demand and this is expected.
But the fears are unwarranted considering
the overall benefits to the customer as well as
to the environment in terms of cost of opera-
tion and emissions.With the first Indian radial
tyre from JK Tyre hitting the domestic mar-
kets in 1977, one would expect the commer-
cial vehicle sector, which got its first radial in
1999 from the same tyre maker, to show the
nearly complete level of radialisation seen
in the passenger vehicle segment. The level
of radialisation in the truck sector India (~20
percent) is not on par with that of China. Ac-
cording to the Vice President (RD) of CEAT
Tyre Ltd. Unnikrishnan G, the reason radialisa-
tion in India lags behind China is because the
aftershocks of the global crisis are becoming
less intense in all sectors. The commercial ve-
hicle industry, generally considered an indica-
tor of economic growth, has steadily grown in
terms of technological innovations especially
in emerging markets in Asia, Africa and Latin
America. Truck makers from China and India
have tailored their marketing strategies and
product design to succeed in the low-cost,
high-growth countries, effectively making
them significant contenders in the global mar-
ket. French tyre giant Michelin, the pioneer of
radial technology, believes that radialisation in
the Indian CV segment will touch 50 percent by
2020. Tyre makers in India such as Apollo Tyres
are increasing the production of truck-bus radi-
als (TBR) to meet the growing demands that
have come with economic progress. Unfortu-
nately, cheaper Chinese surplus radials have
been finding their way to Indian markets and
upsetting the balance. Radial tyres afford sig-
nificant advantages in terms of fuel efficiency,
safety and longevity over bias or ply. Iadial
tyres show lesser transverse slip, transfer more
power to the ground and do not transmit side-
wall flex to the tread. These flexible and strong
tyres absorb shocks better and allow the driver
to enjoy a better driving experience than cross-
ply tyres. Lower resistance results in improved
fuel economy and thereby reduced emissions.
The Apollo Tyres Head of Design Develop-
ment, Global RD–CV, Pradeep Kumar N said
Comparison between a radial and a bias tyre
Source: http://www.bridgestone.co.in/TyreKnowledge.aspx

PART III:
TRucks
radialisation
It looks like radial tyres will be the future because of the multi-
ple advantages of these tyres offer. Radialisation in the com-
mercial vehicle sector is set to improve with people becoming
aware of the benefits and innovations radials offer.
What radial tyres have more to offer?
Developed in 1946 by the French tyre giant Michelin, radial tyres
have revolutionized the tyre market. Unlike a bias tyre which has
an interdependent crown and sidewall, the tread and sidewall
in a radial tyre function independently. Flexible radial ply tyres
absorb shocks better and allow for more road contact than bias
ply tyres. A radial tyre is defined as a tyre in which“the ply cords
extending to beads are laid at approximately right angles to the
centre line of the tread.”Radials have polyester cords that are
“wrapped”perpendicular to the tread direction, whereas as bias
have diagonal nylon weaves that meet at the center line. Radial
tyres, which come in attractive designs, can be either tubeless
radials or tube-type radials.
Radial tyres and drop centers rims
In the tube-type tyres, there is a tube with a valve and rim;
when the tyre gets punctured, air leaks. In tubeless tyres where
the valve is placed on the rim, there is a halobutyl inner liner
and the tyre itself is a tube; in the case of a puncture, the tyre
deflates slowly thereby providing more stability. Tubeless tyres
offer advantages such as better handling, added fuel savings,
easy mounting as they have a single-piece wheel, lesser weight,
longer casing life and reduction of run flats. Tubeless tyres have
higher wheel clearance that leads to lesser generation of brake
margins are low and the market entry bar-
riers and initial investment are high. Also,
the Chinese government provided strong
incentives to promote radialisation at the
start of the last decade and it began phasing
out bias tyres. In China, road quality is better
and the cost of operations, raw materials and
capital is lower. Radials often fail to deliver
in India because people continue to violate
overloading laws. India will have to offer
domestic players policy support to enhance
radialisation. Increasing cus-
tomer awareness, focusing on
RD,‘phasing out’old auto-
mobiles, improving the quality
of the roads and lowering the
capital expenditure will boost
the adoption of radials in the
commercial vehicle sector. Ra-
dialisation in India will surpass
that in China in a few years
say analysts.“Radialisation is
therefore an inevitable forward
step in a developing market
where demand delay will be
compensated by higher demand by increased
economic activity. Faster vehicles, running on
radials will consume tyres more frequently nar-
rowing the gap in replacement time by cover-
ing larger distances in shorter durations”, said
“Michelin, the pioneer of
radial technology, believes
that radialisation in the In-
dian CV segment will touch
50 percent by 2020.”
Source: http://www.kpmg.com/in/en/issuesandinsights/articlespub-
Radial TYRES have
virtually replaced bias
24 Copyright India Transport Portal Road Transport Challenges 26

