Performance Audit on Implementation of Phase-I of Bharatmala Pariyojana, Ministry of Road Transport and Highways

A performance audit of Phase-I of Bharatmala Pariyojana, approved by the Cabinet Committee on Economic Affairs in October 2017 for 34,800 km of national highways at ₹5,35,000 crore by September 2022. It reviews planning, financial management, award and execution of 66 projects and the monitoring system.

Audit period: 1 Oct 2017 — 31 Mar 2023
Presented: 10 Aug 2023

Findings

By 31 March 2023, 26,316 km had been awarded — 75.62 per cent of the approved length — at a sanctioned cost of ₹8,46,588 crore against ₹5,35,000 crore approved for the whole phase, and 13,499 km had been completed, 38.79 per cent of the approved length.
“Up to 31 March 2023, national highways length of 26,316 km has been awarded under BPP-I, which was 75.62 per cent of the CCEA approved length for BPP-I. The sanctioned cost of 26,316 km of project length was ₹ 8,46,588 crore (₹ 32.17 crore/km) as against CCEA approved length of 34,800 km at cost of ₹ 5,35,000 crore (₹ 15.37 crore/km). Out of this, 13,499 km of national highways length has been completed till 31 March 2023 i.e. 38.79 per cent of CCEA approved length.”Executive Summary
With three-quarters of the approved length awarded, 158.24 per cent of the approved financial outlay had already been sanctioned; civil cost per km rose to ₹23.89 crore against ₹13.98 crore approved, and pre-construction cost to ₹8.28 crore against ₹1.39 crore.
“Upto 31 March 2023, when only 75.62 per cent of CCEA approved length has been awarded, 158.24 per cent of CCEA approved financial outlay has already been sanctioned… This has resulted in sanctioned civil cost being ₹ 23.89 crore per km as against the CCEA approved cost of ₹ 13.98 crore per km and sanctioned pre-construction cost being ₹ 8.28 crore per km as against the CCEA approved cost of ₹ 1.39 crore per km.”Executive Summary
One of the stated objectives was to improve India's Logistics Performance Index, but the ministry set no target, milestone or action plan for it — and set no targets for the outcome parameters the Cabinet committee had directed, such as accident reduction, riding comfort and user satisfaction, nor any mechanism to monitor them.
“At the time of taking approval, one of the stated objectives of the Pariyojana was to improve the Logistics Performance Index (LPI) of India. However, MoRTH did not set any targets/milestones/action plan to improve the Index. CCEA had also directed for laying down outcome parameters in the form of reduction in travel time, fuel efficiency, accident reduction, comfort in riding and user satisfaction for every selected corridor and monitoring thereof. However, MoRTH did not set any target for outcome parameters like accident reduction, comfort in riding and user satisfaction etc. Further, no mechanism was set to monitor achievement of any of the outcome parameters.”Executive Summary
All 35 Multi Modal Logistics Parks that were part of the programme to make freight movement seamless remained undeveloped as of March 2023.
“Development of 35 Multi Modal Logistics Parks (MMLPs) was made part of BPP-I to facilitate efficient and seamless freight movement in the country. However, no MMLP has been developed up to March 2023.”Executive Summary
Projects left languishing under the earlier highways programme were folded into Bharatmala without first clearing the right-of-way and forest or wildlife disputes that had stalled them, and they got stuck again.
“Languishing projects of NHDP were taken up in BPP-I without resolving the existing impediments/ bottlenecks viz., availability of right of way or pending disputes regarding forest land including wildlife sanctuaries, resulting which these projects again got stuck in BPP-I.”Executive Summary
The optimisation exercise that was supposed to identify highways on freight and traffic grounds was carried out only for NHAI, raised its target by about 160 per cent to 64,675 km, and added length beyond what the Cabinet committee had approved — so the ministry's claim that lengths followed origin-destination studies and geo-mapping could not be verified.
“While optimising NHAI projects, the targets for development of national highways length under BPP-I increased substantially by around 160 per cent to 64,675 km (excluding Residual NHDP length)… Post optimisation exercise, new national highways length, beyond the lengths approved by CCEA, were included in lengths to be developed by NHAI under BPP-I… The claim of MoRTH that such lengths were arrived at after origin-destination study, freight flow projections and verification of identified infrastructure gaps through geo-mapping was, therefore, not verifiable in audit.”Executive Summary
Of 97 projects covering 2,244 km that NHIDCL reported as Bharatmala achievements, 78 projects covering 1,752 km had actually been approved under other schemes, and ₹1,57,324 crore approved for other schemes was being used to report Bharatmala achievement.
“Besides increase in requirement of BPP-I funds, the funds approved for other schemes (i.e., ₹ 1,57,324 crore) were being utilised to report BPP-I achievement, as observed in NHIDCL whereby 78 such projects (1,752 km) approved in other schemes, were being reported as achievements of BPP-I as on 31 March 2023.”Executive Summary
NHAI borrowed ₹3,00,349 crore up to 2021-22 against ₹2,09,279 crore approved as the borrowing source for the whole phase — ₹91,070 crore of excess borrowing used to meet cost and time overruns.
“The total borrowings realised by NHAI for BPP-I, upto 2021-22, was ₹ 3,00,349 crore as against the borrowing approved by CCEA of ₹ 2,09,279 crore as source of funding for BPP-I as a whole. The excess borrowing of ₹ 91,070 crore was being utilised for meeting the higher fund requirements due to time and cost overrun in development of BPP-I projects.”Executive Summary
The mode of construction departed sharply from what was approved — 1.75 per cent of awarded length under build-operate-transfer toll against 10 per cent approved, with EPC at 48.35 per cent against 30 and hybrid annuity at 49.90 against 60.
“There was variation from the approved modal mix of NHAI, as out of total national highways length of 23,268 km awarded, a meagre national highways length of 1.75 per cent was being developed under BOT (Toll) mode (as against 10 per cent approved for this mode of construction) whereas 48.35 per cent and 49.90 per cent of national highways length were being constructed under EPC and HAM mode respectively.”Executive Summary
There was no project-based accounting to identify whether a stretch had recovered its capital and could move to reduced tolling, and no mapping of revenue sources such as fuel cess, toll plough-back and borrowings to work out the cost of capital.
“There was no system for project-based accounting to identify profit centres to gauge the long-term viability of a project resulting which it could not be worked out whether a stretch could be put to reduced tolling of 40 per cent after recovery of capital expenditure. It also resulted in non-mapping of sources of revenue such as diesel/petrol cess, toll plough back from the Ministry, borrowings, other government support etc.”Executive Summary
High-cost projects including the Delhi-Vadodara and Dwarka expressways escaped scrutiny by either the Cabinet committee or the ministry, and the appraisal mechanism the committee had itself laid down was not strictly followed.
“There were deficiencies in the appraisal and approval mechanism proposed to CCEA as many of the high cost EPC projects viz., Delhi-Vadodara Expressway and Dwarka Expressway etc., could not be assessed by either CCEA or MoRTH to have the advantage of the scrutiny at that level. Further, even the appraisal and approval mechanism decided by CCEA was also not strictly followed.”Executive Summary
The audit records the acceleration too — award rose from 6.50 km a day in 2018-19 to 15.17 km a day in 2021-22, and construction from 1.04 km a day in 2018-19 to 12.37 km a day in 2022-23, including through the pandemic.
“The pace of awarding of national highways length under Bharatmala Pariyojana, went up from 6.50 km/day in 2018-19 to 15.17 km/day in 2021-22. While per day project length constructed, under Bharatmala pariyojana, improved from 1.04 km in 2018-19 to 12.37 km in 2022-23.”Executive Summary

