Dudley, Ambani meet Modi, talk about Gujarat plans
Before moving to a closed door meeting with the Gujarat chief minister Narendra Modi, BP global chief executive Bob Dudley, along with RIL chief Mukesh Ambani reiterated their future investment plans in the state.
On the other hand, Dudley hinted at hoping for better market-based price for natural gas even as he met the Prime Minister a day before to seek clarity on gas policy.
While BP is working with Indian Oil Corporation (IOC) for setting up an acetic acid plant in Gujarat, the BP-RIL joint venture has submitted proposal for Gujarat State Petronet Corporation (GSPC)'s LNG terminal in the state.
Speaking at the third convocation of Pandit Deendayal Petroleum University (PDPU), Dudley said, "It is one thing to have the right resources below the ground, it is another to have the right conditions above the ground. Here in India we have seen welcome moves for creating investment friendly conditions enabling legislators to place regulations in the right place and we hope to see more vibrant domestic energy sector evolve. In particular, we hope to see continued progress towards a market based price for natural gas which will help release domestic production, reduce imports and improve trade balance."
The PDPU convocation saw Dudley, Ambani and Modi sharing dais, following which it has been learnt that the trio had a closed door meeting on Gujarat's role in BP and RIL's future plans.
When asked about his views on the gas price issue, Dudley said, "Yesterday we had a lot of meetings in Delhi. The minister (of petroleum) will talk about (gas prices); I am here to talk about Gujarat."
Talking about BP's Gujarat plans, Dudley said, "Gujarat emphasises how the above ground factors largely based on good policy can make a major difference into lives of many people. Gujarat too features prominently in our growth plans as we are hoping to set up one of the world's largest acetic acid plant here in the state."
Dudley elaborated that BP was working with Indian Oil Corporation (IOC) for an acetic acid plant of a capacity of over million tonnes at an investment of over a billion dollar near IOC's Koyali refinery.
"In addition, we are also looking at LNG re-gasification here with Reliance in Gujarat. We are one of the few companies who have submitted a proposal for a LNG terminal and re-gasification here," he added.
It needs to be mentioned here that the BP-RIL joint venture has bid for GSPC liquefied natural gas (LNG) terminal in Gujarat.
"There has been a bid process that GSPC have gone through and we are one of the three shortlisted players and right now we are going through some due diligence," said Sashi Mukundan, region president and head of country, India, BP Exploration (Alpha) Ltd.
Stating certain statistics on energy needs, Dudley said that there will be a rise in demand for energy of another four billion tonnes of oil equivalent or an additional 35 per cent by 2030 and that's just 17 years away.
"And that is like adding seven new Indias to world energy production. We should recognise that rise in energy production also results in rise in carbon emission which makes energy conservation really important. Which is why, I am glad BP is involved with RIL in increasing India's supply of natural gas. We expect India's own energy consumption to more than double over the next 20 years," he added.
Hettich sets up unit in Gujarat, to invest Rs 400 crore more
Hettich India, the 12-year-old equal-stake joint venture between Saroj K Poddar’s Adventz Group and Germany’s Hettich Group, will invest Rs 500 crore in India over the next five years as it bets on the booming furniture market in the country.
The investment includes a facility to make wire baskets at Vadodara, Gujarat, which would be inaugurated today.
“The unit in Vadodara is our first manufacturing project with an investment of Rs 100 crore.
There are 10,000 products in the Hettich line and we have started producing one,” S K Poddar (pictured), chairman, Hettich India, said.
The company would spend another Rs 400 crore for expanding the operations and plant, which would also serve as a export hub.
Hettich is one of the world’s largest manufacturers of furniture fittings, with a turnover of over $1.2 billion and presence in 110 countries.
“Over the next five years we are hopeful of adding four to five product lines at our Vadodara facility,” Poddar said, adding the joint venture has grown at compounded annual growth rate of 41% over the years.
The Indian unit is Hettich’s second biggest subsidiary outside of Germany.
Andreas Hettich, global CEO of Hettich, said, “India is a growing market and per capita consumption of furniture in the country is expected to increase in line with the western world. We see a very bright future here and are investing substantially to develop the market. Besides, India has the potential to become a very efficient base for servicing our nearby growing markets in South Asia and Middle East.”