consumers about sustainable choices.2. By 2020,
we can suppose India will have improved its road
transport as the country would have overtaken
China from an economical point of view. How do
you picture it?
The progress made in the transport sector in India
has been significant. However to
meet the rising demands and also
push infrastructure development,
there are news reports about the
government’s plan to invest signifi-
cantly in road projects this year as
it looks to more than double high-
way construction to 30 km per day,
which will consequently increase
over all transport demand.
ITP: We spoke with Michelin in 2012 about radi-
alisation in India (see the interview here: http://
indiatransportportal.com/michelin-fuel-radiali-
sation-15436.)How did the situation progress
since? What are the barriers if they do exist?
With the country’s road infrastructure developing,
our manufacturing plant offers opportunities for
us to improve transportation of people, goods and
ITP: Road transport is the dominant mode
of transport in India. However Indian roads
are reputed to be the most dangerous in the
world. What are the most important handi-
caps for India’s road transport system? How
can the country improve it?
While India remains
one of the fastest
growing automotive
markets in the world,
our transport infra-
structure is yet to
catch up with the ris-
ing demand. Factors
that can propel our
road transport system
include increase in capacity utilization, improved
road quality, reduced or no vehicle overloading,
controlled transit time, environment conducive
free movement and safety.
Pressure for positive change from the industries
that underpin India’s economic growth can drive
pro-environment legislation, increase govern-
ment attention to infrastructure, and educate
Interview with MR. Mohan
Kumar, Commercial director
at michelin india
Source: http://www.henkorim.com/eabout.asp?key=10clespublic
ations/investing-in-india/pages/tl-june12.aspx27
drum heat which consequently improves the
bead durability. Unlike tube-type tyres, tube-
less tyres have improved lateral stability and
better sidewall and crown durability. In low
aspect ratio radial tyres, the section heights
are lesser than the section widths; they offer
key advantages in terms of sidewall curb
damage, steer and
trail axle tread wear,
weight and lateral
spring rate. For many
applications, lower-
profile radials with an
80 percent aspect
ratio are the most
economical of all tyres. Long haul trucks
and urban trucks often use ultra-low-profile
radials with an aspect ratio of 70 percent.
The basic qualities of truck radials are load
capacity (result of vertical deflection), heat
resistance, and adequate tread contact area
for road grip and steering control.Typically,
vehicles use rims with the drop centers de-
sign or wheel-based design. The drop center
or the rim drop allows the easy mounting (or
demounting) of the radial on the rim of the
wheel. Optimum performance of directional
truck tyres requires them to be mounted on
the correct sized rim wheel. The selection of
a rim or disc wheel depends on the operat-
ing conditions to which it will be subjected.
Off-the-road truck tyres have drop center,
semi-drop center, full tapered bead seat
and flat types of rims. Small loaders gener-
ally use drop centre rims, whereas graders
and loaders usually use semi-drop center
rims. Rim drops are used as a reference when
mounting truck tyres. Typi-
cally, tubeless truck radials
have a 5° or 15° drop center
steel wheel. The difficulty in
assembling the wheel and
servicing depends on how
far the drop center is from
the wheel’s lip and how
deep it is.Radial tyres offer numerous advan-
tages that enhance the driving experience
when compared with traditional bias – high-
er speed, endurance, traction, lesser heat
generation and stability. These tyres have
lower rolling resistance and as a result con-
tribute significantly to ensuring fuel econo-
my. Radials have more potential for retread-
ing and are less prone to tread punctures.
Radial tyres have virtually replaced bias ply
tyres because of their inherent advantages.

