Union Minister for Shipping and Road Transport and Highways Nitin Gadkari talks to Swarajya about progress on India’s highway expansion programme, inland waterways, cleaning up the Ganga and more.
You can play the video above and continue on to the transcript (slightly modified for easier reading) available below.
Question: This conversation [is] with the minister Nitin Gadkari. Nitin Gadkari is currently the minister of Road Transport and Highways, Shipping and Water Resources, River Development and Ganga Rejuvenation. He is perhaps the most watched minister of the government today because the very corn`erstone of… Prime Minister Modi’s promise of new India rides upon his hard work… the challenge of building a next generation infrastructure for a new India. I welcome you on behalf of the team Swarajya and we thank you for giving your crucial time for this discussion with the readers and the audience of the Swarajya.
Sir, coming back to your ministry, the highways and the shipping, their projections that India will need more than 50 lakh crore in the coming years to be invested in the infrastructure. Now if you take the example of the road infrastructure in this country, the two major issues plaguing the road infrastructure -- one is the land acquisition and the other one is the lack of the financing, the capital markets in India not deep enough to finance them. So, how are you moving about ensuring that such an enormous amount of investment can actually be tapped for the purpose of building roads, waterways now, especially when the PPP model which we have tried for the last couple of years has not worked very satisfactorily, in a very satisfactory manner? So, you have been moving away from the PPP towards the EPC contracts and now you have brought in the Hybrid Annuity Model, so what do you think is the way forward to mobilize the resources for the infrastructure?
Nitin Gadkari: In our country, we have 52 lakh kilometre of road length. Out of which only 96,000 kilometre was National Highway and …40 per cent of the country’s traffic is on 2 per cent of road. So, we have taken a decision to increase it from the length of the National Highway from 96,000 kilometre to 2,00,000 kilometre, out of which 1,70,000 kilometre has been declared. 80 per cent traffic of the country will run on National Highway. Now, automobile industry has increased by 22 per cent. Presently, we have a budget of Rs 71,000 crore.
Now, neither we have a money problem, [nor] we have a land acquisition problem. We have a system problem, a problem of mindset best reflected in the way in which you are asking the question. No money problem is there. Now I’m telling you how it can be possible. You are correct as far as PPP model is concerned in the previous UPA government. When I took [charge] as a minister, there [were] 403 stalled projects, the total cost involved was Rs 3,85,000 crore.
Today i think it would be fair to say that 99.99 [per cent] problems have been solved. My ministry saved Indian bankers from a potential NPA of Rs 3,00,000 crore. We made the research yesterday of it, everything is moving fast now. We have changed 22 cabinet decisions. And [the] reason is [that] people are moving fast.
In land acquisition alone we have spent Rs 68,000 crore. Only for land acquisition. Our cost has increased. Once upon a time in a road project 15 per cent cost was land acquisition. Now it comes to 35 per cent and some instances can be as high as 50 per cent. Either you like it [or] may not like it, [it is] political compulsion, it is good or bad -- we have to accept it. So, now as a farmer I’m happy that the farmers are getting more prices for that, but land acquisition is not a problem. That is the reason that when I had taken charge as a minister it was 2 kilometre per day… and today it is coming to 28 kilometre per day and up to March… we will maintain that. And next year it will be 40 kilometre per day. Last year we… awarded road constructions – [some] 16,000 kilometre. For this year we are trying to make it 1,000 kilometre more for that.
So, we have already decided [that] without 80 per cent of land acquisition, we [would] not give appointment letter. That is the reason that I do follow ups everyday. I have a six-hour meeting with UP Chief Minister and all his officers in Lucknow. Seven-hour meeting with Uttarakhand Chief Minister in Dehradun, then seven-hour meeting with Nitish Kumar-ji in Patna and nine-hour meeting with Devendra Fadnavis in Maharashtra, with video conferencing, making follow-up for every project. So I’m pursuing. The reason we are awarding the contract [is] that we are acquiring the land, because without 80 per cent actually we are not giving the appointment letter. It is difficult, but not impossible.
