Even as the private Indian developers continue to be wary of putting money into road building because of past losses due to a host of issues, including mandatory clearances, foreign investors are beginning to show interest in road development.
After Japan offered to help construct roads in the North-East, Malaysia has also come forward to fund road building projects in Rajasthan.
Soon after the new Government took charge this May, Minister for Road Transport and Highways Nitin Gadkari initiated the setting up of a corporation to generate funds for road building projects in the country as the road sector was in a financial mess.
“Since the private investors, namely the Indian banks and other financial institutions were not coming forward to fund projects, the Government had set up an independent financial corporation to find investors both in the domestic as well as international markets,” said an official in the Ministry of Roads.
“Government allowed foreign investors to buy stake in a Corporation formed by the Road Ministry. After holding several rounds of talks, the Government also offered 26 per cent stake in the Corporation in lieu of funds to the tune of Rs 1 lakh crore. Now we are beginning to see some interest from foreign nations,” Gadkari had said.
In the last week of September, Japan had offered help to India in building road infrastructure in strategically important North-East. Japanese Minister for land, Infrastructure and Tourism Akihiro Ohta during his meeting with Road Transport and Highways Minister Nitin Gadkari in the National capital extended his support.
Ohta had said that Japan could “actively contribute” in building such infrastructure in the North-East States as they have expertise in building roads in mountainous terrains.
He had said that Japan had the technology for tunnel building, reinforcement and the required skill and know-how of making roads in very narrow spaces. Japan International Cooperation Agency (JICA) is already carrying out a study in the North-East to study the topography and climatic requirements.
Japan has promised 3.5 trillion Yen ($ 35 billion or Rs 2,10,000 crore) to India through public and private funding over five years for various works, including building of infrastructure.
Earlier this week, the Malaysian Government offered to make an investment of Rs 10,000 crore in Rajasthan’s road sector specially construction of highways on PPP model.
Even as the final decision is pending with Rajasthan Chief Minister Vasundhara Raje, an MoU between Rajasthan and Malaysia is scheduled for October 27.
The Rajasthan Government has taken up a massive project to build about 20,000 km roads on highways and up to villages on PPP model with an investment plan of Rs 50,000 crore.