road safety in India. These improvements would
be driven in particular by an evolving shift
towards radial tyres and high-quality products
manufactured by Michelin.
The Indian truck and bus market is adopting
radialisation at a steady pace. Given the clear
benefits of fuel savings and longevity of radial
technology and safety, more and more cus-
tomers are switching to radial tyres owing to
reduction of the overall cost of fleet ownership.
Today, around one
fourth of all trucks
on Indian roads
are on Radial tyres,
which was under
1% in 2005. India
has also made a
notable progress in
adopting tubeless
radial technology
for Trucks and Buses
due to the improved road conditions.
Michelin Tyres, the world leader in tyre technol-
ogy, estimates that about 76 billion liters of fuel
can be saved annually should all trucks running
on bias tyres today switch to using Michelin
radial tyres. Fuel savings of this magnitude, in
the face of significantly rising oil prices, could
potentially have an impact on the overall bal-
ance of trade for the government as well.
Given the benefits like increased tyre Mileage
and Fuel saving over the Tube type radial tyres,
Indian customers are quickly switching towards
Tubeless tyres especially in Bus segments. This
trend will continue and we see great opportu-
nity in driving the radial transformation story in
India. However, there are few barriers like road
infrastructure, lack of knowledge about benefits
of radial tyres that hinder growth of radialisation
in India.
ITP: Cheaper Chi-
nese tyre imports
flood India’s mar-
ket. How to deal
with these new
competitors?
What Michelin
has more to of-
fer?
We believe that a vast market like India offers
a level playing field for all major companies
providing equal opportunities for all to grow.
We are in India with our long term strategy and
are confident that our product offerings are
the best balance between safety, longevity and
fuel savings for the customers in India. Michelin
has built its leadership on innovation for over
125 years. In India, with a comprehensive radial
“Michelin, the pioneer of
radial technology, believes
that radialisation in the In-
dian CV segment will touch
50 percent by 2020.”
channels like Michelin Truck service Center
(MTSC) and post sales services like Recamic
- retreading complement and
differentiate our product offer.
Michelin’s one stop truck ser-
vice centre, MTSC’s are com-
mitted to provide customers
with quality and comfortable
environment for comprehen-
sive range of professional technical services to
improve operational efficiency, such as lesser
downtime for tyre maintenance, lower vehicle’s
operating costs, improved operational control
and efficiency, high quality Michelin products
and clear product pricing.
Michelins retreading centres (Recamic) provide
quality retreading solutions for all kind of truck
and bus tyres, helping reduce operational costs
of fleet owners by improving on multiple lives
of the casings. Designed and certified to of-
fer retreads for all casings, our state-of-the-art
plants offer the Michelin group brand Recamic
tread for use on all Michelin casings.ture, lack
of knowledge about benefits of radial tyres that
hinder growth of radialisation in India.
the casings.
ITP: Several types of radial tyres coexist in
the Indian market. How different are they?
Should Indian fleet owners particularly focus
on one type?
India is still largely a bias
tyre market, with radialisa-
tion growing at a steady
pace. With most OEMs now
offering new vehicles with
radial tyres, we see the pro-
cess of radialisation further
speed up in the coming year. Tubeless radial
tyres score higher in fuel saving, safety and tyre
mileage, leading to reduction in operating cost
of the fleet. A tyre being a major component
of a fleet’s operating cost, Indian fleet owners
should carefully select tyres based on their op-
eration and road conditions.
ITP: Can you explain more about drop cen-
ter’s interest on trucks tyres?
The Indian truck Industry has seen a tremen-
dous technological progress in the last decade
in terms of vehicle geometry. The technological
update on tyres especially on drop center (tube-
less) was slower than expected. This is mainly
ue to lack of knowledge on benefits of tubeless
tyres, inconsistent growth of the commercial
vehicle market and lack of proper service infra-
structure for these tyres.

