Extension of Bharatmala Project Phase 1

GS Paper III Infrastructure

Context: Phase 1 of the Bharatmala project deadline has been extended by six years, to FY 2027-28.

Bharatmala Project deadline Extended to 2027-28

The first phase of Bharatmala Project was announced in 2017 and was to be completed by 2022.
Estimated Cost: The Cabinet Committee on Economic Affairs (CCEA) approved the first phase of Bharatmala Project with an estimated cost of Rs 5.35 trillion.
- Cost overrun: There was a 100% increase in the estimated cost of the project which was appraised by the Public Investment Board (under Department of Expenditure, Ministry of Finance) at Rs 10.95 trillion.
  - The per km cost of the project increased from Rs 14 crore to Rs 24 crore as per CAG report.
- Time overrun: Till November end, only 76% (24,416km) of the total length of 34,800 km have been awarded with only 42%( 15,045 km) of the project completed.
New deadline for Bharatmala Project:
- Award: Ministry of Road Transport and Highways (MoRTH) has been targeted to obtain all clearances( land acquisition, environmental, etc) by the end of 2024-25 and award the remaining project.
- Completion: The completion of construction has a new deadline of 2027-28.
Reasons for Delay Bharatmala Project:
- Increase in raw material cost.
- Increased land acquisition costs and unresolved land disputes.
- Impact of the COVID-19 pandemic on construction activities.
- Absence of a systematic prioritization method and no clear completion timelines (as per CAG report).
- Increase in Goods and Services Tax rates.

About: It is committee of the Cabinet chaired by the Prime Minister
Functions:
- To evolve a comprehensive and consistent economic policy framework for india
- It directs and coordinates all economic policies and activities
- Price control of Industrial raw materials and products
- Reviewing the performance of PSUs

Bharatmala project

About: Bharatmala Project is a centrally funded road and highway development project conceptualised in 2 phases across India.
- Objective: To develop road connectivity linking Border areas, Coastal roads and port connectivity of major and Non-Major ports, improvement in the efficiency of National Corridors, development of Economic Corridors, expressways, Inter Corridors and Feeder Routes along with integration with Sagarmala.
- Phase I: It is to develop economic corridors, feeder roads, and expressways. It covers 34800 km out of the total length of 74942.
Nodal Ministry: Ministry of Road Transport and Highway
Implementing Agencies: National Highways Authority of India (NHAI), National Highways and Infrastructure Development Corporation Limited (NHIDCL), and State Public Works Department.
Funding Mechanism: The project will be funded through, Cess collected from Petrol & Diesel (as per Central Road & Infrastructure Fund Act, 2000) ;Toll Tax ;Monetisation of National Highways through TOT (Toll-Operate-Transfer) ;Internal & Extra Budgetary Resources (IEBR) ; Private Sector Investment.