Analysis Report on

Roadways
Presented to

Mrs. Smita Santoki

By team members:
Madhuvanthi.S -16020241102
Neelesh Rauniyar
16020241159
Priyanka Jain 16020241115
Ravi Raj 16020241158
Vivek 16020241139
Yaseen Javad- 16020241140

Introduction
Roads are the key to the development of an economy. A good road network constitutes
the basic infrastructure that accelerates the development process through connectivity and opening up
of the backward regions to trade and investment. Roads also play a key role in inter-modal transport
development establishing links with airports, railway stations and ports. In addition, they have an
important role in promoting national integration, which is particularly important in a large country like
India. Since independence, there has been a tremendous increase in the volume of road traffic, both
passenger and freight. However, the main road network comprising of national and state highways has
not matched this traffic growth. Much of the expansion of the road network has been through building
the rural roads to provide connectivity to rural masses, although 50 percent of the villages are still to
be connected with all-weather roads. (The main roads have also not kept pace with the traffic demand
in terms of their quality).
Despite their importance to the national economy, the road network in India is grossly
inadequate in various respects. The existing network is inadequate and is unable to handle high traffic
density at many places and has poor riding quality. Road safety is a growing concern in the present-day
world. Though Indias vehicular population is just one percent of that of the world, 6% of the world
accidents occur in India. The national highways, comprising 2% of the entire road network in the
country, account for nearly 20% of the road accidents. (Source: - Central Institute of Road Transport).
Over 1,25,000 people are killed and more than 5,00,000 people are 2 injured in the year 2009 in India
due to road accidents. Apart from drivers skills and behavior, lack of knowledge of road safety, general
attitude of the road users, quality and adequacy of the roads are the most important contributors to
such accidents. Prior to the National Highways Development Programme (NHDP) initiated by the NHAI,
almost all National Highways and State Highways were 2-lane, undivided roads with uneven surface
causing traffic congestion, required more travelling time, unsafe not only during the night time and in
the rainy season by also during the day time. These roads required more fuel, more travelling time and
they also added to the environmental pollution. The road side amenities which make the journey

comfortable such as petrol pumps, parking places, hotels and restaurants, service roads, toilets, repair
shops, weigh bridges etc. were either missing or inadequately available in an unplanned manner mainly
by the private entrepreneurs.
There are various factors which make road safe and less accident prone, such as smooth
surface, 4-laning, dividers, flyovers, underpasses, bridges, subways, bypasses, speed breakers, signals,
signboards, road markings etc. All these factors also increase the speed and reduce fuel requirement.
But majority of these factors were either missing or available in inadequate number. Moreover, in order
to reduce the air and noise pollution, caused by the heavy traffic, hardly any remedial measure in a
planned manner was undertaken. The main reasons for all above mentioned shortcomings is the
inadequacy of funds for maintenance and improving the quantity and the quality of the road network
and development of the National Highways and the State Highways. To bridge the resource gap and to
instill the competitive efficiency, efforts are being made to associate the private sector with road
projects; the Public Private Partnership (PPP) using the BOT (Build Operate Transfer) is introduced
to develop the roads and highways in India. The National Highways Authority of India (NHAI) was
established in 1995 to implement the National Highways Development Programme (NHDP) which
constitutes 4/6 lining of the Golden Quadrilateral.

Objectives

As India is a vast country it is necessary to develop various transport modes in an integrated

manner to build up an efficient, sustainable, safe and regionally balanced transportation

system.
Adequacy and reliability of transport infrastructure and services are important factors which
contribute towards the ability of the country to compete in the field of international trade and
attract foreign direct investment.

It is necessary to create a policy environment that encourages competitive pricing and

coordination between alternative modes in order to provide an integrated transport system that

assures the mobility of goods and people at maximum efficiency and minimum cost.
India needs increased road mileage, especially to open up the vast areas which cannot be
reached except through roads. Besides there is tremendous scope for creating employment

through road construction and maintenance.

Only by developing the road system, the farmer can be assured of a steady market for his
products. It is the road system which brings the villagers into contact with the towns and the

new ideas and the new systems from the towns.

The great importance given to the construction of border roads to facilitate the movement of
troops for the protection of the northern borders against the Chinese aggression is an example

of the great importance of roads in the defence of the country.