The domestic modular furniture market is estimated to be Rs 4,000-5,000 crore, growing at 15-20% annually. The size of furniture fittings industry is pegged at Rs 3,500 crore, growing at 15% annually.
Zuari to sell Mangalore Chemicals stake
Saroj K Poddar also spoke about plans of other group companies.
On Vijay Mallya’s plans to buy Zuari Fertilizers’s stake in MCFL
I don’t have the answer today as I bought the shares in consultation with Vijay Mallya. After some discussions with him, I cannot say that we had any agreement and I agree with him on that front. We have been old friends and will continue to be. The fact is we had some understanding to work together and he is well within his right to chase that understanding. Whatever he decides, we will move according to that. I have the first right on his shares, he doesn’t have the first right on my shares. If he does not wish to divest or enter into a joint venture then the only alternative for us is to divest and we will do that to the highest bidder as I have to look after the interest of my shareholders. So whoever gives me the best price I’m obliged to sell.
Zuari Fertilizers’s investments in new projects
Zuari Fertilizers will be investing of Rs 5,000 crore in a new project in Ras El Khaimah, UAE. This will be to manufacture phosphates.
On expansion and new partnerships in the rail sector
We are looking at some strategic joint ventures, especially on the technology front with global multinational companies especially in the rail sector — locomotives, metro coaches, coaches, specialised accessories, etc.
Being one of the largest private sector companies (Texmaco) for the rail sector in India, we will be looking at the entire gamut of railway products. Today 25% of all Indian wagons are made by Texmaco.
Real Estate in Ahmedabad Backed by Infrastructural Developments and Low Prices by Anuj Gupta
Real Estate in Ahmedabad Backed by Infrastructural Developments and Low Prices by Anuj Gupta
In spite of being considered a tier-1 city, the property rates in Ahmedabad are lower than others like Chennai, Mumbai, or Delhi. The face of the city is undergoing a transformation in terms of rapid commutation infrastructure and construction of multi-level buildings on large scale. Several RTS(Rapid Transit System) projects are in pipeline, and they are intended to bring about better and quick connectivity among different localities, and to other cities as well. This, ultimately, has affected the real estate market in the city. The increased number of inquiries for residential properties clearly indicates that.
If real estate in Ahmedabad is considered in the peripheral areas, we see that they are undergoing tremendous progress in terms of residential infrastructure. The borderline localities like Chandkheda, Gota, Gandhinagar, Chandlodia, Jagatpur, Vastrapur, Vejalpur, Satellite, and Motera. being located near Sarkhej-Gandhinagar Road(S.G.Road), have seen an increase in property demand. More investors have been looking forward to put their money in these localities. These along with areas of East Ahmedabad are making considerable growth in their realty markets.
Till now, this city was witnessing more of horizontal constructions, but now, the vertical dimension has taken the center-stage. The builders are coming with 22-storey high-end structures, and most of these projects have been purposely planned near BRTS corridor. The authorities have given nod to the construction of skyscrapers as high as 72m over roads that are more than 60 m in width. With the upcoming Metro Project, the real estate property in Ahmedabad is estimated to bring about better connectivity across east and west parts of the city.
The prices, in spite of appreciation in several cities, are still lower than other tier-1 cities. And this is true in case of many peripheral locations like Naroda, S.G.Highway, Narol, Vejalpur, Gandhinagar, to name a few. A 2 BHK apartment in these areas are available below 20 lacs. Some of the affordable localities are Ghatlodiya, Gota, Vasna, Khokra, and Vejalpur. The highest rate for the same two-room apartment can go as high as 45 lacs. Localities like Satellite, Maninagar, Prahlad Nagar, Vastrapur, Vastral, Ambawadi, Gurukul, Pladi, Mem Nagar, Naranpura have the flats as pricey as 50 lacs to 1 crore.
The city's realty market thrives largely on the plenteous of textile mills, companies, and automotive giants. Tata's Nano plant gave it a global recognition. In 2002, NASSCOM ranked Ahmedabad fifth in the list of Super Nine Indian Destinations for IT. The software sector is proliferating, with companies like TCS having forayed here already.
Investing in Ahmedabad and Vadodara real estate
Oct 23, 2013, 10:00AM IST
Ahmedabad and Vadodara are among the most-preferred destinations for real estate investing in Gujarat. Here is a snapshot of how these cities have been treading.
