India Inc to fill Rs 30K cr ‘road deficit’

“In the previous job,even talking was progress,here talking is not progress. This is a challenge which can transform India. Our infrastructure deficit stares us in our face and within the infrastructure deficit,the road deficit is profound,” Nath said while speaking about the task that awaits him.

According to National Highways Authority of India (NHAI),India has the world’s second largest road network,aggregating over 3.34 million km,but national highways constitute only about two per cent at 74,000 km.

Nath,who travelled to the US,the UK,Japan and Malaysia recently to invite investors,said that he saw no difficulty in raising resources for highways,almost two-thirds of which would be toll roads with potential to fetch Rs 10,000 crore (over USD two billion) annually.

Nath,who as Commerce Minister in the first term of UPA government was credited with pushing developing countries concerns in global trade talks under WTO,said that he expects foreign investors to inject USD 10 billion.

The government,which has set USD one trillion as infrastructure spending target in the five years till 2017,is also in talks with multilateral agencies for soft-funding the key infrastructure projects.

“Resources are there from NHAI borrowings,the World Bank and the ADB. Sixty per cent of the roads are built under Build-Operate-Transfer (route),” Nath said,adding that foreign investors,particularly in the construction sector,are showing interest.

Although they constitute only about two per cent of the road network,national highways carry about 40 per cent of the total road traffic and Nath’s plan to speed up building of roads also promises to spawn an industrial revolution along highway corridors.

The minister said India offers a big opportunity for overseas investors. “With 33 per cent growth in the automobile sector,highways offer a huge opportunity for investors.”

About 65 per cent of freight and 80 per cent of passenger traffic in India moves on roads.

The Road Transport Ministry expects that foreign players,who are at present on the margins,would become senior partners in the construction projects in the coming years.

Private equity firms were also expected to show interest in the sector.

The NHAI has estimated its annual borrowings from the domestic and the international market at up to Rs 20,000 crore for the next 15 years.

Nath,who was rated as one of India’s successful Commerce Ministers,made it clear that NHAI’s inability to handle large-sized projects was an area that would receive his attention. “The most important task is capacity-building. You need to keep having substantial amount of work in progress,” he said.

Nath exuded confidence that contracts for construction of 12,000 km of roads would be awarded this fiscal.

The figure would double in 2011-12,as award of these projects would result in a large quantum of work being executed simultaneously,he said.