The Narendra Modi government’s Rs 7 lakh crore Bharatmala highway-building programme is expected to give a big boost to the real estate sector besides raising demand for steel and cement and creating large-scale blue-collar jobs in the construction industry. The manufacturing and tourism industry too will benefit from faster flow of goods and passengers projected from implementation of the project.
However, the government will have to ensure that possible delays are avoided and the project is completed on time if intended benefits are to be reaped. The experience gained from the construction of Golden Quadrilateral earlier might come in handy for the government. The project that began in 2001 was delayed by some eight years. It was to be completed by the end of 2003 but its implementation extended till January 2012.
To complete the project, 128 separate contracts were awarded. In total, 23 per cent of the work was completed by the end of 2002, 80 per cent by the end of 2004, 95 per cent by the end of 2006, and 98 per cent by the end of 2010, according to a study undertaken by Harvard University. The delay is attributed to issues in key areas of project implementation like land acquisition, financial closure and award of contracts.
The implementing agencies will have the benefits of learning from the Golden Quadrilateral project. The similar hurdles can be well anticipated in advance and necessary measures can be taken to avoid the time lag.
Development of highways creates possibility for manufacturing hubs, townships and commercial centres in the vicinity. Land value automatically shoots up on expectations of increased real estate activity. The Yamuna expressway is a classic example of how highway development yields spin-offs for the real estate industry benefits. The expressway has reduced travel time between New Delhi and Agra by half. Besides, it has spurred construction and industrial activity in surrounding areas. In coming days, it is expected to have a significant impact on economic activities of neighbouring states of Rajasthan, Haryana and MP as well.
Encouraged by economic boom in the region, the Centre has announced plan to build an international airport in Jewar along the expressway, the second in the Delhi and NCR region, which should further give a big boost to warehousing development in the region. In other words, the airport might well prove an inflexion point for Noida and its extended surroundings and ignite revival of home sales, creating a virtuous cycle of real estate and infrastructure development. Property prices will automatically go up. All these due to the direct result of Yamuna expressway development.
The Golden Quadrilateral improved connectivity and market accessibility of districts lying close to the highway, compared to those more remote. Non-nodal districts located within 10 km from the network experienced substantial increases in productivity, attracting more firms, according to the Harvard University report titled, “Highway to Success: The Impact of the Golden Quadrilateral Project for the Location and Performance of Indian Manufacturing”.
Surat in Gujarat and Srikakulam in Andhra Pradesh, that lie on the GQ highway saw more than 100 per cent increase in number of firms after GQ upgrades, the report said.
Significantly, just 5,846 km of highways was built under the GQ project, compared with construction of over 83,000 km envisaged in the Bharatmala programme. So, both challenges and benefits would be commensurately bigger. We expect it to give a much-needed boost to economic and industrial growth, and in particular the real estate industry as well.
(The writer is CMD of REPL)