The Ministry of Road Transport and Highways (MoRTH) and the National Highways Authority of India (NHAI) have often been in the news for their out-of-the-box ideas to enhance the commuter experience on national highways. One such idea is the launch of an innovative plan to leverage value from land parcels along national highways. However, the point to be noted here is that NHAI has invited private participation for these projects. Given that the experience with private participation so far has been mixed, the viability of these projects could come under the scanner. Nonetheless, the authority is quite upbeat about its plan and expects to attract a fairly good response to the bids.
History of wayside amenities
Historically, the development of wayside amen-ities was included in the scope of build-operate-transfer (BOT)-based projects. Around 20 such amenities have been developed by highway concessionaires. However, restricted land availability has hindered the development of these amenities. With regard to the stretches developed on an engineering, procurement and construction (EPC) basis, no such facilities have been developed. Meanwhile, NHAI has also engaged oil marketing companies for the development of wayside amenities. A total of nine sites across the country have been leased out to Hindustan Petroleum Corporation Limited, most of them on a 15-year lease period.
Private participation in this space has mostly been led by unorganised local players and the amenities set up by them vary widely in size and scope, ranging from small roadside eateries to large resorts, resulting in a non-standardised experience for road users. Haveli, for example, near Ambala on National Highway-44, is a 3-4 acre facility that provides facilities such as eat-ins, washrooms, short-term accommodation and kids play area to travellers.
Plan of action
Recently, NHAI introduced a plan to develop facilities along national highways for the purpose of providing safe stopping points for highway commuters and truckers at frequent intervals. Since NHAI is constrained in terms of land availability, collaboration with private landowners will save public money that would have been needed for land acquisition and will provide livelihood to farmers.
NHAI has identified nearly 183 sites for setting up wayside amenities along national highways. These sites will be developed to provide facilities such as separate parking for cars, buses and trucks, restaurants, food courts, telephone booths, ATMs, fuel stations and minor repair shops.
Facilities which have an area of over 5 acres will be developed under the brand name “highway v ects are due between December 2017 and January 2018.
A highway village will entail the development of wayside amenities on NHAI’s land parcels. These will essentially be large-format comprehensive facilities. A total of about 180 land parcels are available with the authority. Based on the traffic mix, the developer can either develop facilities for both passengers and truckers in separate zones or only passengers or only truckers. The wayside amenities are to be located every 40-60 km of the driving distance. As per estimates, one facility will be needed on each side of the divided carriageway and on one side only for undivided carriageways. That said, 2,000-2,500 amenities will be required across the national highways.
So far, the bidding process has been initiated for 34 land parcels. Of these, the maximum number of facilities are located in Karnataka, followed by Uttar Pradesh, Rajasthan and Tamil Nadu. The BOT model will be the preferred mode of development for these parcels.
In addition to undertaking design, engineering and construction of the facility, the concessionaire will be required to arrange funding and procure raw materials as well. The concessionaire will also be responsible for obtaining all the statutory approvals from the state government. The operation and maintenance of wayside amenities will be carried out as per the service level agreement. The bid process is open to Indian as well as international firms. A single-step two-envelope process (Bidders submit two sealed envelopes simultaneously, one containing the technical proposal and the other the price proposal; the two components are separately sealed, but submitted as a single proposal) will be followed and the quoted additional concession fee (premium) will be the bid parameter. Meanwhile, the authority will be responsible for providing encumbrance-free land to the developers. The wayside amenities will be developed based on green design principles.
Private land owners/ persons with a minimum land area of over 1 hectare abutting national highways can collaborate with NHAI under the brand name “highway nest” to develop wayside amenities as a franchise of the authority. As of October 2017, NHAI has called for private participation on a franchise basis for the development of land parcels. These will typically be smaller co-branded facilities. The objective is to develop 700-800 such land parcels along the national highways.
These facilities will be developed as per standard layouts and designs of NHAI. Under highway nest too, developers will have the option of choosing from three options (facilities for both passengers and truckers in separate zones or only passengers or only truckers). The type of amenity to be developed at any location will need to be selected by private landowners according to their expectations of the traffic volume and mix. The private entity will be assisted in obtaining free access permission to the facility, assistance in land use conversion, etc. along with co-branding, logo and signage, and will be required to sign a service level agreement with NHAI. The operating model will include a co-branding partnership for the development of wayside amenities by private landowners. The co-branding partnership will be awarded for a period of 10 years and will be extendable by another five years.
The creation of wayside amenities will benefit not only highway commuters, but also the local population. The sites will promote local handloom and handicrafts by having shops selling these items. Local cuisine can be made available at the eateries at these sites. Green plantations can also be developed with the help of local people. Initial estimates suggest that about 2 million people will get direct and indirect employment from these sites. Net, net, the development of wayside amenities at these sites will bring economic development to the villages along the highways, besides providing benefits to commuters.