HIGHWAYS DEPARTMENT

DRAFT ROAD POLICY

Sustained growth of economy depends on adequate availability of basic infrastructure. An efficient road network is essential for cost-effective movement of men and materials without which trade and industry cannot maintain a competitive edge. Tamil Nadu is served by air, rail and road transport. The state has an extensive road network in terms of spread and connectivity providing inter links between urban centers, agricultural markets and rural habitations in the countryside.

During the successive Five Year Plans the investment in road infrastructure has been increasing progressively in the state, and the achievements have been impressive. Even though significant stride in the development of road network has been made, there is an imperative need to evolve a practical and updated policy for road development, keeping in view the advances in technology, the requirements of the construction industry and the growing aspirations of the community.

The total length of roads in Tamil Nadu, category wise, is as follows.

 The widthwise details of government roads are given in table below:

Recently government have issued orders in G.O.Ms.No. 140, Highways (HN2) Department, dated 14-8-2001 upgrading 2817  kms of MDR and 151 Kms  of ODR, totaling 2968 Kms into SH roads. A proposal to reclassify 1200 kms of SH into NH is under consideration with GOI. This policy document is confined to government roads maintained by Highways Department. Village roads falling within the purview of local bodies such as Panchayats, Municipalities and Corporations are not covered in this policy.

2. NEED FOR A NEW ROAD POLICY

Road transport is a vital infrastructure for economic and social development of the country. Among various modes, road transport has come to occupy a dominant position in the transportation system. Factors that contributed are flexibility, door-to-door service, reliability, speed and accessibility. Most of the roads require widening and strengthening in order to accommodate the increased volume of traffic.

The need for a comprehensive road policy has been accentuated due to the following developments taking place in the state:

1

 The massive programme of upgradation of NH roads under NHDP has commenced in right earnest. A total length of 1561 kms is being four laned under the Golden Quadrilateral and North-South Corridors project in the State. This requires skill up-gradation among state engineers. The New Policy addresses the issues of modernization, effective project management and skill development.

Though there is well-developed road network in Tamil Nadu, more than 80 % of the roads are single lane. The bad condition of roads and poor service levels need to be improved. A comprehensive programme for upgradation of single lane to double lane configuration is under consideration.

 Support mechanism to the private sector in the form of concessions and incentives as part of the road policy would help to attract private funds for road construction. A policy outline for private sector participation should form a part of the road policy.

Over the years considerable backlog for maintenance of roads has accumulated due to paucity of funds. A policy for maintenance of roads supported with effective method of financing maintenance activities must be evolved.

 The World Bank assisted Tamil Nadu Road Sector project aims at upgradation of nearly 750 kms of single lane to double lane road, construction of 13 bypasses, maintenance of 2600 kms of roads and Institutional capability. This requires restructuring the department; hence the need for a new road policy.

All development policies aim at economic growth and social uplift, maintaining balanced and even distribution of benefits. The road policy of Tamil Nadu aims at providing an efficient road network with emphasis on upgradation of technology and cost effectiveness. The road policy should meet the requirements of all stakeholders and faster development of various transport modes in a manner that will lead to the realisation of an efficient, sustainable, safe and regionally balanced transportation system having proper inter-modal mix. The focus of the new road policy should concentrate in enhancing both the coverage and quality of road network in the state. 

The new road policy will cover all aspects of road design, construction, maintenance and management of highway resources. It will include Engineering, Economic, Environmental and Social Impacts due to Land Acquisition, Resettlement and Rehabilitation of Project Affected Persons (PAPs), Tree Planting, provision of Wayside amenities, construction of Bus bays and Truck terminals, Road Safety, Training, Research and Development. It will also focus on Institutional Strengthening of the Department, and capacity building among Engineers, Consultants and Contractors.  

a.      To adopt a coordinated approach to road development so as to promote a sustainable road and transportation network.

b.    To mobilise market resources along with increased generation of internal resources for joint development of road projects (Construction /   Maintenance) with private participation;

c.       To achieve capacity augmentation and productivity improvements through technology upgradation.

d.       To enhance quality of road network with a view to reduce the transportation, Vehicle Operating Costs (VOC) and maintenance costs

e.      To achieve professional management of highways assets and resources;

f.        To ensure road safety and to check ribbon development;

g.      To mitigate environmental impacts and provide safeguards

h.       To provide Resettlement and Rehabilitation of PAPs;

i.        To adopt innovative and improved methods of road construction and maintenance,   

j.       To provide quicker access to essential services, thereby improving the quality of life in rural areas.