Fact-checks citing this report

Not supported by auditRoad Connectivity: In continuation to our existing milestone of constructing roads at an unprecedented pace, we will construct 60,000 kms of National Highways in the next five years. We will double the length of National Highways by 2022.

Performance Audit on Implementation of Phase-I of Bharatmala Pariyojana, Ministry of Road Transport and Highways

Findings

By 31 March 2023, 26,316 km had been awarded — 75.62 per cent of the approved length — at a sanctioned cost of ₹8,46,588 crore against ₹5,35,000 crore approved for the whole phase, and 13,499 km had been completed, 38.79 per cent of the approved length.

“Up to 31 March 2023, national highways length of 26,316 km has been awarded under BPP-I, which was 75.62 per cent of the CCEA approved length for BPP-I. The sanctioned cost of 26,316 km of project length was ₹ 8,46,588 crore (₹ 32.17 crore/km) as against CCEA approved length of 34,800 km at cost of ₹ 5,35,000 crore (₹ 15.37 crore/km). Out of this, 13,499 km of national highways length has been completed till 31 March 2023 i.e. 38.79 per cent of CCEA approved length.”Executive Summary

With three-quarters of the approved length awarded, 158.24 per cent of the approved financial outlay had already been sanctioned; civil cost per km rose to ₹23.89 crore against ₹13.98 crore approved, and pre-construction cost to ₹8.28 crore against ₹1.39 crore.

“Upto 31 March 2023, when only 75.62 per cent of CCEA approved length has been awarded, 158.24 per cent of CCEA approved financial outlay has already been sanctioned… This has resulted in sanctioned civil cost being ₹ 23.89 crore per km as against the CCEA approved cost of ₹ 13.98 crore per km and sanctioned pre-construction cost being ₹ 8.28 crore per km as against the CCEA approved cost of ₹ 1.39 crore per km.”Executive Summary

One of the stated objectives was to improve India's Logistics Performance Index, but the ministry set no target, milestone or action plan for it — and set no targets for the outcome parameters the Cabinet committee had directed, such as accident reduction, riding comfort and user satisfaction, nor any mechanism to monitor them.

“At the time of taking approval, one of the stated objectives of the Pariyojana was to improve the Logistics Performance Index (LPI) of India. However, MoRTH did not set any targets/milestones/action plan to improve the Index. CCEA had also directed for laying down outcome parameters in the form of reduction in travel time, fuel efficiency, accident reduction, comfort in riding and user satisfaction for every selected corridor and monitoring thereof. However, MoRTH did not set any target for outcome parameters like accident reduction, comfort in riding and user satisfaction etc. Further, no mechanism was set to monitor achievement of any of the outcome parameters.”Executive Summary

All 35 Multi Modal Logistics Parks that were part of the programme to make freight movement seamless remained undeveloped as of March 2023.

