New Delhi: India will award a record 7,300 kms of road building contracts this year worth about $12 billion, as a huge privatisation drive makes developers more willing to take on projects and foreign funds eager to invest, a top official at the National Highways Authority of India said.
The new contracts will help India meet its target of building 20 kms of roads per day as part of a massive overhaul of its infrastructure sector, boosting the country’s economic growth, said J.N. Singh, member finance at the authority.
“Compared to the last 4-5 years, the sector has substantially matured,” Singh told Reuters in an interview at his office in New Delhi on Friday.
“Whichever side of India you go, you will see road building at a very hectic pace going on right now.”
Overseas private funds such as the UK-based 3i and Morgan Stanley are showing a greater appetite for investing in projects while domestic constructors are getting more and more capable of taking on big projects, he said.
An uptick in interest will give a boost to the government’s ambitious target to pour $1.5 trillion into infrastructure in the 10 years to 2017 to help unclog its congested roads and ports, and build world class airports and underground metros.
Hurdles from land acquisition hassles to bureaucratic red tape continue to smother faster construction and funding, with many of the government’s targets missed. About 20%-25% of current road projects under construction have been delayed by months or years, Singh said, often because of land acquisition problems.
India built about 1,800 kilometres of roads (1,120 miles) of roads in the fiscal year 2010/11, about five kms a day, a knock-on effect of the global financial crisis, Singh said.
“In 2008/09, because of the global economic meltdown and all there were no takers for projects,” Singh said.