M A I N   N E W S

High-speed travel on NH-1 still a distant dream
Irregular supply of raw material, financial crunch, delayed clearances key hurdles
Ruchika M Khanna
Tribune News Service

Incomplete work on the National Highway No. 1 near Karnal. Tribune photo: Vinay Malik

Chandigarh, November 8
When the proposal to six-lane the highly congested stretch of the National Highway No. 1 between Panipat and Jalandhar was cleared in May 2008, it raised hopes of high speed road travel between the country’s Capital and the vital cities in Haryana and Punjab. But more than three years down the line, the dream of a high speed highway seems nowhere close to reality, with work on the project moving at a snail’s pace. Milestones for progress have been continuously missed. Commuters travelling on these roads face delays in travel as majority of flyovers remain incomplete, and they are repeatedly driven off the highway onto diversions where work on main carriageway is underway.

The stretch of NH1 from Panipat to Jalandhar which is being upgraded from four lane to six lane Map not to scale

Enquiries made by The Tribune reveal that the irregular supply of construction raw material and the financial crunch faced by the contractor appointed by the concessionaire given contract for the six-laning work of the highway, has led to a slowdown in construction. The delay in getting clearances from various state and Central Government departments has also resulted in the project being nowhere near completion.

The six-laning of this 291.1-km stretch of the highway (between Panipat and Jalandhar) was to be completed by the end of this month. The deadline for the completion of work is round the corner, but the work is far from over. Instead of a smooth six-lane highway that should have been a driver’s delight, what the commuter still gets is a slippery ride on the potholed road, made worse by sand slipping on the main carriageway from the mountains of sand and gravel heaped all along the central verges of the highway.

The project for expansion of this highway (from four-lane to six-lane) was awarded to a concessionaire called Somar Isolux in May 2008, on a design, finance, build operate and transfer (DFBOT) basis. Soma Isolux is actually a joint venture firm formed by Isolux Corbium (having 61 per cent stake) and Soma Enterprise Limited (39 per cent share). The total cost of the project was estimated at Rs 4,500 crore. Soma Isolux was supposed to finance the project cost through equity capital of its promoters and finance from a consortium of banks. Besides, the concessionaire was allowed to collect toll tax from those using the highway, with a part of the toll tax being given to the NHAI.

A view of the incomplete work on the National Highway No 1 near Shahbad. Tribune photo: Vinay Malik

Though the agreement with this JV was signed by the National Highway Authority of India (NHAI), the construction of the highway began only in May 2009. The NHAI had set three milestones for the concessionaire. While 25 per cent of the work was to be completed in the first year itself (by May 2010), 65 per cent of the work should have been completed by May 2011, and the project was to be completed by November 2011. Till date, the company has not been able to meet any of these timelines set by the NHAI for the completion of the project.

Even now, when the deadline for the completion of the project is round the corner, construction of most of the structures (bridges, passenger underpasses and vehicular underpasses) and a portion of service roads is yet to be completed.

The main carriageway is also not ready and has been completed only in bits and pieces. According to its own admission, Soma Isolux - the concessionaire which was awarded the project - informed The Tribune that of the 176 structures, only 27 were complete and open for traffic. “The six-laning work has been completed on 165 km of the main carriageway (of a total of 291.1 km). However, we have completed work on 70 per cent of the service roads, which are now being used as diversions, wherever construction on the main carriageway is on,” said Pramod Kumar, general manager, Soma Isolux.

NHAI officials admitted that some delay in the project was on their part, as they could not hand over the right of way (ROW) cleared from trees, for converting the four-lane highway into a six-lane highway, to the concessionaire on time. “There was an eight-month delay on our part in handing over the ROW to the concessionaire because we could not get timely clearance from the Ministry of Environment and Forests, for felling trees. At some places, land acquisition for creating additional two lanes caused delay. An agitation in Khanna (Ludhiana district), earlier this year, also caused some delay,” said a top NHAI official.

However, The Tribune has reliably learnt that the contractor appointed by the concessionaire, Soma Enterprises, has been facing a cash crunch. It is learnt that the company owed several hundreds of crores to its suppliers of raw material. As a result, these suppliers had stopped supplying raw material to Soma, for some time. It was only after a part of the payment was released to these suppliers that they again started supplying raw material to the concessionaire.

“Every contractor faces some liquidity crunch at one point or another. This is a huge project, with an estimated cost of Rs 4,500 crore. The contractor might have had some problems, but now there is no problem in supply of raw material,” said Kumar.

Over the period of time, prices of sand, gravel and bitumen have hit the roof. This has led to a sharp rise in the cost of construction. It’s not just the high cost, but also the inadequate availability of sand and gravel that is affecting the project’s completion.

Mining of sand and gravel has been banned in Haryana for almost a year, following a court order. And in Punjab, the total minor minerals (sand and gravel) that can be mined from the state’s riverbeds in a year is much less than the total requirement of the concessionaire for the project. “As a result, we are dependent on whatever sand and gravel we can buy from neighbouring states of Uttar Pradesh and Himachal Pradesh. Since a lot of infrastructure development is also on in these states, minor minerals that can be procured from there are also quite less than the actual requirement,” said Kumar.

The construction work of the highway has been assigned to Soma Isolux on design, build, finance, operate and transfer basis. This means that the concessionaire can collect toll on a sharing basis with the NHAI, so as to fund the project cost. As part of this agreement, the concessionaire was allowed to give 20.14 per cent of the total toll it collected to NHAI in the first year. The NHAI’s share in this toll collection goes up by one per cent each year, till the end of the concession period for the highway in May 2023.

As part of this agreement, the company has set up three toll plazas along the entire 291.1-km stretch between Panipat and Jalandhar. These plazas are located at Karnal, Shambhu (Patiala) and Laddowal (Ludhiana). However, the concessionaire has been claiming that because of many commuters slipping away, off the highway near these plazas to avoid paying tax, the total tax collections are not along the expected lines. The concessionaire is able to rake in an average of Rs 21 crore per month as toll, as against an estimate of Rs 40 crore a month.

In order to plug in this revenue loss in toll collection, the NHAI has now agreed to help the concessionaire by relocating these toll plazas.

THE PROJECT The project to six-lane the 291.1-km stretch of the National Highway No. 1 between Panipat and Jalandhar was cleared in May 2008 at an estimated cost of Rs 4,500 crore.