Golden Quadrilateral : Cost ratio Benefit

Introduction:

The Golden Quadrilateral is a monumental infrastructure project in India,

representing one of the most ambitious and transformative initiatives
undertaken by the government. Conceived under the National Highways
Development Project (NHDP) and executed by the National Highways Authority
of India (NHAI), the GQ project was aimed at creating a high-speed road
network that would connect four of India's largest and most economically
significant cities: Delhi in the north, Mumbai in the west, Chennai in the south,
and Kolkata in the east. Atal Bihari Vajpayee India’s then Prime Minister first
conceived of the project in 1999, it was finished in 2012. India's road
infrastructure prior to the Golden Quadrilateral project was marked by
significant challenges, including poor road conditions, insufficient connectivity
between key economic centres, and traffic congestion. These issues
contributed to high transportation costs, extended travel times, and logistical
inefficiencies, which collectively hindered economic growth and development.
The Golden Quadrilateral project was envisioned to address these challenges
by constructing a vast network of four- to six-lane highways that would
facilitate faster and more efficient transportation across the country. This
network would not only improve connectivity between the major metros but
also enhance access to smaller towns and rural areas along the route, thereby
promoting regional development.
Aim as a Learner:
Purpose: Writing an economics project on the Golden Quadrilateral: Cost-
Benefit Ratio is valuable because it allows for a detailed examination of one of
India's most significant infrastructure investments. The project provides an
opportunity to assess how large-scale infrastructure projects can impact
economic growth, regional development, and social welfare. By analysing the
costs and benefits, you can gain insights into the effectiveness of public
spending, the economic returns on infrastructure investments, and the long-
term implications for the economy. This analysis not only contributes to
academic understanding but also offers practical recommendations for
policymakers, helping to guide future infrastructure projects both in India and
globally.

Research question my project aims to answer:

The primary research question your project aims to answer is ‘To what extent
has the Golden Quadrilateral highway project in India provided a positive cost-
benefit ratio, considering its economic, social, and environmental impacts?’

Research Methodology:

1. Data Collection
Primary Data: Questionnaires and interviews should be conducted on the
stakeholders including business people, commuters, and government officials
in order to get qualitative data on the project.
Secondary Data: Gather qualitative data from government records, NHAI,
scholarly articles, and economic databases on construction and maintenance
costs, land acquisition, and economic growth indicators, transportation
efficiency, and social impacts.
2. Cost Analysis
Direct Costs: Examine the costs incurred in the construction of the Golden
Quadrilateral, cost of land acquisition and the cost of maintenance.
Indirect Costs: Take into account social and economic factors like people
displacement, effects on the environment and the costs of other potential uses
of the resources.
3. Benefit Analysis
Economic Benefits: For evaluating the effectiveness of the project in terms of
the economy, one should employ the indicators like GDP growth, trade
volumes, and the decrease in transportation costs.
Social Benefits: Assess the changes in availability of basic needs, employment
opportunities, and standards of living through questionnaires and data
analysis.
Environmental Benefits: Evaluate the decrease in fuel usage and cars emissions
by using environmental analysis reports and other data.
4. Cost-Benefit Ratio Calculation
Net Present Value (NPV): Discount the benefits and costs of the project to the
present value and arrive at the NPV of the project.
Internal Rate of Return (IRR): Calculate the IRR to know the profitability of the
project.
Cost-Benefit Ratio: To obtain the ratio, divide the total benefits by the total
costs. A ratio more than 1 means that the return on investment is positive.
5. Comparative Analysis
The cost benefit analysis of the Golden Quadrilateral should be compared with
the other similar infrastructure projects in India or other parts of the world to
understand the results.
6. Sensitivity Analysis
Conduct break-even analysis to determine the effect of alterations in the key
parameters (e. g. construction costs, economic growth rates).
7. Policy Recommendations
Primary data In detail:
1. Surveys will be conducted to gather direct input from key groups affected by
the Golden Quadrilateral, including commuters, local business owners, and
residents living near the highway. The surveys will include questions designed
to capture how the highway has influenced travel times, transportation costs,
business activities, and overall quality of life. Responses will be collected using
simple rating scales to quantify perceptions and experiences. Surveys will be
distributed through various channels, such as online platforms, phone calls,
and in-person at strategic locations like toll booths and commercial areas. To
ensure a representative sample, a target of 300-500 respondents will be
sought.
2. Interviews will be conducted with individuals who have played significant
roles in the Golden Quadrilateral project, such as government officials, project
managers, contractors, and economic experts. These interviews will explore the
challenges faced during the project, the benefits observed, and the overall
economic impact of the highway. The interviews will be semi-structured,
allowing for open-ended discussions while ensuring that key topics are
covered. Interviews will be conducted either face-to-face or virtually, with
permission obtained for recording where appropriate, to ensure accurate and
detailed analysis.
3. Focus groups will bring together small groups of local residents and business
owners from areas along the Golden Quadrilateral to discuss the highway's
impact. These discussions will be facilitated in community centers or similar
accessible locations, allowing participants to share their experiences and
perspectives in a more interactive setting. Focus group discussions will cover
topics such as changes in economic activity, quality of life, and any challenges
or benefits experienced due to the highway. This qualitative data will provide
deeper insights into the social impact of the project.
4. Case studies will focus on specific towns or regions along the Golden
Quadrilateral that have experienced significant changes as a result of the
highway. These case studies will involve in-depth exploration of how the
highway has influenced local economies and communities. Researchers will
visit these areas to observe changes firsthand, conduct interviews with local
stakeholders, and collect relevant economic and social data. The findings from
these case studies will provide detailed examples of the project's impact,
adding depth to the overall analysis.

Secondary data in detail:

1. Government Publications:
National Highways Authority of India (NHAI) Reports: Annual reports, project
completion reports, and financial statements from NHAI detailing construction
costs, funding, and maintenance.
Ministry of Road Transport and Highways (MoRTH) Reports: Publications
related to national highway development, including policy documents and
impact assessments.
Economic Surveys: Government economic surveys that provide data on
regional economic impacts and infrastructure investments.

2. Journals:
Transportation Research Part A: Policy and Practice: Provides research on
transportation systems and infrastructure projects, including cost-benefit
analyses.
Journal of Infrastructure Systems: Focuses on the analysis and management of
infrastructure systems, including case studies of large-scale projects.
Economic and Political Weekly: Includes articles and research on economic
policies and infrastructure impacts in India.

3. News Articles:
The Economic Times: Coverage of economic impacts and developments related
to infrastructure projects like the Golden Quadrilateral.
The Hindu: Articles on infrastructure projects, their progress, and their effects
on regional and national economies.
Business Standard: News on the financial aspects of infrastructure projects and
their economic implications.

4. Publications by Businesses:
Industry Reports: Publications from firms specializing in infrastructure and
transportation analysis, providing insights into the economic impact of
projects.
Consulting Firms: Reports from companies like McKinsey & Company or
Deloitte on infrastructure investments and their benefits.
Construction and Engineering Firms: Project reports and evaluations from
companies involved in the Golden Quadrilateral’s construction, offering
detailed data on costs and challenges.