For achieving the above stated objectives it is necessary to strengthen the Institutional capability of the Department.  For this purpose an Institutional Development Strategy has been prepared, for the World Bank assisted Tamil Nadu Road Sector Project (TNRSP), in consultation with officers of the Department.

As part of the project, a five-month study by an International Consultant (M/s Booz Allen & Hamilton) was carried out to assess and identify the Institutional Strengths and weaknesses in the Department. The study reviewed the focus and organizational capacity of the main highway institutions. The objective of this review is to establish a strategy to achieve sustainable improvement to the State’s organizational framework and financing capacity as well as efficient management of the State Highways Network. It covers five focus areas, viz. Organization, Financial Mechanism, Core Process, Information Technology, and Regulatory Context. The IDS study is the first phase of a two-phase effort to improve the institutional and financial capacities of the Department. The second phase of the IDS effort would involve implementation of the proposed strategy.  

a. Organization and Management

In an effort to increase the quality of output and the functional efficiency of the Highways Department, modernization and capacity building efforts are being undertaken as part of the ongoing Project (TNRSP). Based on the recently concluded study, initiatives have been taken to restructure the organization to avoid mixed functions, improve manpower skills with decentralization of powers to impart efficiency. The Steering Committee formed by the Government has accepted the recommendations. The government have accorded in-principle approval to the IDS strategy. Task forces have been setup for all the five focus areas for implementing the strategy. A post of Special Secretary in the grade of Chief Engineer has been created in the Secretariat.   

The restructured organization will have a well-defined planning unit in the Head Quarters to set objectives, policies and standards and a number of Corporations, which will be independently responsible for the project execution. The major recommendations of the study report include: 

·        An Autonomous body/ department will be in place by 2005 to develop state level policy and standards.

·        The restructured organization will be strengthened so as to have a modern and efficient organization by 2005.

·        In 2005 the department will have a number of Road Management Corporations, which will be responsible for works execution.

   (Rs.in Lakhs)  

Based on the recommendations of the Confederation of Indian Industries Tamil Nadu Task Force on Roads (March 1999) and Institutional Development Study (IDS), the Government constituted a committee to explore the possibility of setting up a Road Fund for the State. The committee in close co-ordination with Tamil Nadu Road Development Company (TNRDC) prepared a detailed Approach Note outlining the structure, source of funds, allocation pattern and management structure for operating the Fund. An autonomous Board will manage the fund professionally. This will be an added source of funding for maintenance purposes along with budgetary support. While 70 % of the funds would be deployed towards maintaining roads under the control of Government, Panchayats and Municipalities, 20% would be used for leveraging funds from private sector and the remainingr 10% would be used for project development, capacity building, and road safety.  The sources of the fund will include merger of existing TN Rural Road Fund, transfer of Central Road Fund to the state, fuel cess and levy on petro-products, sale tax on vehicles, special levy on spares and contribution by Insurance Companies.

After careful consideration of the Approach Note, the Government announced the setting up of Tamil Nadu Road Fund on the floor of the Assembly in March 2000. The draft legislation is under consideration of Government in Finance Department, in consultation with the Departments of Highways, Law, Transport and Industries.

In addition to setting up of Road Fund the government could also explore other innovative forms of revenue generation. Some of these are:

1. Provide ducts in the median / on the edge of ROW which can be leased out to utility service providers, such as EB, Telephones, OFC, Water Supply and sewerage pipes etc. The lease rent can be used for maintenance of roads.  

2. Develop a shelf of projects on each category of roads (SH, MDR, ODR), which can be shared with investors on a cost plus basis. This document will contain essential engineering and environmental and geo-technical data useful for project development. Grant advertisements and hoarding rights along major highways and at important junctions.

3. Raise nurseries along Highways and supplying them to Forest, Panchayats and other Local Bodies.
4. Collect special cess from Industry for road development and maintenance Eg. IT corridor.
5. Impart training to Engineers, Contractors and Consultants by Institute for Highways Research and Management.
6. Strengthen R&D labs in Highways Research Station and carryout field tests on cost basis.
7. Use the Highways website commercially for on-line submission of tender documents.
8. Survey and Investigation can be done for other departments.
9. Develop commercial and industrial tourism along the road.   