“Development of 35 Multi Modal Logistics Parks (MMLPs) was made part of BPP-I to facilitate efficient and seamless freight movement in the country. However, no MMLP has been developed up to March 2023.”Executive Summary

Projects left languishing under the earlier highways programme were folded into Bharatmala without first clearing the right-of-way and forest or wildlife disputes that had stalled them, and they got stuck again.

“Languishing projects of NHDP were taken up in BPP-I without resolving the existing impediments/ bottlenecks viz., availability of right of way or pending disputes regarding forest land including wildlife sanctuaries, resulting which these projects again got stuck in BPP-I.”Executive Summary

The optimisation exercise that was supposed to identify highways on freight and traffic grounds was carried out only for NHAI, raised its target by about 160 per cent to 64,675 km, and added length beyond what the Cabinet committee had approved — so the ministry's claim that lengths followed origin-destination studies and geo-mapping could not be verified.

“While optimising NHAI projects, the targets for development of national highways length under BPP-I increased substantially by around 160 per cent to 64,675 km (excluding Residual NHDP length)… Post optimisation exercise, new national highways length, beyond the lengths approved by CCEA, were included in lengths to be developed by NHAI under BPP-I… The claim of MoRTH that such lengths were arrived at after origin-destination study, freight flow projections and verification of identified infrastructure gaps through geo-mapping was, therefore, not verifiable in audit.”Executive Summary

Of 97 projects covering 2,244 km that NHIDCL reported as Bharatmala achievements, 78 projects covering 1,752 km had actually been approved under other schemes, and ₹1,57,324 crore approved for other schemes was being used to report Bharatmala achievement.

“Besides increase in requirement of BPP-I funds, the funds approved for other schemes (i.e., ₹ 1,57,324 crore) were being utilised to report BPP-I achievement, as observed in NHIDCL whereby 78 such projects (1,752 km) approved in other schemes, were being reported as achievements of BPP-I as on 31 March 2023.”Executive Summary

NHAI borrowed ₹3,00,349 crore up to 2021-22 against ₹2,09,279 crore approved as the borrowing source for the whole phase — ₹91,070 crore of excess borrowing used to meet cost and time overruns.

“The total borrowings realised by NHAI for BPP-I, upto 2021-22, was ₹ 3,00,349 crore as against the borrowing approved by CCEA of ₹ 2,09,279 crore as source of funding for BPP-I as a whole. The excess borrowing of ₹ 91,070 crore was being utilised for meeting the higher fund requirements due to time and cost overrun in development of BPP-I projects.”Executive Summary

The mode of construction departed sharply from what was approved — 1.75 per cent of awarded length under build-operate-transfer toll against 10 per cent approved, with EPC at 48.35 per cent against 30 and hybrid annuity at 49.90 against 60.

“There was variation from the approved modal mix of NHAI, as out of total national highways length of 23,268 km awarded, a meagre national highways length of 1.75 per cent was being developed under BOT (Toll) mode (as against 10 per cent approved for this mode of construction) whereas 48.35 per cent and 49.90 per cent of national highways length were being constructed under EPC and HAM mode respectively.”Executive Summary

There was no project-based accounting to identify whether a stretch had recovered its capital and could move to reduced tolling, and no mapping of revenue sources such as fuel cess, toll plough-back and borrowings to work out the cost of capital.

“There was no system for project-based accounting to identify profit centres to gauge the long-term viability of a project resulting which it could not be worked out whether a stretch could be put to reduced tolling of 40 per cent after recovery of capital expenditure. It also resulted in non-mapping of sources of revenue such as diesel/petrol cess, toll plough back from the Ministry, borrowings, other government support etc.”Executive Summary

High-cost projects including the Delhi-Vadodara and Dwarka expressways escaped scrutiny by either the Cabinet committee or the ministry, and the appraisal mechanism the committee had itself laid down was not strictly followed.

“There were deficiencies in the appraisal and approval mechanism proposed to CCEA as many of the high cost EPC projects viz., Delhi-Vadodara Expressway and Dwarka Expressway etc., could not be assessed by either CCEA or MoRTH to have the advantage of the scrutiny at that level. Further, even the appraisal and approval mechanism decided by CCEA was also not strictly followed.”Executive Summary

The audit records the acceleration too — award rose from 6.50 km a day in 2018-19 to 15.17 km a day in 2021-22, and construction from 1.04 km a day in 2018-19 to 12.37 km a day in 2022-23, including through the pandemic.

“The pace of awarding of national highways length under Bharatmala Pariyojana, went up from 6.50 km/day in 2018-19 to 15.17 km/day in 2021-22. While per day project length constructed, under Bharatmala pariyojana, improved from 1.04 km in 2018-19 to 12.37 km in 2022-23.”Executive Summary