Big cities have lessons for govt's plan to integrate infra development

PM's I-Day speech had focused on areas such as health and infra for a self-reliant New India. The second of a three-part series looks at the challenges in banking on infra spending to spur growth

When emperors in ancient days built roads, monuments, or even cities, thousands were employed and localities came with the territory to house the workers who sometimes migrated from other countries.

Prime Minister Narendra Modi was perhaps banking on this approach when, in his Independence Day speech this year, he said the National Infrastructure Pipeline (NIP) would benefit small and large enterprises and even farmers.

“It is often said that during crises, emphasis should be given on infrastructure so that economic activity is speeded up and people get employment and it generates a cascading effect,” Modi said.

Under the NIP, the government expects an expenditure of Rs 110 trillion, with the Centre, states, and the private sector pitching in. About 7,000 projects have been identified in different sectors. Projects worth Rs 44 trillion, or 40 per cent of the NIP, are under implementation, and those worth Rs 33 trillion (30 per cent) are at the conceptual stage. Under-development are projects worth Rs 22 trillion. 

The NIP has been made on a “best-effort” basis by aggregating the information provided by various stakeholders across infrastructure sub-sectors. 

However, the World Bank’s prediction of a 3.2 per cent contraction in GDP could make funding a challenge for governments as well as the private sector. 

Arun Kumar, chairman and chief executive officer, KPMG (India), says given the extent of the pandemic and consequent pressure on resources, it is imperative that stakeholders reassess the priority of sectors and projects. According to him, India is facing one of its most challenging times since Independence and infrastructure spending can help spur economic activity and job creation.

The Centre is also looking at an integrated approach in development of all infrastructure — whether it is multimodal transport or the “one world, one sun, and one grid” concept in the power sector. 

“We do not need a situation where in the infrastructure sector and the road sector will work only for roads and the rail sector only for rail. There is no coordination between railways and roadways, between airport and port, between railway station and bus station — this sort of situation is not desirable,” said Modi.

But to being with, integration was not there. When Modi took charge as Prime Minister in May 2014, Piyush Goyal was given power, renewable energy, and coal; and Nitin Gadkari road transport and shipping, but he lost shipping later in the NDA government’s second term, which was a departure from integration. 

Though the power and renewable energy ministries remain with one minister, R K Singh, they could not be integrated because of administrative complexities. 

An integrated approach to the transport sector has been on the agenda of various governments since the early 1990s. The Multimodal Transportation of Goods Act was enacted in 1993 and covered transportation of goods by road, rail, inland waterways, sea, and air, but integrated transport has not taken root in the country, said M Ramachandran, former secretary, ministry of urban development. “There isn’t an integrated transport ministry and then there are state governments. One ministry should be created for better coordination.”

Gadkari in March 2017 spoke of a plan to develop 35 multimodal logistics parks to serve as centres for freight aggregation and distribution, multimodal transportation, storage and warehousing, and value-added services. Besides, 10 intermodal stations that integrate rail, road, a mass rapid transit system, bus rapid transit, autorickshaw, taxi and private vehicles were envisaged.

The plan was to have a multimodal company (MMC) to manage developing logistics parks. It was to have equity participation from the National Highways Authority of India (NHAI), Indian Railways, Airports Authority of India (AAI), Inland Waterways Authority of India (IWAI), and Indian Ports Association (IPA). The MMC was to institutionalise partnerships with other government organisations, like Dedicated Freight Corridor Corporation of India and Container Corporation of India. The onus, however, moved from Gadkari’s ministry to that of Goyal, with a new logistics wing being created in the Ministry of Commerce last year.

In the urban infrastructure space, however, integrating transport service has taken off in some form with airports and railway stations being connected to bus services and Metro stations in big cities. 

The National Urban Transport Policy (NUTP) of 2006 recommended a unified metropolitan transport authority (UMTA) in all cities with a population of over a million but only a few state governments made moves, said Ramachandran. Tamil Nadu enacted the Chennai Unified Metropolitan Transport Authority Act in 2011 while the Kerala Metropolitan Transport Authority Act was legislated for Thiruvananthapuram, Kochi, and Kozhikode last year. In fact, the formation of the UMTA is mandatory for areas where metros are proposed or being implemented under the Centre’s metro rail policy of 2017.

The Union government’s Indian Railway Stations Development Corporation is also revamping stations as multimodal transport hubs. But long-distance seamless movement of goods is still a challenge. Ramachandran said it could be argued that multimodal transport had succeeded because there were cargo agents and containerised freight movers, but the approach should be beyond the two modes of rail and road.

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