National Highways Authority of India's

National Highways Authority of India’s
Golden Quadrilateral Project

Why Golden Quadrilateral?
INDIAN ROAD NETWORK
Length (in Km)

National Highways 65,569
State Highways 131,899
Major district roads 467,763
Village and other roads 2,650,000
Total 3.315 million
National highways are less than 2 percent of network but carry 40

percent of total traffic
About NHAI
The National Highways Authority of India was constituted by an
act of Parliament, the National Highways Authority of India Act,
1988.
NHAI is responsible for the development, maintenance and

management of National Highways entrusted to it and for
matters connected or incidental thereto.
The Authority was operationalised in Feb, 1995

Overview of NHDP Project
The National Highways Development Project is a project to
upgrade, rehabilitate and widen major highways in India to a higher
standard.
The project was implemented in 1998.
"National Highways" account for only about 2% of the total length

of roads, but carry about 40% of the total traffic across the length
and breadth of the country.
NHDP is managed by the National Highways Authority of India

under the Ministry of Road, Transport and Highways
NHDP Project
Phase VI, VII:

Phase I:
Expressways and Ring
Golden Quadrilateral
roads
Phase II:
Phase IV, V:
North-South and East-
Widening of highways
West Corridors
Phase III:
Phase IV, V:
Build, Operate and
Widening of highways
Transfer (BOT)
About Golden Quadrilateral
The Golden Quadrilateral (GQ) is the largest express highway project
in India launched by former prime minister Atal Bihari Vajpayee,
however the credit should go to the prime minister Dr. Manmohan
Singh, as he was the one who completed most part ( about 75%) of
the project.
GQ is the first phase of the National Highways Development Project

(NHDP), and consists of building 5,846 kilometers of four/six lane
express highways connecting Delhi, Mumbai, Kolkata and Chennai
(thus forming a quadrilateral of sorts), at a cost of Rs. 60,000 crores
Agencies/Instituitions involved in
implementation of the project
 Around 115 stretches

 GQ resulted in creation of NH 2, NH 4, NH 5, NH 6, NH 7,
NH 8, NH 46, NH 60, NH 76 and NH 79
 GQ was funded mainly by MORTH, NHAI, SPV, ADB and
BOT
 More than 75 contractors were involved
Market Demand Analysis
Need of Golden Quadrilateral
 India’s economy had long suffered from the National highway
system’s chronic capacity shortage
 Prior to implementation of NHDP project, 40% were single lane,

57% were two lanes and remaining 3% accounted for four-lane
highways
 The total investment required to implement these programs was

estimated at $37 billion
 National highways are less than 2 percent of network but carry

40 percent of total traffic
Benefits of Golden Quadrilateral
 Annual savings of Rs. 8000 crores on fuel, wear and tear of vehicle
costs
 Reduction in journey time, safe movement of passengers and goods
 Provide big boost to cement, steel, road construction, automobile, and

tourism industries
 Fast access to markets for agricultural and industrial products and

increase the export potential
 Generate employment for over 10 lakh people every day

