New Delhi: The government wants foreign investors to fund as much as half of the $20 billion (Rs97,000 crore) a year it has earmarked for road building, transport minister Kamal Nath said on Tuesday.
Building roads has become a priority for the new Congress-led government as it aims to generate demand across the country.
“We are looking at all funds. We are looking at sovereign wealth funds. We are looking at private equity. We are looking at pension funds,” Nath said a day after the Budget included a 23% increase in funding for national highways.
Nath also said the government might consider raising taxes on petrol and diesel to pay for road building.
Prioritizing: Kamal Nath. Harikrishna Katragadda / Mint
“We may examine increasing the petrol and the diesel cess we have,” he said. “At a later stage we will examine it.”
Nath said he planned to meet investors from Europe, the US and Asia in the next two-three months to discuss which financing platforms would be most effective.
“In the next year the investment is close to $10 billion from overseas,” he said, adding that his ministry wanted foreign funds to account for half or slightly less than half of road investment in coming years.
Monday’s budget included a provision for state-run India Infrastructure Finance Co. Ltd to refinance bank loans for long-term infrastructure projects, and Nath said he expected to free up about $3 billion in road funding over the next 12 to 18 months.
India’s ambitious highway programme has hit a speed bump as wary investors shy away from funding.
Nath said the government was aware of the problems and was engaging with the state governments to speed up road building across the country. He said it was also examining the issue of appropriate compensation for land acquisition.
Separately, minister of state for road transport and highways R.P.N. Singh told Lok Sabha on Tuesday that the National Highways Authority of India will invite bids for 38 projects spanning 3,554km and worth an estimated Rs42,331 crore under the public-private partnership route.
Rahul Chandran of Mint contributed to this story.