has expanded from approximately 4.2 million
km in 2007-08 to 4.8 million km in 2011-12, at
a CAGR of 3.4% only. Rural areas are lagging
behind in accessibility to roads whereas urban
roads are more congested with only 1.27 Km. of
road per 1000 persons. The availability of good
road infrastructure, poor maintenance of road
and vehicle condition are
responsible for higher rate of
removal of tyres due external
damage, loss of potential
fuel saving and reduction in
recapping capability. These
three item causing huge loss
to the customer and country
2007-08 to 4.8 million km in
2011-12, at a CAGR of 3.4%
only. Rural areas are lagging
behind in accessibility to roads whereas urban
roads are more congested with only 1.27 Km. of
road per 1000 persons. The availability of good
road infrastructure, poor maintenance of road
and vehicle condition are responsible for higher
rate of removal of tyres due external damage,
loss of potential fuel saving and reduction in
recapping capability. These three item causing
huge loss to the customer and country
ITP: We spoke with you in 2012 about radiali-
ITP: According to you, what are the main
challenges for India’s road transport? Which
challenges concern particularly the tyre mar-
ket?
A country’s development is strongly
linked to its infrastructure strength and ability
to expand trade, cope with population growth,
reduce poverty and pro-
duce inclusive growth.
Lack of high quality in-
frastructure has been an
impediment in India’s
economic growth. India’s
road infrastructure carries
60% of freight and 87% of
passenger traffic.
There has been a
staggering increase in the number of motorized
vehicles, but the expansion in the road network
has not been commensurate with this increase.
With growing population there is a need to
provide matching transport infrastructure to
avoid overcrowding, overloading and poor
maintenance of the available infrastructure.
While the motor vehicle population has grown
from 105 million in 2007-08 to over 159 million
in 2011-12 with CAGR of 11% the road network
has constantly endeavored to offer products
that help fleet owners maximize their return on
investments. One such endeavour was our in-
troduction of the drop center (tubeless) tyres for
commercial vehicles in India which have been
well assimilated by the Indian truck owners. We
expect a formidable growth in tubeless tyres
for trucks and buses in the coming years from
Indian market.
Interview with Apollo tyres
Comparison between Radial and Bias tyres by Michelin
http://www.michelinag.com/Innovating/Radial-vs.-Bias-technology

sation in the TBR market. How did the situa-
tion evolved since?
Even though India has achieved over 95%
radialisation in the passenger car segment, the
country remains largely a cross-ply market be-
cause radial penetrations in commercial vehicle
segment, which accounts for 65% (by weight) of
the market, is only slowly gaining pace, which
is now around
30 to 35%. If you
look at the pat-
tern of radicaliza-
tion in all radi-
alised countries
you may observe
that it is followed
the path of an
S-shaped curve.
Initially the con-
version rate is very slow till it reaches 9 to 15%
and then it moves very faster rate till it reaches
80 to 90%. But in the case of Indian market it is
observed that the slope of the curve is low after
reaching the inflection point in spite of the fact
that enough manufacturing capacity is available
in the country to feed the market. This may be
due to following reasons:
- Cash availability
- Poor road and vehicle condition
- Frugal vehicle design, especially suspension
system
- Overloading condition
- User Education
- After sales service
- Repair and Retread Infrastructure.
- Poor inflation maintenance
ITP: How the transportation sector could
gain from radialisa-
tion (performances
on fuel savings, car-
bon emission, road
safety etc.)?
Transport sector would
have benefited im-
mensely due to radiali-
sation as is witnessed
in developed countries
by its higher mileage, better fuel efficiency, less
punctures, and good speed capability when
compared to a similar cross ply tyre. However
to get the optimum performance from the
comparatively expensive tyre, road infrastruc-
ture, vehicle suspension system and facilities to
provide the service of repair and retread should
also have to simultaneously evolve to the de-
sired level.
ITP. How Apollo Tyres is different from com-
petitors? (domestic, international, Chinese
brands…)
Apollo tyres is one company in India who is work-
ing very closely with the customer to provide
solution for 360°operation.Even though we have
entered into the truck radial market very late
but we have gained
the confidence of the
customer by provid-
ing tyres with high
mileage and superior
casing for repeated
retreading. These are
the major require-
ment of Indian radial
customers.
It is our endeavor to continuously educate the
customer to get best out of tyres and also to
help them to provide proper advice and facility
to repair and retread the tyres on time
ITP: Apollo Tyres has begin the construction
of a new facility in Hungary? What are your
goals in new countries in terms of innova-
tion/performances?
“Product Segmentation”best suited for the
service condition and“Application to Fit”to
realize optimal performance, been our success
“Radialpenetrationsincom-
mercial vehicle segment is
only slowly gaining pace,
which is now around 30 to
35%”.
Source: http://www.sanasecurities.com/stock-analysis/apollo-tyres
as a satellite CV RD center. RD center – Asia
with base at Chennai will continue to develop
the products in collaboration with the satellite
RD center in Europe, based at the Netherlands.
With the evolved retreading practice in Europe,
we are sure that our customers will appreciate
the multiple ser-
vice lives with
Apollo tyre’s su-
perior retreadabil-
ity and realize re-
markable benefit
in CPKM .

