September 17, 2009, New Delhi: To attract foreign investments in the roads and highways sector in India, Kamal Nath, the Minister for Road Transport & Highways, showcased the prospects of the Indian road sector to potential US investors in New York City. At the ‘Infrastructure Summit’, jointly organised by the ICICI Bank, JM Financial Consultants Limited and Confederation of Indian Industry (CII), the Minister elaborated the significant opportunities present in the Indian road sector. In addition to this, he also displayed the sector’s potential at various events jointly organised by CII, US-India Business Council (USIBC), United States Council for International Business (USCIB) and Morgan Stanley. According to the Ministry for Road Transport & Highways, the sector has a potential to add an incremental 2% to the country’s GDP growth rate. He stressed that India’s growth story is based on strong domestic fundamentals and so it is critical to strategise growth. Therefore, the Ministry has set a target of building 7,000 km of highways annually (20 km/day), which translates into a total investment of US$80 billion in the next 3-5 years. Out of this, US$45 billion is likely to come from the private sector. He informed that the work plan for 2009-10 is likely to cost US$20 billion.
Mr Nath invited the international concessionaires and contractors to participate in the construction of mega road projects in India, each involving a distance of about 500 km and is likely to cost around US$1 billion. The minister also discussed the creation of Expressway Authority of India, which would exclusively focus on the development of expressways in India. Besides, he discussed the areas of concerns with the stakeholders in the current Model Concession Agreement (MCA) and Request for Proposal/Request for Qualifications (RFP/RFQ) documents, and assured that corrective actions shall be taken at the earliest. Mr Nath stressed upon the requirement of capacity building among all stakeholders, including the consultants, concessionaires and even the National Highways Authority of India (NHAI).
The MD and CEO of ICICI Bank, Chanda Kochhar, highlighted the business opportunities available in India and stressed the facilitative role to be played by the government to make the National Highways Development Project (NHDP) viable and attractive to investors. She also stressed on the opportunities in the sector for financial institutions with innovative products such as tax-free bonds, take-out financing and securitisation, among others.
Mr Nath had earlier held similar road shows in Mumbai, Singapore, Zurich and London to showcase the potential of the Indian road sector to prospective foreign investors. The minister’s delegation comprised of officials from the Ministry of Road Transport and Highways, NHAI, CII, ICICI Bank and JM Financial Consultants Limited.
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