Roads and money

Updated: Aug 3 2005, 05:30am hrs
The substantial underutilisation of funds released by the Union government for highway upgradation and maintenance by almost all states in the first quarter of this fiscal is, prima facie, rather a puzzle. Given the abysmal state of our highways and the significant spinoffs from better connectivity, state governments ought to be eager to improve the quality of national highways passing through their respective states. However, according to news reports, all but two states have yet to spend much of the Rs 1,527 crore released so far, with five of them yet to touch almost all of it. Since two of the five, Maharashtra and Tamil Nadu, are supposed to rank among our better-administered states, the reason evidently goes much deeper than the obvious explanation of non-availability of money, to the way we use it.

The problem in this case is not of the money lapsing due to late or inadequate use: there is a dedicated fund for development and maintenance of national highways. When the fund was created nearly five years before, the expectation was that it would expedite utilisation. And, though Parliaments standing committee on the sector, in its 74th report, at the end of last year, had noted substantial progress over two years in this regard, the fact is progress is woefully inadequate. Why

Part of the reason, apart from lack of political will, is that states are often unable to bring in their share of funds. Another reason is that the conditions specified are quite stringent. Consequently, contractors are reluctant to come forward. The net result is that despite the crying need for such infrastructure and availability of funds, in practice there is little or no progress on the ground.

Unfortunately, efforts at attracting private investment in the sector have had only limited success so far. Clearly, it is time to do more thinking on private-public partnerships in this area. Outside stretches of expressways, the build-operate-transfer model hasnt found so many takers and this is true for tollways, too. It is in the interest of all players to come up with more ways of marrying enterprise with funding.