PART iv:
roads

INFRASTRUCTURE

Analysts say the momentum in the road sector is unparalled with the NDA govern-
ment going all out to reduce cost escalations that come with innumerable delays, to
get rid of the funding constraints and to provide the necessary impetus for its road
infrastructure projects.
India boasts of the second largest road network in the world—over four-and-a-half mil-
lion kilometres of road and still counting! Over the years, the connectivity has improved
so much that about 85 percent of the total passenger traffic and 60 percent of freight
movement is via road transport. India is poised for tremendous growth and clearly needs
robust infrastructure to help realize its immense potential. Analysts say that by 2019, the
Indian road industry will be worth around USD19.2 billion.
Modi’s government is zealously trying to revive the ailing road sector and get several
stalled projects going. In September 2014, Nitin Gadkari, Minister for Road Transport
and Highways, said,“In two years’time, the Road Transport and Highways Sector will
undergo revolutionary changes. Transport and Shipping sectors will contribute to at
least 2 percent increase in the country’s GDP in two years span.” While addressing the
media last year after completing 100 days in office, Gadkari said,“We inherited a legacy
where 189 projects worth Rs 1.5 lakh crore were stuck on account of regulatory hurdles
including environment and forest clearances, most of which have been removed and
are rolled out.”According to Gadkari, only 12 km of road are constructed every day as of
now; however, National Highway Infrastructure Development Corporation Limited has
set a target of 30 km per day within two years. The cash-strapped sector has the Centre
scurrying high and low for funds. Early this year, Gadkari said,“In five years, there will be
investment of Rs 5 lakh crore.”Gadkari intends to build cement roads instead of bitumen
as they are cheaper to construct and maintain over times.
will the gadkari-LED ROAD
MINISTRY LIVE UP TO ITS
PROMISES?
Road Transport Challenges 2015 36

“According to Gadkari, only 12
kms of road are built everyday
as of now“
The Public Private Partnership (PPP) model has
failed to work in the road sector recently. The
government will now lower interest rates and
use other policy instruments to attract private
investors—in the last two years, 20 projects
worth about INR27,000 crore (USD4.2 billion)
found no takers. Until the economy improves,
the government will award most projects via
the Engineering, Procure-
ment and Construction
(EPC) route. The road min-
istry has decided to allow
private developers‘to take
out their entire equity from
a project after two years of
start of toll collection.’This
move is expected to re-
vive private interest in the
sector and‘unlock at least
Rs 4,800 crore of private
equity stuck at present
in approximately 80 PPP
(private-public partnership)
highway projects.’A source from the road min-
istry said,“We are not getting private players to
bid for PPP projects since they don’t have equity
to raise loan from banks and financial institu-
tions. With around Rs 5,000 crore of equity back
in circulation we are confident of rolling out
more PPP projects during this financial year.”
Officials say that 80 projects out of the 115
awarded via the PPP route can take advantage
of this decision. A government official added:
“PM has observed that while allowing the devel-
opers to avail this scheme, ministry should keep
track of how this equity is being utilized by the
developers. The ministry will need to have some
mechanism to see that the equity is ploughed
back to the road projects.”The Centre will infuse
funds equaling INR16 crore (USD2.5 million) for
half-complete projects
that were stuck as banks
refused to give loans to
private players whose
coffers ran dry.“Banks
are not providing fund
for these stuck proj-
ects and they should
not object to this new
scheme since no prog-
ress would force NHAI
to terminate contracts.
In that case, the projects
would become NPA and
lenders would get the
maximum hit,» said sources in the ministry. This
move could also encourage foreign investors to
compete for a piece of the pie.
A government official said,“Foreign investors are
not coming as they don’t want to risk of delay in
construction, which impacts their investment re-
covery. But when completed projects will be on
the offer we will see overseas investors vying for
these projects. There is no risk of cash flow since
tolling has been on for over two years.”
The“hybrid”model (a mix of the EPC and BOT
models) is expected to breathe life into the road
infrastructure sector.
In this
model, the
develop-
ers will not
have to
tie up 100
percent of
their investment (a mix of debt and equity) in
the highway projects and NHAI’s initial capital
inflow will also be lesser. Highway Ministry Sec-
retary Vijay Chibber, said,“Under the new hybrid
annuity model, not only will the NHAI support
40% of the project cost in five equal instalments,
the government will also bear the revenue risk
in projects with a low anticipation of traffic
flow.”Thirteen new projects worth INR14,422
crore (USD2.25 billion) are likely to be awarded
under the hybrid model. Under this model, the
government will have to acquire all requisite
environmental clearances and 90 percent of the
land prior to awarding projects.
We might probably see a Public Contracts
(Resolution of Disputes) Bill in the next fiscal.
“If the dispute resolution process is expedited
and frees up the stuck capital under arbitration
claims, the liquidity position of some develop-
ers could improve significantly. There has been
demand for setting up a regulator for the sector
for resolution of disputes between contractor or
developer and NHAI, as they feel that the pres-
ent dispute redressal method is time consuming
and costly thus inefficient, the introduction of
this Bill could address
their concern,”said
Rohit Inamdar, ICRA’s
SVP. NHAI’s inde-
pendent settlement
advisory committee
(ISAC) will look to
resolve road projects worth nearly INR26,000
crore (USD4.1 billion) caught in disputes.
This May Gadkari said,“A total of Rs 15,000 crore
of roads projects will be awarded by the end of
this year. Of this, Rs 6,000 crore of roads projects
would be developed in Arunachal Pradesh and
Rs 2,000 crore worth of projects each in Megha-
laya and Nagaland. The remaining projects
would be spread across other states.”He added:
“We have designed a new policy for develop-
ing roads projects in the Northeast. If the state
government takes care of land acquisition and
environment and forest clearances, the central
government will build state highways at its own
cost.” The minister said the new highways will
encourage local contractors and generate op-
portunities for employment that would come
with the infrastructure projects and industries
that crop up due to improved connectivity.