Ahmedabad: It is largely due to the SP Ring Road and Bus Rapid Transit System (BRTS) projects that the peripheral areas such as Motera, Chandkheda and Koteshwar are gaining attention from investors and home buyers alike. These distant areas have become accessible due to these infrastructure projects, which connect them with major parts of the city.
The other areas which are receiving a good response from buyers include Prahlad Nagar, eastern Ahmedabad and localities towards Gandhi Nagar. As far as preference for the size of property is concerned, it is mainly for 2-3BHK category, with home buyers mainly looking for properties which are likely to be delivered within one year.
A 1,000-sq ft apartment in a multi-storey building in Vadodra is generally available in the range of Rs 22-45 lakh in these areas. “This market has an excess of supply and resale prices are now 15-20 per cent lower than the prices listed by developers. Therefore, it is a good time to invest for those who had missed the bus,” says Sandeep Katiyar, chief executive officer, Century 21 India.
Moreover, the Metro Rail project will open up many new areas in Ahmedabad in the coming years. According to Eric Shah, director, Sangath Infrastructure says, “the Metrolink Express projects will be the biggest game changer for Ahmedabad as well as Gandhinagar.” The project will cover 83 km connecting the Eastern and Western sides of the city as well as Gandhi Nagar.
Vadodara: Located 140 km from the state capital Ahmedabad, Vadodara is the third largest city in Gujarat, after Ahmedabad and Surat. The real estate market in the city is picking up gradually. Towards the Eastern side of the city, residential real estate projects around the Waghodia Road are generating enquiries from users. Gotri, on the other hand, in the western side of the city is observed as a hotspot for home buyers.
According to Abhijit Bhagwat, vice president, Vadodara Realtor Association, “Investor activity in Vadodara real estate market has reduced by more than 80 per cent in the past 5-6 months. Most transactions are undertaken by end users today.” A 1,000 sq ft apartment in a multi-storey building in these areas is usually available at Rs 20-25 lakh.
Bhagwat further informed that flyover projects such as at Fatehganj will help boost the real estate market in a major way. These under-construction projects will ease traffic congestion during the peak hours and thus, improve the market in a major way.
The city is also expected to get approval on the Mumbai-Vadodara Expressway, which will be built at an estimated cost of Rs 19,000 crore.
SG ROAD EMERGING AS VALUE FOR MONEY DESTINATION
There are many factors that are working in favour of this location, indicating a decent appreciation in the future
When Deepika Shettigar bought an apartment at the rate of Rs 3,500 per sq ft along SG Highway in Ahmedabad last year, friends laughed and many unwanted suggestions came her way, as if she had made the biggest mistake
of her life. So much was
the criticism that she
even started wondering whether she had made one of the most glaring investment blunders of her life. It was, after all, a question of having invested her entire life's savings.
Critics had their reasons to believe that this bank employee had made a mistake in choosing the wrong property, in the wrong location, if not at the wrong time too. The market had started softening up and the apartment along SG Highway that was only until recently being sold at the rate of Rs 4,000 per sq ft, had reduced to Rs 3,500 per sq ft. To add to it, many reports indicated that it was only the beginning of an inevitable price crash and the true value of her apartment could be less than her purchase price, very soon.
However, one year down the line, Shettigar is smiling her way to the bank as the value of her apartment has gone up to Rs 4,200 per sq ft and some properties in the vicinity are even selling at Rs 4,500 per sq ft. She believes that if this has been the appreciation during a slowdown, she can book a sizeable profit once the market is back to its peak level.
Analysts believe that the Sarkhej-Gandhina g ar Highway, popularly known as SG Road, that connects Ahmedabad with Gandhinagar, has huge potential. It is a major artery of commerce and public transport and is witnessing a major construction boom along its route to Gandhinagar.
The location has emerged as a developed hub for entertainment and the corporate segment, and already, the presence of multinational corporations is fuelling economic activity that has a chain effect on the demand for residential units. Many malls have come up on SG Road, anchoring multinational brands. All the international car showrooms are located on this road. ISCON Mega Mall, Gujarat's largest mall, is arguably one of the main attractions in this area.
The highway was primarily built as a means of bypassing the city of Ahmedabad. However, in course of time, the cheap land prices attracted retail brands to be located here. Presently, the prices of land in this area are higher even compared to the city area. Gujarat's tallest commercial property is located on SG Road. With such strong fundamentals, the property prices in the location are destined to go only one way, and that is up.
