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US pension, private equity firms may invest in Indian road projects

US pension, private equity firms may invest in Indian road projects
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First Published: Fri, Sep 18 2009. 12 30 AM IST

Core spending: The Indian government estimates spending on roads, ports and other infrastructure to be $500 bn in the five years to 2012. Harikrishna Katragadda/Mint
Core spending: The Indian government estimates spending on roads, ports and other infrastructure to be $500 bn in the five years to 2012. Harikrishna Katragadda/Mint
Updated: Fri, Sep 18 2009. 11 15 AM IST
Washington: US pension and private equity firms are excited about financing India’s $80 billion (Rs3.84 trillion) programme to build roads and expressways, according to minister for road transport and highways Kamal Nath.
Core spending: The Indian government estimates spending on roads, ports and other infrastructure to be $500 bn in the five years to 2012. Harikrishna Katragadda/Mint
“The US funds’ level of interest signals money will flow in as guidelines are set, with overseas investors likely to provide $10 billion over the next three years,” Nath said on Wednesday in New York after a presentation to investors. “Buyout firms may finance road building, while pension funds would probably invest in the post-construction period.”
“The projects are not only viable, but profitable,” Nath told reporters in New York. US investors are now not looking at real estate, not looking at equities; they’re looking at infrastructure.
India will need $1.7 trillion to build infrastructure over the next decade to boost economic growth, Goldman Sachs estimated in a report on Wednesday. Foreign and Indian private companies are expected to contribute $45 billion of the total $80 billion projected investment for the roads and highways programme over five years, according to Nath.
The Indian government is studying the feasibility of setting up mega projects, which would involve individual bids of at least $1 billion, to attract big companies with the best technology, Nath said. His US visit capped a tour that included Singapore, Zurich and London.
The Indian government estimates spending on roads, ports and other infrastructure at $500 billion in the five years to 2012.
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First Published: Fri, Sep 18 2009. 12 30 AM IST