One of India’s biggest problems regarding transport is the congestion that millions of
commuters face each day on the roads. Delhi is one of the fastest growing capital cities
in the world but is in the Top 10 list of cities with the worst traffic jams, according to IBM’s
global Commuter Pain study in 2013.
Causes of traffic congestion include factors such as the country’s public transport infra-
structure, which is failing to keep up with the rapidly growing developments in the cities
that require people to travel in and out on a daily basis. There is an estimated one lakh of
vehicles travelling on Delhi roads per day; this includes mixed traffic such as cars, trucks,
two-wheelers, animal driven carts and pedestrians. All this has not only led to obvious de-
lays and jams, but a high rate of accidents and fatalities throughout the country as well as
increased air and noise pollution.
As it stands, India does not have a formal national road safety policy. Since it began in 1988,
the National Road Safety Council (NSRC) has tried to formulate this but is yet to succeed.
Road safety policies were again attempted in 2003 by the Ministry of Highways and Trans-
port and in 2004 at the Annual Session of Indian Roads Congress, the ministry introduced
11 elements for road safety policies under the title‘Safer Roads for Everyone’. These dealt
with the overall framework for road safety, components of the road traffic system and sup-
port for road safety for example safety education and enforcement.
There are a number of initiatives that have already been set up in different parts of the
country to relieve the problem of congestion. The Intelligent Transport System (ITS) and
Delhi Integrated Multi-Modal Transit System Ltd. (DIMTS) are working to provide safe and
accessible public transport for commuters in India. The Intelligent Transport System has re-
cently been introduced in Delhi and has provided solutions for certain transport problems
through the use of computer and communications technologies.
Possible solutions to relieve
traffic congetions on indian
roads
The minister said the new highways will encour-
age local contractors and generate opportuni-
ties for employment that would come with the
infrastructure projects and industries that crop
up due to improved connectivity. Gadkari said,
“The cost of road construction in the North-east
is four times that in other parts of the country.
Most projects are being developed by con-
tractors who do not belong to these states. To
ensure local participation, we have decided to
identify small projects of up to Rs 50 crore and
we will pay in advance 20 per cent of the cost so
that local youth can become involved in devel-
opmental works.”
Improving rural connectivity is a key focus area
for the NDA government.“Asian Development
Bank is providing about $2 billion loans through
its three long-term investment programmes to
build and improve rural roads in five states of
Chhattisgarh, Madhya Pradesh, West Bengal,
Odisha and Assam,”said Teresa Kho, ADB’s Coun-
try Director for India. The support is expected
to help construct 31,000 km of rural roads in
these states. The road ministry is also planning
10 new projects in Karnataka—that is, about
1,572 km—by the end of this year. Three high-
way widening projects (PPP route) worth more
than INR5,500 crore (USD860 million) have been
given the green signal by the Union Cabinet
for Uttar Pradesh, Maharashtra and Haryana. In
an interview with NDTV in April 2015, Gadkari
said 40 projects that were identified as unvi-
able have been terminated. About 26 projects
need government intervention as the minis-
try has been unable spur their execution. He
added that projects worth over INR1,40,000
crore (USD21.9 billion) have got clearance. The
new Motor Vehicles Act will ensure better road
safety, a matter of grave concern in India. Will
Gadkari’s ambitious plans of achieving in five
years what the previous government had not in
25 years bear fruit?