A candid Shettigar agrees that even she did not have all the facts in hand before deciding to invest in a property along SG Highway. However, proving her detractors wrong, this market has given her the value for money that is making many prospective home buyers consider investing here. The property rally, many believe has just started for this location.
THE LOCATION HAS EMERGED AS A DEVELOPED HUB FOR ENTERTAINMENT AND THE CORPORATE SEGMENT AND ALREADY, THE PRESENCE OF MULTINATIONAL CORPORATIONS IS FUELLING ECONOMIC ACTIVITY THAT HAS A CHAIN EFFECT ON THE DEMAND FOR RESIDENTIAL UNITS.
Ashram Road: On the highway to appreciation
The locality is offering very good rates right now, making it an ideal time to buy
Ramnath Naik had gone on a house hunting spree on Ashram Road of Ahmedabad last year. The price was in the range of Rs 5000-5500 per sq ft and hence, out of his budget at that point of time. He arranged for funds and went back to check the property prices, with the apprehension of being disappointed again with the perceived hike in prices since then; however, he was pleasantly surprised. Not only have the prices not gone up, rather, they have gone down to Rs 4000-4500 per sq ft for the same properties. However, these property prices came with a suggested rider by the broker - take it now or miss the special rates.
Clueless, Naik was wondering whether there was a price correction or was it just a special festive offer. Many prospective buyers in the area are today suffering from this same anxiety, even though the location is one of the best that the city can offer. There are more reasons for buyers to be apprehensive now - will the prices crash further and make their lifetime's investment go waste? After all, even the end users in the property market are always apprehensive of appreciation potential, or the lack of it, even if they buy it for a long time stay. However, the investment psyche of home buyers is such that nothing but a sizeable appreciation, even if they never sell it, is what matters to them.
Analysts believe that such apprehensions are born out of not understanding the fundamentals of the property market in general and Ahmedabad in particular. Since the property prices have softened a bit from the peak of the property rates rally that sustained momentum in select pockets of Ahmedabad in late 2011, an outside view is giving the impression of a price crash. As a matter of fact, some of the premium lost is making the properties look even more attractive in the region.
What makes the story of Ashram Road all the more attractive is the fact that even during the worst fall of 2012, the property prices kept hovering around the present scale. This is indicative of the fact that if bought now, properties on Ashram Road have promise to give a sizeable appreciation in the next cycle of boom.
Moreover, the festive spirit has curtailed the developers' urge to hike prices and hence, the property in the locality
will never be as attractive as now for buyers. Developers too are looking to sell inventory and move to new projects and collectively, this means that the region will have more pockets of growth in the future, leading to prices of properties going up in the near future.
Since the location has a good mix of both residential and commercial developments, it has the inherent potential to add value as against the locations having only residential or commercial developments. Now that may be a reason why the Ashram Road property segment is poised for appreciation. For an average buyer like Naik, this puts a full stop to the dilemma of now or never.
Analysts believe that such apprehensions are born out of not understanding the fundamentals of the property market in general and Ahmedabad in particular.
10 times rise in Gujarat's non-operational textile mills
Sunday, Oct 27, 2013, 13:07 IST
Gujarat was once considered the hub of India’s textile market with Ahmedabad known as the ‘Manchester of the East’ leading from the front. However, the state is slowly turning into a land of non-operational textile mills.
This has been found in the latest Assocham report which states the number of non-operational textile mills in Gujarat has increased 10 times between 2000-01 and 2010-11 from 290 to over 2,800. Due to this, over one lakh people have lost their jobs in the last decade.
The state has registered maximum growth about 39% CAGR in the non-operational textile units followed by Punjab (35%), Haryana (32%), Himachal Pradesh (26%) and Tamil Nadu (25%), which also registered the maximum number of factories being closed down.
About 30% of the total textile factories across India remained non-operational during 2000-2010 with Tamil Nadu having over half of them, according to a recently concluded study by the Associated Chambers of Commerce and Industry of India (Assocham).
“Of the total 17,987 textile factories across India, about 12,688 factories were operational and about 5,300 were non-operational as of 2010-11,” according to a study titled ‘State-wise assessment of textile sector & recommendations’.