Question: But as you said that when you came to the office there were lots of projects which were stalled and you basically revived those projects. How exactly you did so? What exactly was the problem facing those projects, especially the PPP projects and…
Nitin Gadkari: Actually in all the projects… the people who [were 80 per cent] responsible for this was [the] government. Land acquisition was not there. Environment, forest clearance was not there. Even two and a half years at that time the minister [did] not sign a single file. If the project involves tree cutting, it will need environment and forest clearance. How [can you] expect… the contractor to complete the work? No land acquisition. On encroachment decisions were not taken, and so 80 per cent is because of government. But we will hear government people say -- I’m very frank and fair -- every government officer says, “Sir, sir, this is because of this contractor”. Because in my department when every accident [takes place], the policy is very clear – the driver is responsible for the accident. But for the first time I [found] out it is… who prepares DPR or road agency -- are responsible too. Because of wrong engineering we are facing problems.
So now it is not with the contractor, it is not with the bankers, so we have taken a decision – the Prime Minister appointed a committee under my chairmanship for clearing infrastructural projects. We have taken a lot of meetings, we clear the projects, we solve the problems, we complete the land acquisition, make the follow-up. We call the bankers and we make the settlement with the bankers. We take 22 decisions in the cabinet with the help of [the] Prime Minister and [the] Finance Minister and on the basis of that we solve the problems. And… lastly we have taken [the decision] – if the project is completed [more than] 50 per cent... we will finance them, and many of the projects [are being financed by] NHAI… now, and by [this] way, we found… the way out and now everyone is moving.
And I’m giving you only one example of a company… L&T. I want to quote it directly because you can understand. Mr. Naik once came to me. And he was chairman at that time at L&T. “Sir, we are sorry. We are not at all interested to make any roads. We want to close this section and we are facing huge losses and it is difficult for me to complete the projects. Please, sorry.” I requested them… [told them] one of the projects from Amravati to Surat in my area was very important -- [there was state assembly] election, I was there at that time… but he said, “No sir. We will go back.” And today that L&T is working with me, having works more than Rs 15,000 crore and making 11 projects.
Question: Oh, it’s a great news.
Nitin Gadkari: And everyone is doing good and actually it is a credit for me. We are transparent, corruption-free, time-bound -- that is the result. In the whole industry, no one can charge any type of corruption charges against the ministry. We have signed… contracts [of] more than Rs 8 lakh crore, but no contractor needs to come to my office. And today the position of contractors is… good and that was the reason… they were not in [a] position to court for PPP – [for] 17 tenders no one was there. So, we planned a new model, named it as Hybrid Annuity Model.
The Hybrid Annuity Model means land acquisition will be our responsibility, utility shifting will be our responsibility -- then out of the cost of the project, 40 per cent we will give as a guarantee need, 60 per cent he has to raise, out of which 30 per cent from him and the other part he will take… from the bank. Toll will be collected by the NHAI and we will return his money back on annuity basis with bank interest plus 3 per cent profit. So, in the construction he is getting 15-20 per cent profit and on annuity basis he gets 3 per cent profit on annuity. So, on the way already we have signed more than 80 to 90 projects of Rs 2 lakh crore and the projects are moving fast.
Now, we are again moving to think on PPP model, but now I’m telling you a thing, very simply. Now I’m not for any investment from foreign aid-- okay they are welcome, but… suppose with my own money I’m going to complete one project. Immediately I go to bank and make it monetize for 20 years. I trusted the project cost is Rs 2,000 crore. By monetizing, I will be getting Rs 3,000 crore -- so it’s my good profit and I’m giving work to the Indian contractors. So I can raise Rs 10 lakh crore from the capital market. I’m telling you just because when I was minister in Mumbai, I started to raise the money from capital market for Mumbai-Pune express highway, Worli-Bandra sea link project and fifty-four flyovers in Mumbai.