“Delhi’s Master Plan 2021 is set
to encourage 80% of commuter
to use public transport by 2020”
Some examples include advanced traffic man-
agement systems, wireless traffic signal control-
lers, CCTV junction surveillance, electronic toll
collection systems, advanced vehicle control
systems and video incident detection.
Construction has recently begun on a $50 bil-
lion highway program that is set to improve
up to 40,000kms of Indian highways. However,
these will not be effective until completion, as
they have seen to increase the amount of traffic
fatalities due to poor road conditions in some
areas during construction.
The Working Group on Urban Transport is also
working on mea-
sures to manage
congestion. The
lack of urban
planning and inef-
ficiency to imple-
ment regulations
has led them to
suggest the creation of a completely new infra-
structure that will include traffic signals, more
lanes and the introduction of one-way streets.
They have also begun to promote the use of
public transport. Metro rail is already present in
cities such as New Delhi and Bangalore.
he Jawaharlal Nehru National Urban Renewal
Mission (JnNURM) city-modernisation scheme
was launched in December 2005. This is a seven-
year plan with a total investment of $20 billion
that will upgrade the social and economic struc-
ture in cities. Part of JnNURM is to redevelop the
inner cities to reduce congestion.
Other solutions that have already been intro-
duced include:
- The completion of the Delhi Metro system that
will provide access from the capital to cities
such as Gurgagon, Noida and Ghaziabad. Phase
3 is set for completion between May 2015 and
December 2016.
- This month saw the introduction by the Delhi
Transport Corporation (DTC) of more than 3,500
buses on the roads, including corporate sector
buses.
- The on-go-
ing construc-
tion of new
roads in the
country, in-
cluding the
widening of
existing road
networks, flyovers and footbridges for pedes-
trians. The Asian Development Bank last month
lent $2 billion for road construction in five states
that will improve rural connectivity.
- The construction of ring road bypasses in some
areas that will allow a signal-free flow of traffic.
India’s rapidly growing population has called for
the government to introduce policies regarding
the development of urban infrastructure. Delhi’s
Master Plan 2021 is set to encourage up to 80
per cent of commuters to use public transport
by 2020. It has been estimated that by 2021,
there will be a demand for transport by 27.9
million pas-
sengers in
comparison
with 13.9
million in
2001.
The Gov-
ernment
have also
explored fur-
ther possi-
bilities to reduce congestion and lower accident
rates such as promoting traffic safety through
education in schools, the strict enforcement of
traffic regulations, designing separate roads or
lanes for vehicles of different sizes and weights,
improving and updating India’s public transport
system.
When it comes to policies and regulations, the
Government are due to take a‘zero tolerance’
approach to rule breakers. Already, the law has
been amended to make wearing a helmet on
two-wheelers compulsory, and the outcome
has worked well thus far. In terms of congestion
within the cities, the Government are exploring
the introduction of a strict parking policy and
an increase in parking charges that matches the
greater demand.
There is also an increased need for separate
lanes for different vehicles, particularly in Delhi
where land availability for transport is less. A PIL
has recently
been filed
in Gurgaon
that asks for
an encroach-
ment-free lane
for cyclists in
the city.
Whether or
not such mea-
sures taken will
be effective depends on the Government, road
users and suitable enforcement of the law. Cur-
rently, India still faces major problems regard-
ing traffic congestion and how to combat their
need for a more sustainable infrastructure to
suit the rapidly growing population.

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Road transport challenges India

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