Financial restructuring will be resorted to augment funds through Public-private partnership on the basis of BOT or annuity basis or deferred payment. Schedules giving necessary incentives to concessionaires and BOT operators and guidelines for private sector participation will be prepared. Arrangements will be made for obtaining loans from local lending Agencies, External Assistance from World Bank, Asian Development Bank, HUDCO, NABARD, etc. Special Purpose Vehicle and Joint –Venture participation will be encouraged. Efforts will be taken to obtain funds from CRF / GOI every year.

c. Core Process

Engineers will be trained in Quality Control, Project Management, and Geographical Information System. Pavement Management System and Bridge Management systems will be evolved and will be used for Operation and Maintenance and monitored continuously. Project Management system will be implemented to have better planning and monitoring of projects, Scheduling, Cash-flow and funds allocations and review of progress and applying corrective measures whenever necessary. Use of modern high- end mechanized construction equipments and plants will be utilized for major Projects.  Equipment Leasing Banks and Agencies will be encouraged. Road   Projects will be prioritized on the basis of their Internal Rate of Return (IRR) both in terms of economic viability (EIRR) and financial feasibility (FIRR).

1.       Savings in Vehicle Operating Cost (VOC)

2.       Faster, Comfortable journeys

3.       Reduced fuel consumption

4.       Benefits to trade especially in movement of perishable goods

5.       Reduced maintenance costs

6.       Safer travel

7.       All round development of area  

d. Information Technology

In tune with the technological advancement and with a view to establish a transparent administration, the department has created a web site www.tnrsp.com. Creation of a separate Website for Highways Department under the name

www.tnhighways.org is under process. It will be operational in the month of March 2002. As part of the effort to impart transparency in tender procedures, tender notices will be published on the website with effect from 1.3.2002.

e. Regulatory Context

It is observed that the incidence of encroachments on lands adjoining highways is increasing day by day. These encroachments affect the free flow of traffic, making road widening difficult and affecting the safety of both the pedestrians and passengers. The Legislative Assembly of Tamil Nadu has passed Highways Bill 2001, which regulates the ribbon development and empowers highway engineers to evict encroachments along ROW. The bill is awaiting the assent of President of India.  

In order to improve the effectiveness of the department in better regulation of ROW amendments are necessary to the Land Acquisition Act, Motor Vehicles Act, and other related Rules which impact on Highways department’s performance.  

In order to safeguard the environment and minimise the impacts, steps have been taken to include environmental issues in highway construction. Right from design to construction it will be ensured that Environment Impact Assessments (EIA) are carried out in all the major roads. Already, Environment Mitigation Plan (EMP) was prepared for the roads coming under the World Bank aided project. This will protect and enhance the environment in terms of natural resources such as land, water, air, flora and fauna. It will also mitigate hardship to workers at site, and minimise hazards due to toxic emissions and pollutants.  

To meet the social problems arising in major projects in assisting project affected persons, Government (G.O.Ms.No. 193 Dated: 10.8.98) have approved the Principles and Policy framework to cover Resettlement Action Plan (RAP) for project affected persons (PAPs). The policy is comparable to ADB and World Bank policies and emphasises the importance of a comprehensive, consultative and participatory approach. The policy framework outlines the approaches for minimizing / mitigating social and economic impacts on vulnerable people due to project execution. It covers categorization, assessment of social impacts and outlines comprehensive entitlement matrix for PAPs.  Government have also constituted two committees (at District and State levels) to monitor and  redress grievances under the R&R program of TNRSP.  The Resettlement and Rehabilitation policy evolved for the Tamil Nadu Road Sector project will be suitably adapted to cover all infrastructure projects, where displacement of families take place due to Land Acquisition.  

4.3 Road safety

Road Safety is an integral part of the New Road Policy.  The road statistics reveal high occurrence of accidents with casualty, which is mostly attributed to lack of concern for road safety.  Keeping this in view, the Govt. of Tamil Nadu has formulated a Road Safety Policy (2001).  The Policy outlines the 4 Es of Road Safety, viz. -Engineering, Enforcement, Emergency medical relief, and Education. An action plan has also been drawn up to reduce occurrence of  accidents, significantly.  As a pilot measure, the Transport Commissioner, together with support from Highways, Police and Medical Department has identified thirteen trauma care centers on NH 4 and NH 45. These centers will be setup at a distance of 50 - 60 Km from each other and will have ambulance, Police patrol, communication and wreck- removal facilities.  

As for National Highways, the Institute of Road Transport has carried out studies; based on this, proposal for Rs. 138 Million for improvements to accident-prone areas in National Highways has been finalized for implementation.

Sufficient allocation will be made to take up Road Safety measures from the fines and compounding fees collected for road traffic violation under Road Safety Fund. The World Bank has a provision of US $ 2.5 M through TN Road Sector Project for Road safety measures.