Each mode of transport should operate in its field of economy and usefulness, with competitive
and non-discriminatory prices that are adequate to support progressive development of
transport infrastructure and services.

Porters Five Forces Analysis

Competitive Rivalry

Competitive rivalry between big players is quite intense as far as winning projects is concerned

due to high price sensitivity

Few large players have the expertise for undertaking bigger projects; hence, competition is
higher in case of large infrastructural projects

Threat of New Entrants

With liberalisation, rules have been eased for the entry

Big players block the entry of new players in the roads segment, especially in large projects

Threat of substitutes is low

Even if government wants to renovate rather than going for reconstruction, it is highly likely to

Substitute Products

go to the same players

Bargaining power of suppliers

Bargaining power of suppliers is very low

Several small players exist in the suppliers section that weaken their power

Bargaining power is strong due to robust price sensitivity and low costs

Bargaining Power of Customers

Buyers are government organisations or major agencies that enhance their buying power

KEY FACTOR FOR EXPANSION OF ROADWAYS

Sales of passenger vehicles increased at a CAGR of 10.1 per cent during FY06-16 and reached

3.4 million in FY16

Sales of commercial vehicles in the country increased at a CAGR of 5.5 per cent in FY10-16,

with the number reaching 782,814 during FY16

Rising per capita income and growing middle class coupled with easier access to finance and a
wider price range of vehicles have boosted car sales

The government has aimed to attract funding from the private sector for infrastructure projects

and thereby reduce strains on the budget

The PPP model has emerged as the favoured one for private sector participation in road projects.
As a result of government's initiative, India has completed 112 PPP projects and 149 PPP
projects are under progress.

Roadways has been the key focus area for budget allocations over the years
As per Union Budget 201617, the government provided an outlay of USD14.5 billion for the

road sector
Between FY09 and FY17, budget outlay for road transport and highways increased at a robust
CAGR of 22.8 per cent In FY17, GOI is planning to approve 10,000 kilometres of national

highways in India.
Also, GOI, is setting a budget to raise USD2.2 billion in the form of NHAI bonds

Key opportunities for Indian roadways

National highway development project

National Highway Development Project (NHDP) is a seven phase project amounting to USD60
billion. The project aims to widening, up-gradation, and rehabilitation of 47,054 kilometres of

national highways.
Ministry of Road Transport and Highways (MoRTH) aims construction of over 10,000 kilometres

of road projects during 2016-17

NHAI awarded 79 road projects covering 6,397 kilometres in FY161
Development of National Highways through PPP is expected to remain the key focus area for the
government

During the period FY15 to FY19, investments through PPP are expected to be over USD31 billion
for National Highways and around USD10 billion for state highways

Increasing number of vehicles on the roads

In India, roads remain the most important means of transport, accounting for around 80 per
cent of the passenger traffic and 65 per cent of the freight traffic

Number of total vehicles in India increased at a CAGR of 9.4 per cent during the period of FY0616, from 9.7 million to 23.9 million

As of FY16, two wheelers accounted for 78.6 per cent of the total number of vehicles in India

1. A good potential for construction and EPC companies

Under the 12th Five-Year Plan, the government targets to develop national
highways at the rate of 20 km per day

Indias construction sector, is projected to grow at 7 8 per cent each year

over the next decade(till 2025); the sector is now expected to become the
worlds third largest by 2025

Indias construction market was USD157 billion for FY14, an increase of USD4
billion over FY13.

2. A strong focus on infrastructure

Under Union Budget 2015 16, government plans to connect 1,78,000

unconnected habitations by all-weather roads. This would require completion
of existing 1,00,000 kms of roads under construction plus sanctioning of
additional 1,00,000 kms of roads

Infrastructure spending is expected to reach USD1 trillion in the next FiveYear Plan (FY1217).

3. Government initiatives

An increase in FII limit in infrastructure corporate bonds from USD5 billion to

USD25 billion in FY12 was a step in the right direction

Cumulative FDI inflows, from April 2000 to March 2016, in construction

development & infrastructure sector (including roads and highways) reached
USD24.18 billion

Challenges
1. Most of the Indian roads are unsurfaced and are not suitable for use of vehicular traffic. The
poor maintenance of the roads aggravates the problem especially in the rainy season.