The total number of textile factories grew at a compounded annual growth rate (CAGR) of about 5% during the decade of 2000-01 and 2010-11, said DS Rawat, national secretary general of ASSOCHAM while releasing the findings of the study.
“The non-operational textile factories grew at a whopping 23%. On the other hand, under operation of textile factories grew at a CAGR of a meagre 2%,” he said.
Stating reasons, the study says that low productivity, lack of advanced manufacturing technology, lack of foreign investments, supply chain bottlenecks, lack of economies of scale, labour-related challenges, issues arising due to a fragmented industry and weak brand positioning are certain key reasons for non-operation of textile units.
“Increased domestic competition coupled with competition from global players and high initial investment cost for state-of-the-art production facilities are other emerging challenges being faced by the Indian textile industry,” said Rawat.
The share of jobs lost due to non-operation of textile factories in India has increased from over 6% to about 42%. “This is a matter of grave concern as the organised textile sector apart from creating significant number of jobs of over 14 lakh, it also contributes about 4% to the GDP and 10.1% to the total exports earnings,” added Rawat.
BP to construct world’s largest Acetic Acid Plant in Gujarat
10/25/2013 at 10:41AM
British Petroleum’s (BP) Chief Executive, Bob Dudley and Reliance Industries Limited’s (RIL) Chairman, Mukesh Ambani met with Gujarat Chief Minister Narendra Modi behind closed doors on 19th October. The trio held discussions over investment plans for Gujarat by the RIL-BP joint venture. Before the meeting however, the three shared the stage at the third convocation of Pandit Deendayal Petroleum University (PDPU) during which Modi, Dudley and Ambani reiterated their future investment plans for the State.
Speaking at the convocation, Dudley said he hoped for a better market-based price for natural gas. “It is one thing to have the right resources below the ground; it is another to have the right conditions above the ground. Here in India, we have seen welcome moves for creating investment-friendly conditions enabling legislators to place regulations in the right place and we hope to see more vibrant domestic energy sector evolve. In particular, we hope to see continued progress towards a market-based price for natural gas which will help release domestic production, reduce imports and improve trade balance.”
Dudley also remarked on the rising energy needs and said that there will be a rise in demand for energy of another four billion tonnes of oil equivalent or an additional 35 per cent by 2030, which is just 17 years from now.
On the subject of BP’s plans in Gujarat, Dudley said, “Gujarat emphasises how the above-ground factors largely based on good policy can make a major difference into the lives of many people. Gujarat, too, features prominently in our growth plans as we are hoping to set up one of the world’s largest acetic acid plants here.
Dudley stated that BP is working with Indian Oil Corporation (IOC) to set up an acetic acid plant in Gujarat with a capacity of a million tonnes at an investment of over $1 billion dollar near IOC’s Koyali refinery. This news comes on the back of the BP-RIL joint venture submitting a proposal for Gujarat State Petronet Corporation (GSPC)’s LNG terminal in the state. “In addition, we are also looking at LNG re-gasification here with Reliance in Gujarat. We are one of the few companies to have submitted a proposal for a LNG terminal and re-gasification here,” he added
The BP-RIL joint venture has bid for GSPC’s liquefied natural gas terminal in Gujarat. “There has been a bid process that GSPC have gone through and we are one of the three shortlisted players and right now we are going through some due diligence,” said Sashi Mukundan, region president and head of country, India, BP Exploration (Alpha).
RAVI SINHA takes a look at the various infrastructure projects in Gujarat and the impact that they are likely to have on the real estate market in Ahmedabad
At a time when developers across the major property markets of India, such as Delhi and Mumbai, are complaining about poor infrastructure, Ahmedabad is probably the only major city where developers are not. With the government focusing on investment and improving infrastructure, Ahmedabad and other cities in Gujarat, like Vadodara, are poised to grow vertically, as well as horizontally.
Large projects, including the proposed Special Investment Region (SIR) at Dholera, the Petroleum, Chemical & Petrochemical Investment Region (PCPIR) at Dahej, the Gujarat International Finance-Tec City (GIFT) in Gandhinagar, the Metro-link Express for Gandhinagar and Ahmedabad (MEGA) and the Delhi-Mumbai Industrial Corridor (DMIC) are poised to transform Gujarat's industrial scenario. These developments are expected to have a positive effect on the real estate sector, as well.
