India loves megaprojects.
The country’s $90 billion Delhi-Mumbai industrial corridor is one of the most ambitious, expensive
endeavors in human history.
Completing 1,500 kilometers of new railway and more than 20 brand new cities will set
the stage for India to become a manufacturing superpower in the next two decades.
It’s so important I made a video all about it a couple years ago, it’s linked below.
Now, the corridor may be vital to India’s future economy, but it’s not the project
that will deliver the largest day-to-day improvement in quality of life.
Neither will a new mega-airport under construction in Mumbai, or World One—the largest residential
tower in the world, or even a 500 km high speed rail line planned for India’s west
coast.
No, the project Indians need most is more basic than all that: it’s hundreds of thousands
of kilometers of paved roads.
Like the rest of the world, the Indian people have fallen in love with driving.
But there currently aren’t enough reliable highways to hold all the cars in a country
of 1.3 billion people and growing.
The good news is that the Indian government has learned one of the key economic lessons
of modern history: that the not-so-secret ingredient of America’s dominance over the
last half century is our vast network of well-maintained streets and highways.
Roads allow us to move ourselves — and all of our goods — fluidly from city to city,
from fields to towns to air and sea ports, and beyond.
China learned this lesson a while ago.
They’ve spent tens of billions of dollars on roadways over the past two decades as their
economy boomed.
Now that its transportation infrastructure is maturing, the Chinese are positioned for
rapid development.
India wants to follow the same blueprint and is in the midst of a sustained, years-long,
multi-tens of billions of dollars megaproject to do just that.
India has about the same population as China, but double the density.
Get this, of the five most-densely populated cities in the world with more than four million
residents, four of them are in India, including the planet’s most crowded megacity, Mumbai.
So with much less land to work with, India’s challenge will be expanding, modernizing,
and widening its existing network of roads, which, on the plus side, is already quite
extensive.
On the downside, 40% of it is dirt.
Without good roads, the country is less unified because its people and goods can’t move
around freely enough, especially to and from rural areas.
Currently, national highways connecting major cities with ports and rail junctions carry
40% of all passenger and freight traffic, but make up just 1.5% of the total road network,
leading to horrible traffic congestion on these crucial arteries.
One of the new roads in the megaproject that’s already completed is a $2B expressway that
slashed the travel time between Delhi to Agra by up to four hours.
But barbed wire fencing all along the route keeps it clear of the people and slow-moving
vehicles that crowd the rest of India’s roads, and high tolls mean it's used only
for the rich.
This undercuts the whole purpose of the road: to alleviate congestion on the rest of the
roads.
The predictable result of this segregation is that the highway is being used far less
than it should be.
Challenges like this will need to be addressed and overcome by the government of Indian Prime
Minister Narendra Modi who’s a big fan of megaprojects, and has maintained his commitment
to the ambitious goal of completing 18,500 kilometers of controlled-access highway.
One of the main obstacles to achieving this vision is that the megaproject suffers from
chronic underfunding and the disappointment of only reaching about half its construction
goals, year-after-year.
Part of the problem that’s holding it back is the financing model, which is flawed.
Using Public Private Partnerships to build toll roads doesn’t work if the road’s
profitability is depressed because not enough people can afford the expensive access fees.
Potential investors see this and are scared away—no firm wants to sink significant time
and capital into a project that will lose it money.
This means the national government is having to get creative with its funding mechanisms
and coming up with more funds than it anticipated to jump-start each construction project.
Compare this to the way the Chinese operate.
As an authoritarian country, a single political party controls the entire government, allowing
it to push projects through and spend money as it pleases, sometimes in a brutally efficient
way.
The government of India, the world’s largest democracy, can’t operate like that.
But while China, India’s continental rival, may have leapt ahead in its rate of completion
of a mega-network of highways, it has yet to face the inevitable reckoning of a messy
transition to democracy.
With a people who are much freer, on this front, the Indians are miles ahead of the
Chinese.
Now, they just need to build themselves enough open road so their economy can hit top speed.
Thanks for watching.
You guys really seemed to appreciate our compare-and-contrast of the first 100 days of the Obama and Trump
presidencies.
Now that that milestone is in the books we can really use their actions to compare exactly
what they’re all about.
For The Daily Conversation, until next time, I’m Bryce Plank.