With the domestic investors unwilling to put money in the infrastructure sector, particularly highways, the Government is now looking overseas to sell highways projects worth Rs1 lakh crore. The Centre is hoping to attract foreign pension and insurance funds to invest into the roads and highways sector. “We are trying to bring in foreign investors as they have shown interest in buying out our projects. We have projects worth Rs1 lakh crore, which need investment to pick pace,” said Nitin Gadkari, who was speaking at the Mindmine Summit in Delhi on Wednesday.
“We have gone to the Cabinet to seek permission to sell projects to foreign pension and insurance funds,” he said. Gadkari also said that raising funds from overseas is always better as interest rates are low, when compared to India. The Minister said that next month he will be visiting Japan and would seek its pension funds to invest in infrastructure in India. He also plans to go to the United States and Canada for raising funds.
“Before selling out projects to overseas companies, we will ensure that land acquisition and all clearances are in place to avoid any uncertainties and delays,” he added. He said the Government was targeting to bring overseas investments worth Rs5 lakh crore in road sector in five years and has already signed contracts for projects worth Rs1 lakh crore in the first year.
“The biggest question before the Government is to push growth engine,” he said, adding that when the NDA Government took over, projects worth Rs3.80 lakh crore were stuck for want of land, environment and forest clearances and railway over-bridges approval. He said the Road Ministry has gone to the Cabinet with regard to 26 projects which have technical problems. “Twenty-six projects have technical problems, we wanted to sell equity and have gone to the Cabinet. The problems will be solved by next month,” he said.
“We terminated 44 projects worth Rs1.05 lakh crore through golden shake-hands and have re-tendered the same. The Government’s constant efforts have resulted in forest and environment clearances to 80 stuck projects while Railways have given online approval to 85 over-bridges,” he said. The process for land acquisition has been expedited as well as the land acquisition cost which stood at Rs70,000 crore has risen to Rs1,80,000 crore now.
About PPP projects, he said given not so encouraging response for it, the Government has bid out 17 road projects on hybrid mode in which 40 per cent of the road project cost would be provided by the government and 60 per cent by concessionaires. Gadkari said his Ministry is committed to ensure at least two per cent growth in GDP through infrastructure sector.
He said by May 2016, the Ministry will achieve a target of building 30 kms of roads a day as against present 12 kms a day. “When the NDA Government took over, the road building pace was barely two kms a day which we will take to 14 kms a day by the next month,” he said.