Published On: Wed, Apr 26th, 2017

India to Innovate on Models of Financing 105 Highway Projects

India is looking to reduce traffic congestion by building multi-lane roads and increasing the rate of national highway construction.  Minister for Road Transport, Highways and Shipping Nitin Gadkari said that enhancing the monetization of existing infrastructure to fund maintenance and the development of multi-modal hubs were also key goals. In the coming years, India will monetize 105 highway projects for about Rs 145,000 crore  as part of new innovative models of financing.

The traffic density in India is very high and the internal return on rates is very good, said the Minister of road transport and highways during a presentation on India Integrated Transport & Logistics Summit 2017 which will be held in New Delhi from May 3-5.

Now they require investments because there is no risk factor, Gadkari said that assuring of a good rate of return from highway toll collections.

Particularly, for new investment, there are a lot of innovative models, said Gadkari who also launched an international roadshow in Singapore yesterday for promoting National Highways Authority of India’s (NHAI) first rupee-denominated masala bonds aimed at upgrading the country’s highway.

The roadshow will continue in Hong Kong and London which is a visible sign of Prime Minister Narendra Modi’s commitment to the upgrade of public works, which is seen as critical to future economic growth.

The National Highways Authority of India (NHAI) is looking to sell 50 billion rupees ($775 million) worth of the offshore rupee-denominated bond in order to build expressways, economic corridors, bridges and tunnels.

He also highlighted NHAI’s AAA ratings and said that there are opportunities, they are very transparent and very committed to the progress.

Responding to financing and funding questions from delegates, the minister said that he would be using “100 percent of the National Investment Infrastructure Fund,” another innovative way of financing projects.

To drum up foreign investor interest in India’s road network, the second-largest in the world, policymakers have undertaken a slew of reforms, Gadkari said. Measures include a one-time fund infusion to revive stuck projects, a fast-track dispute resolution and a new model of public-private partnerships that offers lower risk for the private sector.

Innovative technologies, such as electronic toll collection and intelligent transportation systems, are also underway.

Among some of the challenging projects, Gadkari assured that Brahmaputra Express Highway will be developed as a national highway.

It will be the first highway project in the northeastern region which will be developed along the Brahmaputra river in Assam at an estimated investment of Rs 40,000 crore.

He assured that they are serious about it and they work on it and  declare it as a national highway.

Detailed project report is expected in about three months for the 1,300-km of highway, construction of which would be completed in about three years.

A new company has been formed for road construction in the North East, as connectivity in the North East is most important priority for their government, he said.

The government have sanctioned more than Rs 40,000 crore of projects and Gadkari is confident that within two years it would be Rs 1,50,000 crore of road construction in North East which is going to change the face of North East.

As part of a fiscal incentive package, New Delhi has granted 100 percent tax exemption for five years and duty-free import of specified equipment for highway construction.

Investors from more than ten countries already have stakes in various projects, including the U.S., Canada, China and Russia.

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