4.4 Tree   Plantation and Landscaping.

Tamil Nadu has over the years pioneered in planting of trees on the edges of the roads to maintain ecological balance and also generate income for the Government. In this regard, group plantation techniques have been developed to ensure proper supervision and high survival rates of trees. As part of the department’s concern for environment, trees would be planted along the roads at the edges of Right of Way. Different types of plantation will be resorted to in consultation with Forest Department. Avenue plantation in narrow stretches near habitations and cluster plantations in rural areas will be adopted. This will enhance environmental aesthetics providing a pleasant scenic view while driving. It will also act as road safety measure by indicating the edges of roads and prevent soil berm erosion.  

The practice of planting trees in one or more rows along the edges of the Right of Way on either side would create a defacto boundary along the roads thereby reducing encroachments and illegal access to roads. Embankments along the roads are proposed to be land-scaped to provide good driving comfort to road users.  

In terms of the New Road Policy, the private sector will be encouraged to sponsor tree plantation and maintenance programs along specified stretches. The Department proposes to involve local community /panchayat / youth clubs in planting and protection of plants along the State roads.  

It is virtually impossible to construct new roads to cope with the increasing traffic or user needs, especially when the resources are limited.  The fund normally made available is not even adequate to maintain the assets, created in the past. However, infrastructure development is essential to spur development.  The department has therefore taken steps to privatize the infrastructure development in the state by a process of Commercialization, Cost recovery and sustainability.

In order to give infrastructure development a boost, the GOI have announced major policy incentives. Road Sector has been declared as an industry to facilitate borrowing of funds on easy terms and floatation of bonds. This enables increased Direct Foreign Investment (DFI) and also permits the investor to claim income tax deductions on profits, which are reinvested in similar infrastructure projects. Infrastructure projects can be broadly classified into two types;

1.   Remunerative or viable projects,  and  2.   Non – Remunerative or Not entirely viable projects  

1.  Projects which are commercially viable would be offered on BOO / BOT / BOOT basis to the entrepreneur.

2. In projects, which are not commercially viable, Government would participate in the Special Purpose Vehicle (SPV) -on mutually agreed terms - based on merits of each case.  

There are many projects, which are non-remunerative in financial terms but are highly desirable in economic and social terms. Government cannot look at remunerative schemes only. Therefore the policy must take into account schemes, which are non-remunerative but justifiable on long-term economic and social considerations. The surplus earned on remunerative projects could be used to finance the deficits in the non-viable projects.

Generally infrastructure projects will be offered to the investor through open competitive bidding route. This is in terms of the Transparency of Tenders Act (1998), which ensures openness and transparency in the bidding process. However government will consider executing a Memorandum of Understanding (MoU) with other Governments / Investors in select mega projects (G2G) on a case-to-case basis. Government will propose amendments to relevant acts and rules to facilitate private sector participation in infrastructure.

Prioritisation of new roads for construction and maintenance of existing roads should be based on traffic considerations and economic viability. On selective basis maintenance operations of State Highways may be given to private contractors in order to secure the benefits of competitive price and quality. The upgradation contract must include a provision for maintenance for three years so as to ensure quality construction by the contractor. Another possibility is that the maintenance work could be geographically segmented where maintenance for each segment would be privatized. The State Government has demonstrated the viability of a novel framework of improving and maintaining existing road stretches through public-private partnership format. Eg. East Coast road (ECR)

The Government of Tamil Nadu can offer the following incentives to entrepreneurs for development of road / bridge projects on BOT basis, to ensure viability of projects.  

1.      Permit levy of tolls on roads and bypasses having tourist and traffic potential above 10,000 PCUs.

2.      Permit levy of tolls on bridges costing more than Re one crore.

3.   Exemption from payment of stamp duty and registration charges. 

4.   Sales Tax exemption on identified high quality plant and equipments.

5.   GoTN to provide capital support grant upto 33.33% of the project cost to enhance

      viability.

6.   Sanction quarry lease on priority basis in favour of the investors.

1.   To assist in land acquisition, for Right of Way. 

2.    Offer lands abutting the Highways to the investor for commercial development.  

3.      Grant advertisement rights along the Right of Way (ROW).  

4.      To help investor obtain statutory clearances, such as, from PCB, CRZ, MoEF etc.

5.      GoTN will assist in R&R of PAPs and involve NGOs in project development using community participation methods.

Toll roads are becoming an attractive proposition wherein private investment is used to construct, operate and maintain toll roads under concession arrangements.  In order to encourage private investment in commercially viable projects, the State Government have amended the Indian Tolls Act recently. This amendment enables private entrepreneurs to levy tolls on public highway assets, which was not permitted until then. This includes the mechanism of shadow tolling and annuity payment.  

