Business, Economics and Jobs

India: the story of a highway

Vehicles arrive at a toll plaza on the Yamuna Expressway, Aug. 12, 2012. The court had expressed serious concern over lack of provision of food as well. The court asked the NALSA (National Legal Service Authority) to contact the Sulabh International to find out whether they could come forward to help the 1,780-odd widows living in four government shelters at Vrindavan. AFP PHOTO/ Prakash SINGH (Photo credit should read PRAKASH SINGH/AFP/GettyImages)
Credit: Prakash Singh

PATTA, Uttar Pradesh — This August, India's multibillion dollar Jaypee Group flagged off a sparkling, six-lane expressway.

The new roadway cuts in half the travel time from New Delhi to Agra, the city that is home to India's top tourist attraction, the Taj Mahal.

The company responsible for bringing Formula One racing to India last year, the Jaypee Group has never been short of ambition. Far more than a simple highway, the Yamuna Expressway project — which extends the suburbs of New Delhi deep into Uttar Pradesh — encompasses high-rise condominiums, universities and technical institutes, an exhibition center, a “sports city” of golf courses, cricket grounds and other facilities surrounding the Formula One speedway, as well as a second international airport to serve the capital area (yet to be built).

Moreover, its planners project that the promise of speedy travel will draw multinational firms like Honda, Daewoo, and Samsung — which already have factories in a township outside New Delhi called Greater Noida — deeper into Uttar Pradesh.

“The economic impact is going to be huge in the coming years,” said Sachin Gaur, chief financial officer of Jaypee Infratech, the unit that built the expressway.

“Uttar Pradesh, till now, was not developing as fast as it could. Today, with Agra just an hour-and-a-half away, slowly this entire area between Greater Noida and Agra will work like a satellite city for [the capital region].”

In a country plagued by woefully inadequate infrastructure, the project could well transform the economy of Uttar Pradesh, India's most populous state, and one of its least developed.

But despite the project's powerful potential, it took more than a decade to bring local stakeholders on board, acquire the land for the highway from farmers, and complete construction — illustrating both the challenges and the opportunities behind India's notorious infrastructure deficit.

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First announced by then-Uttar Pradesh Chief Minister Kumari Mayawati in 2001, the expressway was derailed when her government fell in 2003, resurrected when she regained power in 2007, and only came to fruition shortly after she was again ousted by elections this May. In the early stages, land acquisition proceeded smoothly — accomplished by the government on Jaypee's behalf, using India's laws of eminent domain.

But as the state sought to capitalize on the project by acquiring more farmland for development alongside the highway, the Yamuna Expressway became a flashpoint.

In May 2011, farmers from the village of Bhatta-Parsaul, about 50 miles from New Delhi along the planned highway, kidnapped three officials from the Uttar Pradesh State Road Transport Corporation in the area to conduct a land survey. A three-hour gun battle ensued when police moved in to rescue the hostages, and two villagers and two policemen were killed. After a number of farmers were arrested, the protest swelled. Violence continued, and the state deployed as many as 2,000 police to restore order.

Remarkably, the expressway was not derailed — though Jaypee was unfairly tarred for the conflict, which involves real estate acquisitions by the state-owned Yamuna Expressway Industrial Development Authority.

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“Bhatta-Parsaul is probably two to three kilometers from where the expressway was built up,” said Gaur, whose father, Jaiprakash Gaur, is the founder and chairman of the Jaypee Group. “When [the protest and police firing] happened, the entire land acquisition of the expressway was over two years before that. Just because the area was near the Yamuna Expressway, people linked it with Jaypee.”

Even today, farmers continue to demand a renegotiation of land prices, toll-free travel on the expressway, the construction of new underpasses to make it easier to pass from one village to another, and on and on.

The struggle for land

Land acquisition remains the largest hurdle to industrial development in densely populated India.

Over the past decade, opposition has mounted to government drives to create special economic zones for industry — which critics say netted billions of dollars for politicians and business tycoons at the expense of small farmers. But despite a bloody conflict in Nandigram and Singur, West Bengal — which was the catalyst for the end of the 30-year reign of the Communist Party of India-Marxist in that state — the government has yet to push through a land acquisition bill intended to streamline the process and ensure fairness.

On a recent afternoon in Bhatta-Parsaul, 60-year-old Saukin, a wizened farm laborer, was bathing in a vacant lot near the rutted village road. Shot in the shin bone by police during last year's altercation, he still wears a painful-looking steel brace on his withered leg, screws twisted into his tibia.