And [from] today I’m giving an example -- I had just gone to capital market for Cochin shipyard. I was there at 9 o’clock, [when] my private secretary [told] me – “Sir, there is a problem. Cancel the programme today – postpone it. I asked why. He said, “Stock exchange index has gone down by 300 points. Today it’s not a good day.” [I said] “Nothing doing, whatever happens we will see.” I went. After I reached, photos of my holding the bull were taken. I went upstairs… and at 10 o’clock I rang the bell. At 10:36, there were 76 over-subscriptions and I got Rs 1,26,000 crore. Now I’m making scheme that all journalists, doctors, lawyers, teachers, constables -- from their money I want to make roads. I will give priority to that. More than foreign investment I want to give priority to them. Bank gives 6 per cent interest. I said, “For 10 years I will give you 8 per cent interest and will give on monthly basis. NHAI has AAA rating -- world agency has given it -- and I’m giving you guarantee that I require 10 years.” And I ask investors, “Do you want returns on daily basis? Then I will give on daily basis. If you want weekly, then I will give weekly. If you want monthly I will give you on monthly basis. No problem of money, the money is lying.
Now I will monetize 105 projects -- Rs 1,25,000 crore -- like selling gold, money is ready. I have Rs 10,000 crore toll income. I will get Rs 1,75,000 crore immediately, money is ready. In port, Rs 5,000 crore turns into dollars -- I can get Rs 50,000 crore with less than 2 per cent interest.
Now, for making Panvel and JNPT eight-lane roads, I have taken money from DBS Singapore and State Bank Capital with 2 per cent interest -- without hedging got at 2 per cent Rs 3,000 crore. No shortage of funds. The people who work in government - the mindset. This planning, that planning, ‘it has gone outside budget’ -- they waste time in this only. No shortage of funds. We can do 4 times more work than this, we can do Rs 25 lakh crore work. Today, we have crossed Rs 8 lakh crore.
Rs 2,000 crore is my shippingsector budget, but I’m doing Rs 16 lakh crore work. Now, I will tell you how I’m doing. Now I’ve Rs 2,60,000 crore work. In Sagar Mala project, Rs 4,00,000 crore for port-road connectivity, port-rail connectivity and modernization… of ports. In that, Rs 2,60,000 crore work has been given. Now I’m making 40 industrial clusters. One electronic company, purchasing land in JNPT, asks for 200 acres. In first phase Rs 6,000 crore, in second phase Rs 12,000 crore investments they will do. In first phase, 40,000 people will get jobs, in second phase 1,20,000 people will get jobs. I told them, “Sign the affidavit -- then only will give you land.” Automobile cluster, industrial cluster, chemical cluster, coal sale, all 14 clusters, economic zone, Rs 12 lakh crore investment, I’m making 5 Smart City. What port model we have today is like landlord model -- we do only land acquisition and construct breakwater. Rest all in PPP. Where are we investing? And our profit margin is Rs 7,000 crore this year.
Question: Why is the government charging tolls on the highways and other utilities? Because if you see from the other side, the pre-construction cost of any project is borne by the government -- the land acquisition, the utility shifting and then you also give viability gap funding to the private player. So a very big portion of the project is basically borne by the government and then private player is making a profit over it, So there is a political question regarding this thing -- then why the toll collection if money is not a problem?
Nitin Gadkari: First thing is that if you want good services you have to pay for it. You can take your programme in five-star hotel or if you don’t want to pay the money then sit in Ramlila Maidan. If you want to sit for free, then have chai-pani and sit there. You want good roads. If you want good services, you have to pay for it.
Distance between Mumbai [and] Pune -- it [used to take] 7 to 8 hours when there was no express highway. Now it takes only 2 hours -- so saving of 4 hours is saving of time and saving of fuel. You have to pay the toll and I’m talking confidently only because of my toll income. If you are going to stop my toll income then I have to only talk about Rs 71,000 crore from budget. Why I’m making all these projects? It is because of my getting my toll income. That’s why I’m monetizing that income and I’m doing the thing -- that’s why I’m talking about Rs 25 lakh crore. If you cancel the toll, my income will be Rs 4,00,000 crore. Nothing doing, because it is only from the budget I can do it. So, best way to understand -- if you want good services, you have to pay for it.
