USD 21 billion loss due delays on roads: IIM Study

Delays at check posts and state borders for documentation checks and payment of various fees and taxes leading to a loss of over USD 21 billion per year.

Published: 07th June 2016 09:27 PM  |   Last Updated: 07th June 2016 09:27 PM   |  A+A-

By ENS

NEW DELHI: Delays at check posts and state borders for documentation checks and payment of various fees and taxes leading to a loss of over USD 21 billion per year, said an IIM study released today.    

The study to access operational efficiency of freight transportation by road by the Transport Corporation of India (TCI) and IIM Calcutta covering 28 routes was released by study Union Transport Minister Nitin Gadkari.

The survey analysed the problems and prospects of multimodal transportation and the effect of seasonality on freight transportation by road in India. It found that the cost of delay was USD 6.6 billion per year and the cost of additional fuel consumption due to delay was USD 14.7 billion per year.

A comparison of the survey data for the years 2008-09, 2011-12 and 2014-15 shows that while the average vehicle speed have improved over the years, the average mileage of vehicles has remained almost the same.

Done by Subrata Mitra, Professor of Operations Management, IIM Calcutta, it favours early introduction of a uniform Goods and Services Tax (GST) to reduce paperwork and check post delays, potentially saving billions of US dollars in delay costs, additional fuel consumption cost due to slow vehicular speed and idling at check posts.

"Delays at check posts and state borders for documentation checks and payment of various fees and taxes need to be minimised by reducing paperwork. Appropriate actions need to be initiated against unnecessary on-road police intervention and harassment. The Government needs to make an all-out effort to mitigate on-road delays and improve vehicular fuel efficiency so that transportation costs can be significantly minimised," said the study.

While the construction of highways in the country has taken pace in last two years, the study found that the development of new roads has not been able to keep pace with increasing freight volumes and passenger traffic since Independence, creating infrastructural bottlenecks.

""Therefore, the needs of the hour are to build new roads faster, widen existing roads and improve road conditions through periodic maintenance," it said.

The length of national highways/expressways was a meager 100,087.08 km, or about 2 percent of the total road length network, even as they carried 40 percent of the road traffic. Government plans to double the national highways in next 3 years.

While there is an increased dependence on multimodal transport across the globe, the study said that in India, the scope of multi-modal transportation remained limited, given that most of the freight was carried by roads and the rest by railways.

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