Pouring a bucket of water over his head, he propped his injured leg on a lawn chair in an attempt to prevent his bandage from getting soaked.

“I can't work any more, so the village people are supporting me, and my wife and daughters are working,” he said.

After he was shot, the government awarded Saukin with 50,000 rupees (about $1,000) in compensation, he says. But the operation to repair his leg cost double that amount, and the doctor is asking another 80,000 rupees to finish the job. A wealthier villager has floated him a loan, but it will accrue 3 percent in interest every month until Saukin gets back on his feet. And by that time, there may not be many farms left in Bhatta-Parsaul.

Along with more than 100 villages and towns, Patta has already sacrificed acres and acres of farmland to the state government. And though the ensuing residential and commercial developments are projected to create an economic boom, locals like 61-year-old Maumchand, a farmer who was forced to give up his 2.5 acre farm, fear their lives will never be the same.

“Many people will lose everything due to this expressway,” says Maumchand, who was once Saukin's employer.

The successful completion of the toll road could be an important milestone in India's long battle to improve its woefully inadequate transport infrastructure — the key to jumpstarting the country's moribund manufacturing sector and putting millions of people to work. But just as the opening of the highway promises hope for investors and developers keen to cash in on India's massive domestic market and the super cheap labor available outside its major cities, the story of Saukin and other villagers like him illustrates the tremendous challenge involved in transforming a country of farms into a country of factories.

“The big people and the government have taken this land by an emergency clause for industrial purposes, but they're selling it to builders for residential projects,” says another villager, who refuses to give his name, noting that several others who were involved in last year's protests are still behind bars.

“The economic boom will help rich people, not us. We will have to leave this place.”

Villagers say that the government paid land owners 880 rupees (about $16) per square meter in compensation for any land that was acquired for the project, which was arguably a fair price for isolated farm plots. But once those plots were lumped together, and the expressway neared completion, prices skyrocketed to 6200 rupees per square meter for residential property and 22,000 rupees for commercial plots, displaced locals say.

The promise of infrastructure

Across the expressway in Atta Gujran, though, villagers have already built two- and three-story homes with money they received for their farmland. Satellite dishes festoon the rooftops, and nearly every compound has an expensive new car parked out front. Farther down the highway, in the town of Tappal, a group of locals gathered outside a bank, are excited about the promise of new economic opportunities that comes with modern infrastructure.

“This area was totally undeveloped, really rural,” said Rang Lal Attari, a bald retiree dressed in a white kurta pajama and seated on a rope bed by the roadside. “Now some development will come here.”

According to a 2009 report on India's infrastructure problems by the consultancy McKinsey & Co., India then boasted one of the world's largest road networks, but only a quarter of its supposed “national highways” had even two lanes, and nearly 90 percent of India's highways are “structurally inadequate” to support the 11.2 ton per axle that trucks are allowed to carry.

Nothing much has changed in three years. A typical highway journey means plunging through yawning potholes and weaving around bullock carts, not to mention school children, working elephants and the odd farmer chasing a herd of rawboned cattle to market. So it's not surprising that transport delays cost Indian industry an estimated $725 million per year, according to a new report from the Ministry of Road, Transport and Highways.

“Before, traveling from here to New Delhi took six hours one way,” said Neeraj Sharma, a property dealer who has profited from escalating land prices. “Now, it takes four hours roundtrip. Property values have increased by more than 10 times.”

Because of the infrastructure deficit elsewhere, the impact here — and all along the expressway to Agra — could indeed be dramatic, according to experts like Parvesh Minocha, group managing director of Feedback Infrastructure, a consulting firm.

The expressway slashes travel time from New Delhi to Agra — where leather factories and other industries will benefit from the faster connection to one of the country's most lucrative markets. But, more importantly, it passes through one of India's richest agricultural zones and links area towns and villages to the Delhi-Mumbai Industrial Corridor — a $90 billion, dedicated freight corridor comprising 24 planned cities.

“Because of the corridor, the growth will probably be far more than it would be for a general road anywhere else,” said Minocha.

“I'm not only depending on the tourist traffic to Agra. That's only going to be a small component. Industry, freight, logistics — the connectivity for the rest of western Uttar Pradesh could actually grow very drastically, and therefore it could have a much bigger impact than one would have imagined even a few years ago.” 

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