And second thing, now this is the project of 50 km. Cost of the project is, suppose, Rs 400 crore with the bridges and everything. Now, we are going for the tender process and there are a lot of people who are still in losses, somewhere they are in profits. It’s a business because of the contractors and the PPP investments -- they are not the social worker, they are not priests, they are doing it to earn money. When they fill the tender, A says, “I will complete this project as per your standards and for 9 years, with my rates, will take toll.” B says, “I will take toll for 10 years”, C says, “I will take toll for 11 years”. Whoever gives least offer we give tender to them, and sometimes it is less than our EPC cost. Competition is there…
You know there is one tunnel named Zojila Pass tunnel. 3 times we called for tender -- only 2 companies used to come for tender. I have sat down and changed financial and technical qualification of that tender -- 7 companies participated On a Rs 6,000 crore proposed cost for the tunnel, we could save Rs 1,400 crore. Because of competition, we have saved Rs 1,400 crore. In Maharashtra, I have changed qualification and could save Rs 6,000 crore.
In financial and technical qualification team, only 70-80 people used to work earlier. Now I have increased it to 300-400 people. Naturally, our cost has reduced.(due to better technical and financial reviews).
Now, our work is -- quality of construction has to be improved and cost of construction has to be reduced using new technology. Now, tar is Rs 45 per kg, waste plastic is Rs 7-8 per kg. 8 per cent plastic you can put in to the mix. You can reduce the cost. With oil slag in Jamshedpur, airstrip we have built, roads we have built. Using oil slag we are constructing 150 kilometre road between Hospet and Bellary. You can save the cost of construction and you can increase the quality of construction.
I have booked 285 lakh tonnes of cement. Can you imagine, what is the rate? Rs 120-130-140 per bag. Tax extra, transport cost extra. In market it is 350. I have warned them, 40 per cent of country’s cement is used by our department. 68 per cent improvement in construction material is because of us. I warned them, “I would evoke the Essential Commodities Act -- then you will be in trouble if you increase the rate”. So decreasing cost of material, improving quality of construction, new innovations, new technology, using new code, using precast. Land acquisition we can’t do anything, we have to pay.
Question: Coming to this new technology thing, that to complete the projects on time and to improve the quality of the construction we have to bring in new technology, more automation most likely, but that reduces the employment elasticity of the projects, right, because the employment is a big debate today. But if you are bringing in new technology, let’s say driverless car in the future, what will happen to the employment in that scenario?
Nitin Gadkari: This is not [the] case with every new technology. I’m supporter of the technology, but I’m not going to allow the driverless car. I’m not going to allow. [I know] that my statement [will be] criticised in social media, but I’m not going to allow. We have a shortage of 22 lakh drivers in the country presently. Now we are opening 2,000 driving training centres… We don’t open centres in Delhi, Mumbai, Kolkata -- we want to open in rural area, tribal area, giving employment to youth of that area. And already one report we have from IIT -- when there is a Rs 1,000 crore of investment in road sector it is going to create direct, indirect job for 1,00,000 people. So the jobs are there.
Question: But as you adopt new technology this is going to…
Nitin Gadkari: This is a totally wrong concept that technology is going to reduce the cost. This is like computer. There was an opposition for computer, that it was going to make you lose your jobs, but today the people who are software engineers they are going… abroad, to the different parts of the world, and they are giving us the foreign exchange income for India -- more than tax.
Question: So basically we can expect more automation in the coming days in the…
Nitin Gadkari: But not driverless car -- for that I’m not going to allow. We have to find… the way out… which type of technology we can select, precast. We have to use it. Now pollution is a big problem. By making the bridge, that concrete, sand, cement on the road in place of that somewhere in the factory, we can construct the bridge and take it and assemble there. So the technology should be cost effective, import substitute, pollution-free and useful for the people -- that is important -- and we have to create employment potential. We should not accept any technology which is going to kill our employment potential.
Question: Let me ask you the state of the Ganga mission because there [are] lots of complaints regarding this mission -- that it is not moving ahead as fast as it was supposed to be?
Nitin Gadkari: My problem is -- communication is a problem. I don’t have any liasioning officer and PR relations -- even I don’t want to go for that.