The state has also approached the Cabinet Committee on Investments (CCI) for urgent intervention to expedite projects worth Rs 1.1 lakh crore, promoted by top Indian and global companies, such as Reliance Industries Ltd (RIL), Shell, Essar Group and Adani Ports. These projects have been awaiting environmental clearances from the centre for over three years.
The expansion plan for RIL's marine operations at Jamnagar (worth Rs 8,800 crore), the Mumbai-Vadodara Expressway (worth Rs 19,000 crore) and investments in the DMIC (worth Rs 43,000 crore) are among the projects waiting for a green signal from the Ministry of Environment and Forests (MoEF). These are some of the initial list of 17 projects for which the state is seeking a fast-track resolution with the MoEF.
From a real estate point of view, the importance given to roadways in Gujarat is noteworthy. The state has completed 18 road projects worth Rs 2,081 crore and six projects amounting to Rs 2,925 crore are under implementation. It has four projects in its pipeline and an equal number in a bidding stage. On the urban development front, as many as ten projects worth Rs 3,600 crore in various sectors are under bidding stages. The state has completed six projects worth Rs 1,408 crore and the government is also likely to undertake 20 projects at an investment of Rs 4,000 crore in the coming years. In the aviation sector, the state has envisaged six projects worth Rs 2,500 crore.
Dhaval Ajmera, director of Ajmera Realty & Infra, maintains that real estate growth and infrastructure development are two sides of the same coin. "The realty market in Ahmedabad is witnessing change. From apartments and townships, the focus and demand has slowly shifted to villas, second homes and rowhouses. This inevitable change has given the city a feel of luxury living," says Ajmera.
Sam Chopra, chairman of RE/MAX India opines that Ahmedabad has planned development, unlike other cities in India.Ahmedabad has very good storm water drainage, future-ready ring road system, award-winning bus rapid transport system (BRTS) and stable power supply, among a host of other things that provide a solid foundation for growth. "Ahmedabad will need investments in public transport. It is on track to get MEGA-the metro train which will link BRTS and the regional rail network. Apart from infrastructure, Ahmedabad needs a good IT industry, to make it a truly metropolitan city," explains Chopra.
Government data shows that 13 projects are waiting for clearance under the coastal regulation zone norms. These include Adani Ports and SEZ Limited's Rs 9,000-crore project to construct a crane roll-on jetty at Mundra, a Rs 2,800-crore project to double the capacity for importing liquefied natural gas at the Hazira LNG terminal owned by Shell and Total and similar port expansion plans of Reliance and Essar worth over Rs 16,000 crore. The pace of development is likely to receive a major fillip, once all the infrastructure projects are cleared on a fast-track basis. The real estate markets in Ahmedabad and Vadodara have not reached a peak where saturation is imminent. Analysts, therefore, are bullish on these property markets.
Once the pending infrastructure projects are completely rolled out, the market will rally to its real growth potential. It will be an ideal time to invest in the realty market in this region (The writer is CEO, Track2Realty)
Gujarat's Good Road: Ambitious Dahej-Ghogha project to shorten travel time by 300 km
Gujarat's Good Road: Ambitious Dahej-Ghogha project to shorten travel time by 300 km Oct 27, 2013, 00:07AM IS
The ambitious Dahej-Ghogha roll on-roll off (ro-ro) ferry project linking Saurashtra and South Gujarat is expected to be ready in the next six months. The project is being developed by Essar Pvt. Ltd. The project is expected to provide relief to thousands of locals after its completion.
Till now, people of Saurashtra had to travel to Ahemadabad to reach Surat from Saurashtrra, after the completion of the project the journey will be cut short by a distance of 300 km.
The project was inaugurated by Gujarat Chief Minister Narendra Modi in January 2012, on the occasion of India's Independence Day. The project is expected to be complete by January 2014.
The bridge constructed over Arabian Sea will shorten the journey from present seven-and-half-hour to one-and-half-hour.
The length of the present route- from Ghogha (Bhavnagar)- Dahej (Bharuch) is 340 km and it takes seven and half hour to complete the journey- will be shortened to 40 km and will take one-and-half-hour to complete the journey.
The expressway will be solely meant for passengers vehicles only. As per the plan, 100 to 150 other vehicles will also ply on these roads.
The news project is expected to take off the burden from other major highways as well. Absence of small vehicles will allow heavier vehicles to ply at high speed and considerably reduce the accident rate.