Growth Highways

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SummaryHaryana CM makes the right call by proposing to buy the Delhi-Gurgaon highway.

Haryana chief minister Bhupinder Singh Hooda may or may not succeed in his plan to buy the Delhi-Gurgaon expressway and convert it into a toll-free one, but there are important lessons here for everyone, the National Highways Authority of India (NHAI) as well as state/city governments across the country. Buying out the expressway concessionaire, Delhi Gurgaon Super Connectivity Limited, will not only mean shelling out around R2,000 crore (ostensibly the figure the company is talking of), but also getting NHAI on board.

But it is Hooda’s reasoning that is worth looking at closely. If commuters were to get a smooth ride from Delhi to Gurgaon, instead of waiting two hours on the expressway toll plaza during particularly bad jams, he reckons the value of land in Gurgaon will shoot up—land prices for property 10 minutes away from Delhi, logically, will be a lot higher than for land which can be two hours away. When the metro yellow line between Qutub Minar and Huda City Centre came up in 2010, property prices in residential areas doubled within a year—a lot of this, it is true, could be attributed to other factors as well, but a significant proportion was clearly metro-driven. So, were Hooda to raise circle rates a bit, he may even recoup a large part of the money he pays for the expressway or even part of a metro line. And it’s not just the residents of Gurgaon he’s targeting. If traffic jams ensure industrialists looking to set up factories in the area give it a miss, that’s a huge loss of local taxes, of local employment opportunities and the general boost to the local economy. While NHAI should look at marketing its road projects to cities/state governments, the latter would do well to look at the payback of improving local infrastructure and connectivity.

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