Question: You have a Twitter account -- you can tweet.
Nitin Gadkari: This has been my weak side. I always remember the Principle of Archimedes. Anything -- take it to the water… whatever the weight of a particular part -- that will increase -- that is the thing. So I’m going to do the work... Now I’m telling about Ganga.
We have 189 projects. Nirmal Ganga is one mission, out of 189 projects. 47 has already been completed. Two or three days before on front page in Hindustan Times, there was a news – [the] improvement of this water purification in Ganga… all details [were] there. Now 47 we have completed and before [the] end of March we are going to allot all the projects. Then we are also making 40 new projects for 5 mld to 10 mld where the nalas and tributaries are there -- we want to make… recycling of water. Now, in Nagpur, 5 years before, we sold the toilet water of Nagpur to Maharashtra government. We are getting Rs 18 crore as a royalty and 8 days before we signed the contract by which we are getting Rs 78 crore by selling off toilet water of our city to [the] government of Maharashtra.
So, now I’m planning -- there are 12 NTPC projects -- railway station – [I’m planning] to make the recycling of water and sell it to the power projects and sell it to the railway stations for that. Third thing is from this water we can get methane and from methane – bifurcate methane from CO2 -- get bio CNG -- at least we can run 8,000-10,000 buses from getting methane from that bio-digester, getting bio CNG from that… working on that and before March we will start all the work and my promise is 80 per cent -- up to before March ’19 Ganga will be cleaned. We are working on, we are collecting Rs 10,000 crore sponsors for making ghats, mokshadhams and light and sound show, gardens, improvement of lakes, roads, parking system and already we have received the promises of Rs 3,000 crore and now we are trying to get money from the people -- Ganga Mission, Namami Gange -- and my idea is taking at least -- it may be Rs 10, Rs 20, Rs 100 from 1 crore people for this Ganga -- then we have 4,500 villages.
Now I’m telling you what the people… Shiv Nadar ji from HCL -- today I received 2 [phone calls] from him -- he wants 100 villages in CSR. So, now we are developing these Ganga Gram villages… today at 12 o’clock I have a meeting [with Uma Bharati], and we are trying to give it to the good social organization -- Ramdev Baba, Sri Sri Ravi Shankar, corporate, educational institutions, NGOs that… can take [the] village and develop a Ganga Gram. Integrated development of the area. We are planning for plantation of 10 crore trees, we are taking help from Sudhir Mungantiwar who is Forest and Finance Minister of Maharashtra. Last year their plantation number was 50 lakh. This year it was 4 crore and everywhere there is [an] eTag.... So, on that basis we are making this scheme on the riverfront side. Then I’m confident that in March ’19 at least we are going to complete all these things.
But what the problem is -- now you go in Ganga and see in Ganga -- we are spending Rs 5,500 crore on Jalmarg -- we are making 4 multimodal hubs, Varanasi, Haldia, Sahibganj and Gazipur -- making 60 river ports. We have inaugurated the system of river traffic control -- just like air traffic control -- from Haldia to Patna. We are starting 8 ferry services, 9 rural services. We are starting dredging in Brahmaputra. We have already given contract of Rs 1,600 crore for maintaining of 3 metre of drop in Ganga... From Ganga they can go to Bengal Sagar and they can go to Brahmaputra and we are making dredging in Barak and also in Bangladesh, spending Rs 2,050 crore on that. So it is going to start a good economic transformation in that area. But now you can go and see. Problem is that… we are not presenting properly to the people -- for their knowledge -- that is the thing… Now the Varanasi terminal… only the road is a problem. Otherwise we can inaugurate that. Even Farakka [to] L&T, we have given a work of Rs 450 crore… Within 4-5 months they will complete that work. We are going for seaplane, catamaran… 8 days before we…signed the agreement with the biggest company of Russia – [a] shipbuilding company -- with Cochin shipyard. We are making catamaran, we are preparing the rules and regulations for seaplane. [Within] next 6 months we will start seaplane… so everything is going on. We have already 5 star, 7 star cruise in Ganga.