There is need for more professional traffic forecasting and pricing of toll roads and bridges .The NHAI as fore runner in this regard has already enacted National Highway Act taking into consideration various assumptions and project elements.  Tolling is typically used for roads that carry heavy volumes of traffic, are in the vicinity of urban centers, and were average toll rates are affordable. These conditions are satisfied only in a small network of national and state highways. Thus, despite being a very attractive proposition, scope for use of toll roads as a major source of revenue is limited in TN.  

4.7 Role of NGOs

Infrastructure projects require large tracts of land for their locations. This would necessarily entail acquisition of lands from private landowners. It would also result in relocating several families. In order to win the support of affected families a progressive R&R policy framework is necessary. The NGOs who belong to the locality can act as an effective mediator between the department and the community. State level and District level grievance level committees will be setup to monitor timely release of compensation and rehabilitation measures to the PAPs in consultation with NGOs. They will also be involved in public consultations during Hearings so as to mainstream community viewpoints in design, execution and monitoring of R&R package.

A crucial activity for HRS could be undertaking random quality checks on behalf of the Department for the road works being implemented by various contractors in the State. This service could be extended to other projects in private sector and in the neighbouring States.

To stimulate R & D activities, a fixed percentage of about 1 % of total budget for road sector will be allocated for research needs, technology transfer and capability building programmes. The Highways Research Station will be equipped with State–of –the-Art instruments and research tools for continued research activities and monitoring of projects. A computerised data bank will be established to implement the construction and maintenance works in a planned manner.  

As part of the New Road Policy it is proposed to launch a Highway Development Programme – a comprehensive plan for upgradation and maintenance of all Highways department roads in the state. The programme will also address other key challenges such as road safety, environment and social impacts, and avenue plantation. It will be a five year phased programme. It will source funds from Road Fund, Private Sector, Domestic and External borrowings and Budgetary allocations.

a.   Approval of the New Road Policy, which will outline Government’s willingness to  entrust road projects to the private sector.

b.      Take decision in-principle on privatisation of roads, level of tolling, and manner of reimbursing the cost of development to the investor.

c.      Setup the TN Road Fund Board through a legislation to ensure maintenance of Government roads as per maintenance frequency.

d.      Announce a package of incentives for investors willing to participate in BOT projects.

e.      Formulate guidelines for private sector participation in road projects

g.   Develop an Action Plan to implement the policy.  

An elaborate disclosure procedure will be adopted before accepting this policy document in- principle. Views of the various stake holders such as representatives of Road Transport, Automobile Association, Bus Owners Association, Local Bodies, NGOs, Manufacturing and construction Industries, Officers from several departments etc. will be obtained. Thereafter, the State Government will incorporate the opinion of the stakeholders in the policy before finalisation.

The importance of roads to the economy cannot be over emphasized.  Roads form the lifeblood of a nation linking the four corners of the country with industrial towns, market centers, ports and habitations.  A good network of highways can transform a country from a developing to a developed nation status. Not withstanding the achievements made in the road sector, the quality of the road services needs to be improved with the expansion of the road network. This is the big challenge for the state. An integrated road policy covering various aspects of highway management including engineering, economics, environment and social impacts can address some of these issues. This is necessary to achieve maximum efficiency at optimum cost in a sustainable manner involving private participation so as ensure organizational improvement and public satisfaction. It is hoped that the road policy outlined in this paper will achieve the desired objectives.

VISION STATEMENT OF HIGHWAYS DEPARTMENT

“TO SERVE OUR CUSTOMERS, THE ROAD USERS OF TAMIL NADU BY PROVIDING HIGH QUALITY, COST EFFECTIVE, ENVIRONMENT--FRIENDLY ROAD NETWORK THAT IS RELIABLE AND SAFE, CONTRIBUTING TO SUSTAINABLE ECONOMIC DEVELOPMENT AND SOCIAL WELL-BEING OF THE STATE, BY APPLYING INNOVATION, BEST PRACTICES, APPROPRIATE TECHNOLOGY AND RESPONSIBLE MANAGEMENT OF INTERNAL AND EXTERNAL RESOURCES”.  

T.S. SRIDHAR,   

SECRETARY TO GOVERNMENT,  

HIGHWAYS  DEPARTMENT.  

The draft Road Policy under formulation and will be finalized shortly. We welcome your comments and suggestions which will enhance the quality and content of the policy. Your comments can be sent to the nodal officers at the following email addresses;

1. Secretary to Government, Highways Department, Tamil Nadu - hwaysec@sec.tn.gov.in

2. Nodal Officers, Highways Department, Tamil Nadu - nodal02@hotmail.com