Government policy
• Declaration of the road sector as an industry
• Provision of capital grants subsidy up to 40% of project cost on case-
to-case basis
• Duty-free import of certain identified high quality construction plants
and equipment
• 100% tax exemption for 5 years and 30% relief for next 5 years, which
may be availed of in 20 years
• Provision of encumbrance-free site for work, i.e. the Government shall
meet all expenses relating to land and other pre-construction activities
• Foreign direct investment upto 100% in road sector
• Easier external commercial borrowing norms
• Higher concession period, up to 30 years
• Right to collect and retain toll
State wise break-up of Golden Quadrilateral
S.I. No Name of the State Golden Quadrilateral
(in kms)
1 Andhra Pradesh 1016
2 Bihar 206
3 Delhi 25
4 Gujarat 485
5 Haryana 152
6 Jharkhand 192
7 Karnataka 623
8 Maharashtra 489
9 Orissa 443
10 Rajasthan 722
11 Tamil Nadu 341
12 Uttar Pradesh 754
13 West Bengal 398
TOTAL 5846
Project details
Technical Analysis
F
E
W
S
T
R
E
T
C
H
E
S
Features
 Type: Civil Engineering Cost
 Cost: Rs. 5 to 10 Crore per kilometer
 A well designed rural road with 3.75 carriageway, shoulder and
cross-drainage works may cost between Rs. 6 to 25 lakhs,
depending on the construction conditions
 A proposed project is expected to have various alternatives in
terms of its way of implementation
 A Study of highway economics and finance involves
understanding of
 Various cost components of highway projects
 Economic feasibility of alternative highway projects
 Decision on scheme of investment on a project at its various stages
 Funding source and policies for road projects
Cost components
 Agency Cost
 Construction Cost
 Maintenance Cost
 User cost
 Vehicle Operating Cost
 Cost due to traffic congestion and restraint
 Cost due to accident
 Cost of travel time
Operations
 Completely owned, financed and operated by private body

 Build, Operate and Transfer approach
 Finance, build and lease approach etc
GQ considered BOT as the most effective form of privatization.

Several variations of BOT approach exist, like, build, own and
operate (BOO), build, own, operate and sell (BOOS), build,
operate, lease and transfer (BOLT) etc
Financial Analysis
Parameters used in estimating Financial
requirements
 Time Horizon
 Interest rate
 Inflation
 Salvage value
 Present worth
 Capital recovery factor
NHAI’s Finance Mechanisms
 Annuity based model
 Cess on Diesel & Petrol @Rs 2 Per liter
 Capital grant up to 40% of project cost
 Issuance of bond by NHAI guaranteed by government
 Other funding agencies include World Bank amounting $400mn and
Asian Development Bank amounting $200mn every year
 Issuing of Infrastructure bonds
 Set up its independent companies Moradabad Toll Bridge Company
and Vadodara Halol Toll road
 Company for getting sops and getting funds from the markets.
Through Build, Operate and Transfer schemes which include – SPV’s
(Special Purpose Vehicle), Annuity and Shadow Tolling
Financing Plan for Golden Quadrilateral
Source Rs. Cr
Total Cost 54,000
Revenue
Cess on Petrol and Diesel 20,000
External assistance 20,000
Market borrowings 10,000
Private sector participation 4,000

Funds would be managed by the following
agencies
• Ministry of rural development for component meant for rural

roads
• Ministry of Surface Transport (MoST) for remaining funds meant

for National highways, state roads, roads for interstate and
economic importance and rail safety works
Thank you
By
Lumpi
Gokul
Maheedhar

National Highways Authority of India's

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National Highways Authority of India’s

Golden Quadrilateral Project

Length (in Km)

National highways are less than 2 percent of network but carry 40

NHAI is responsible for the development, maintenance and

The Authority was operationalised in Feb, 1995

The project was implemented in 1998.

"National Highways" account for only about 2% of the total length

NHDP is managed by the National Highways Authority of India

Phase VI, VII:

GQ is the first phase of the National Highways Development Project

 Around 115 stretches

 Prior to implementation of NHDP project, 40% were single lane,

 The total investment required to implement these programs was

 National highways are less than 2 percent of network but carry

 Reduction in journey time, safe movement of passengers and goods

 Provide big boost to cement, steel, road construction, automobile, and

 Fast access to markets for agricultural and industrial products and

 Generate employment for over 10 lakh people every day

 Completely owned, financed and operated by private body

GQ considered BOT as the most effective form of privatization.

Total Cost 54,000

Cess on Petrol and Diesel 20,000

External assistance 20,000

Market borrowings 10,000

Private sector participation 4,000

• Ministry of rural development for component meant for rural

• Ministry of Surface Transport (MoST) for remaining funds meant

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