International Conference on Construction, Real estate, Infrastructure and Project (ICRIP) Management – 2017 on November 10-11, 2017 at NICMAR - Pune Hyderabad Outer Ring Road (HORR) Project: A Case Analysis of the Project and Its Success Ramakrishna Nallathiga Associate Professor School of Project, Real estate and Infrastructure Management National Institute of Construction Management and Research (NICMAR), Pune

Structure Introduction Urban Ring Roads Road Development through PPP HORR Project Case Location Importance Development Phases Project Costs and Finances Implementation Model Land Acquisition Performance Analysis Conclusions

Introduction With rapid urbanization, urban areas are also expanding very fast and posing challenges to transportation of goods/ people Transportation infrastructure is important not only for enabling the movement of goods and people but also to foster city development through trade and other linkages With the rapid growth of peripheral areas of cities, urban transportation systems and infrastructure projects that support them are becoming vital for integrating them and it is here that the ring roads can play a vital role Ring roads began to assume important recently and several Indian cities make attempts for them

Urban Ring Roads Definition :– ‘A ring road, orbital motorway, beltway, circumferential highway, or loop highway is a road that encircles a city so as to streamline the inner-city traffic flow through better circulation and connectivity between various nodes as well as by serving as a bye-pass for highway traffic’ (Road Traffic Technology 2013)

Road Development through PPP PPP has become a major vehicle for road infrastructure development in India (primarily highways) The advantages of the PPPs are well known e.g., risk sharing, technology transfer, investment inflows, better delivery and contractual arrangements However, the project success measured in terms of ‘Golden Triangle’ (Time-Cost-Quality) is not always the case with PPP projects, including the road PPP projects This is an attempt to analyze it on one such case – Hyderabad Outer Ring Road (HORR) Project in India.

HORR Project - Introduction HORR is an initiative of the GoAP promoted by the HMDA with Hyderabad Growth Corridor Limited (HGCL) as a Special Purpose Vehicle for implementation Some of the salient features of HORR project include: Road corridor designed as 8 lane fully access controlled expressway with 2 lane service roads on both sides (the link road connecting ORR is of 6 lanes). RoW of 150 m with the main expressway covering about 66 m and the balance for providing ramps at interchanges, service roads wherever necessary, utility ducts, rail corridor, etc., Design speed of 120 kmph with 100 kmph absolute minimum speed that gives minimum time for travel. No at-grade intersections and the provision of suitable interchanges like cloverleaf, diamond type for National and State Highways.

HORR Project - Location

HORR Project - Importance De-congestion of metropolitan area and inner ring road traffic Infrastructure to meet future traffic demand Provides orbital linkage to radial arterial roads Leads to the development of further satellite townships Provides linkage to the proposed MRTS and Bus system Provides faster access to the International Airport Connects urban nodes like Hi-tech city, Games village, IIIT, ISB, Hardware Park, Singapore Township and Financial district Develops linkages with SEZs, industrial hubs and service hubs

HORR Project - Development Phases Phase I covers 24 Km road stretch between Gachibowli Junction and Shamshabad NH-7 Junction. It was developed and opened for traffic in July 2010. The PVNR Expressway connecting the city to Shamshabad international airport was also developed in this phase as a radial road project connecting HORR and opened for traffic in October 2009. This phase was developed using conventional construction contracts. Phase II covers 137 Km covering Narsingi-Kollur-Patancheru- Medchal-Shameerpet-Turkayamzal-Shamshabad parts of Hyderabad. It is sub-divided into Phase II-A & II-B. It was proposed to be developed under BOT-Annuity model of PPP. Phase II A & B were planned to be completed in 2010 and 2012 respectively, but they are yet to be fully completed. Some stretches, however, have been opened for traffic from 2012.

HORR Project – Costs and Finance Development Phase Estimated Cost (INR) Mode of Finance Remarks Phase I (including PVNR Expressway) 500 Crores Long Term Loan from the Consortium of Five National Banks Land bank of HMDA was mortgaged to the Consortium Phase II (including 3 radial roads) 2,500 Crores Development Assistance from Japan International Cooperation Agency (JICA) Development Credit agreement signed between GoAP and JICA 33 Radial roads development 750 Crores Own Funds of HMDA Taken up for partially and remaining proposed under other schemes Source: Net Resources International (2012)

HORR Project – Implementation Model International Competitive Bidding was used to procure partners under Phase I and executed through EPC Contracts in two packages Phase IIA was divided into five packages given to five different partners under EPC and Phase IIB was divided into six packages under JV model Project Phase Implementation Model Contract Amount (Rs) Road Length (Km) Contract Date Phase I EPC Contracts 561 Crores 24.38 March 2006 Phase II-A BOT-Annuity Contracts 2,439 Crores 62.3 December 2007 Phase II-B 3,558 Crores 75.3 June 2009

HORR Project –Land Acquisition 5,142 acres of land in 83 villages was required for HORR. Out of this, 902 acres belonged to Forest department, leaving land acquisition of 4,940 acres from private land owners. Land acquisition through General Award of Compensation under Land Acquisition Act 1894 was planned initially. For House losers, rehabilitation measures were based on R&R Policy 2005 of the GoAP. Land owners protest against compensation forced formation of a State Level Nodal Committee (SLNC), which raised the compensation to be paid ranging from 40% to 100%. Land acquisition proved to be difficult to handle and it contributed to time delays of and resulted in concomitant cost overruns. Whereas, in other States like Gujarat such hurdles are overcome through land pooling schemes like TPS.

HORR Project – Performance Analysis The cost estimates of Phases I and II were revised to Rs 561crores and Rs 4,500 crores in 2010. They were further revised to Rs 6,000 Crores for Phase II. This itself is a large cost escalation. The final cost estimates are pegged at Rs 699 crores and Rs 6700 crores for Phase I and Phase II respectively (GoAP 2012). HORR project met with funds crunch during Phase I itself which led to the deferral of radial ring roads component. Phase II implementation was delayed due to finance crunch at HMDA and JICA’s development assistance gave a lifeline. JICA funds were utilised for Phase II-A works and entire Phase II-B. Seven radial roads were developed during Phase II using JICA loan, but most of them are awaiting development under various other infrastructure development schemes due to the paucity of funds available with HMDA (Full Hyderabad 2013).

Conclusions HORR has some good features e.g., traffic dispersal, improving city and regional connectivity and promoting regional economic development; also, it comes at a time when such projects are needed for metropolitan region development i.e., it is designed well ahead of time. However, HORR project implementation is a different experience: Project Phase I was simple, small and well specified to be achieved within budget and timelines using EPC contracts. Project Phase II was complex without good implementation (BoT/JV) and financing arrangements, therefore was little success. Land acquisition difficulty in Phase II led to time delays and cost overruns. However, HORR project is a larger ‘corridor project’ that would give a boost to development through residential (townships) as well as industrial (SEZs) development; these may give rise to more benefits in future and give long term success.

Thank You !!!