The Minister for Road Transport and Highways, Shri Kamal Nath, has said that in the next 2 years India will build more highways than any other country in the world. Inaugurating “Building India: Road Infrastructure Summit” at Zurich, he invited European investors to invest in the road and highways sector in India. He stated that India as a nation is determined to build a comprehensive high-quality infrastructure. The next decade will be considered as the decade of infrastructure sector, like the last decade had been the decade of IT.
Stressing on the strong fundamentals of the Indian Economy, he said India is a safe destination for investments even in times of recession. Mr Nath showcased the opportunities and potential of the Indian road sector to investors from across Europe at the Investors road show, jointly organized by Confederation of Indian Industries (CII), ICICI Bank, J M Financial Consultants Ltd. and Swiss-Indian Chamber of Commerce. Addressing a strong gathering of investors, developers and financial institutions, he said that the government is back with an enhanced mandate, with infrastructure being one of its important focus areas. Emphasising on the huge potential of road development in India, he said, traffic is increasing rapidly at an annual rate of 7-10% in the country and so is the number of automobiles. On the country’s automobile growth, Mr Nath said that Indian companies are launching new models, while automobile companies around the world are facing difficulties. To cater to these increasing numbers, he said, more roads would be required.
Elaborating on the new vision on road sector, Mr Nath said that the government is committed to increase the pace of highway development to 20 km per day. This would unleash huge business and investment opportunities, amounting to $70 billion over the next 3-4 years. In addition, this would lead to an inclusive growth and provide connectivity to all stakeholders in socio-economic development. Inviting investors to be a partner in building road infrastructure in the country, he said that out of the total investment required, $40 billion are expected to come from the private sector.
To handle the road development programme of this magnitude, Mr Nath specifically mentioned some of the initiatives that the Government of India (GoI) is undertaking to build capacity of National Highways Authority of India (NHAI). He also highlighted the need to expand the capacity of construction and consulting firms.
Responding to some of the queries, he said that the government is more than willing to review the model concession agreement to allay the concerns of investors and developers and provide them the much needed comforts. The clause for termination during construction was also highlighted as a major concern by the lending institutions that are interested to invest in the Indian road sector.
Road development should not be merely viewed as asset creation – it also requires service orientation. There is a need to structure the road development programme in such a fashion so as to provide maximum amenities and safety to users, Mr Nath added.
Investors and developers, who attended the meeting, greatly appreciated the efforts, commitment and the policy structure that has been put in place to attract foreign investments in the Indian road sector. Brahm Dutt, Secretary of the Ministry of Road Transport & Highways, briefed the investors on the major policy initiatives undertaken by the government such as MCA, RFQ, RFP, Standards Manual and the definition of a Minimum Project Size being 100 km and Rs 5,000 crore.
During his visit to Zurich, the minister also addressed a round table on the road sector, organised by the World Economic Forum. He had a frank and free discussion with investors on some of the challenges, including long-term debt financing, realistic costing of projects with market rates instead of schedule of rates, dispute resolution, bidding parameters, sound DPR’s and feasibility reports and the need for dedicated road contractors. All clearances should be taken together, instead of separately, as in the present case, so that construction could start quickly.
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