2. One major problem on the Indian roads is the mixing of traffic. Same road is used by high speed
cars, trucks, two wheelers, tractors, animal driven carts, cyclists and even by animals. Even

highways are not free from this malady. This increases traffic time, congestion and pollution and
road accidents.

3. There are multiple check-posts, toll tax and duties collection points on the roads which bring
down the speed of the traffic, waste time and cause irritation to transporters. Rate of road taxes
vary from state to state and inter-state permits are difficult to obtain.

4. Way side amenities like repair shops, first aid centers, telephones, clean toilets, restaurants, rest
places are lacking along the Indian roads. There is very little attention on road safety and traffic
laws are willfully violated.

5. There is very little participation of private sector in road development in India because of long
gestation period and low-returns. The legislative framework for private investment in roads is
also not satisfactory.

6.

The road engineering and construction are yet to gear themselves up to meet the challenges of
the future.

7. There has been no stability in policy relating to highway development in the country. It has
changed with the change of government.

8.

There are a number of agencies which look after the construction and maintenance of different
types of roads. Since there is no co-ordination between these agencies their decisions are often
conflicting and contradictory.

9. There is shortage of funds for the construction and maintenance of roads. Instead of giving high
priority to this task the percentage allocation has decreased over the years While percentage
share of plan allocation was 6.9 per cent in the First Five Year plan it has come down to less
than three percent in the Eighth Plan.

Limitations of Road Transport in India

1.

Road transport is not as reliable as rail transport. Amid stormy or surge season, roads get to

2.

be distinctly unfit and dangerous to drive.

This method of transport is unacceptable and exorbitant for transporting cheap and bulky

3.

or massive goods over long distances. Goods are subject to damages.

There are chances and engine breakdowns, accidents. Along the road lines, vehicles are not

4.
5.
6.

as protected and safe as rail transport.

Roads are highly congested in urban communities & cities.
Most of the roads are not in good condition and are insufficient.
Due to high costs of petroleum and diesel, operational expenses of road transport are rising

7.
8.
9.
10.
11.
12.
13.

making it more costly.

Road transport is subject to activity delays, traffic delays, etc.
Goods are susceptible to improper and careless driving.
Driving regulations can bring about postponements and delays
Lack of organization, irregularity and undependable
The rates charged for transportation are likewise unsuitable and unequal.
Illegal activities take place esp. in trucks like transporting guns, illegal drugs, criminals, etc
Road transport vehicles are susceptible to loot which results in loss of goods; drivers life is

14.
15.

also at stake.
Driver in India are not provided with proper facilities during driving.
Road transport results in pollution

Important Terms

1. Ministry of Road Transport and Highways (MoRTH) aims construction of over 10,000
kilometres of road projects during 2016-17.
2. The Prime Ministers Gram Sadak Yojana (PMGSY) is a scheme for development of rural
roads in India.
3. Companies enjoy 100 per cent tax exemption in road projects for five years and 30 per cent
relief over the next five years.
4. The National Highway Authority of India (NHAI), a government agency, is responsible for

5.
6.
7.
8.
9.

construction, maintenance and development of highways.

BOT: Build Operate Transfer
FDI: Foreign Direct Investment
GOI: Government of India
INR: Indian Rupee
MoRTH: Ministry of Roads Transport and Highways

Conclusion
India has the second largest road network across the world at 5.23 million km. This road
network transports more than 60 per cent of all goods in the country and 85 per cent of Indias total
passenger traffic. Road transportation has gradually increased over the years with the improvement in

connectivity between cities, towns and villages in the country. everyday Indian government build 15km
roads and connecting to semi urban city with rural India this process government take very initiative
and bold steps for connective each and every state via road because of the near about 52% of total
Indian population live in rural area so in this process help many people can take any easy excess daily
routine basic things and it help to develop our Indian economy as well as contribute to in our GDP.
after GST implemented this is benefits for the logistics and transport system because of this
implementation each and every get can easily transport goods via road connectivity. government are
trying to connect north east state via road facility. Because of north easy is very important for
developing Indian economy because of huge amount of resources available in north east state areas.