Private investment worth $40 billion needed to bridge road deficit: Nath

“This is a challenge which can transform India. Our infrastructure deficit stares us in our face and within the infrastructure deficit, the road deficit is profound”

The government is banking on the private sector for the bulk of the $60 billion investment needed for its ambitious five-year programme to fill the "road deficit", highways minister Kamal Nath said today, reports PTI.

"We require $60 billion, out of which $40 billion would come from the private sector," he told PTI.

Mr Nath, who recently visited the US, Japan and Malaysia, said global players are expected to bring in $10 billion for his much talked-about 20 km-a-day road building projects.

He saw no difficulty in raising resources for the highways, almost two-thirds of which would be toll-based, raking in Rs10,000 crore annually for the investors.

The government is also in talks with multilateral agencies for soft-funding the key infrastructure projects.

Commercial borrowings are also being used by the National Highway Authority of India (NHAI), he said.

"Resources are there from NHAI borrowings, the World Bank and the ADB. 60% of the roads are built under BOT," Mr Nath said, adding that foreign investors, particularly in the construction sector, are showing interest.

Mr Nath had announced a target of adding 35,000 km of highways under United Progressive Alliance (UPA)-II's regime. The NHAI has estimated its annual borrowings from the domestic and the international market at up to Rs20,000 crore for the next 15 years.

The ministry expects that the foreign players, which are presently on the margins, would become senior partners in the construction projects in the coming years. Private equity firms are also likely to show great interest in the sector.

Mr Nath said India offers a big opportunity for overseas investors. "With 33% growth in the automobile sector, highways offer a huge opportunity for the investors," he said.

The minister, who was rated as one of India's successful commerce ministers in the UPA-I government, said his present assignment is more challenging.

"In the previous job, even talking was progress, here talking is not progress. This is a challenge which can transform India. Our infrastructure deficit stares us in our face and within the infrastructure deficit, the road deficit is profound," he remarked.

The capacity to handle large-sized projects within the NHAI and among the domestic players was an area of concern, which would be getting his attention. "The most important task is capacity-building. You need to keep having substantial amount of work in progress," he said.

Mr Nath exuded confidence that contracts for construction of 12,000 km of roads would be awarded this fiscal.

The figure would double in 2011-12, as award of these projects would result in a large quantum of work being executed simultaneously, he said.



K B Patil

7 years ago

The arrest of some senior officials in NHAI is a clear pointer to the extent of sleaze in all departments of our govt. The arrest of the MCI boss, the CMD of a Coal India subsidiary, a tax official (found owning flats almost everywhere), the IAS couple found with truckloads of cash, the Ghaziabad PF scam, the spectrum scam all point to the fact that the administration is rotten. Yet, our PM without a moment's hesitation, during the recent present conference, says "AALL ISS WELLL." Of course Mayawati with her assets growing at an exponential rate will say, "MERA BHARAT MAHAAN". This country is indeed MAHAAN for these rulers, not for the middle class and the millions without proper food and shelter.

Shadi Katyal

7 years ago

It is interesting to learn that Mr. Nath is expecting 40Billions from outside and mostly from NRI. He doesnot tell us that how much will be pocketed and how much spent and what kind of aggregate and cement utilised etc.As we all know the rampant corruption .
One wonders why NRI will invest in their motherland when she treats them as enemy. Are we good for our money.
India is passing a bIll which will be retroactive that all NRI which has taken foreign citizenship must return their Indian passports and/or pay $175 fine.Does Mr. Nath not aware that this has created a storm of not recognising
this RETROACTIVE date. Where is one going to find his/her passport say 50 years old. Why not make it mandatory that those who have become citizen from 2009 should return such documents.
the other pity is that when first time one applies for Visa one is asked to send Indian passport and it has been returned.
This kind of bills donot leave a good taste and one starts wondering if there will be any return on investment or some Law will be formulated making some retroactive non payment.
When Oh When are we going to wake up and think of the NRI as patriots???

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