New Delhi: India’s highways development project, the largest public private partnership programme in the world, is likely to attract a whopping investment of $41 billion, including FDI, from private sector, highways minister Kamal Nath said.
“Over the next few years, of the total projected investment size of $70 billion (Rs3.09 lakh crore), the likely investments from private sector including foreign direct investment (FDI) will be about $41 billion (Rs1.81 lakh crore),” Nath told investors from Australia in New Delhi.
The road ministry has unveiled an ambitious programme to construct 35,000 km of roads by March 2014 and has called for foreign investment to meet the financial requirements.
The highways ministry is keen to implement mega projects, each with a length of about 500 km and a total project cost of $500 million, he said.
“With our straightforward FDI regime, these should interest international players looking for sizeable investments,” Nath said.
His announcements come in the wake of India raising cap on foreign institutional investors (FIIs) investment by $5 billion in government and corporate bonds each. Besides, the government allowed FIIs to invest additional $5 billion in bonds issued by companies engaged in infrastructure sector.
The government’s determination to bridge the infrastructure deficit provides an immense opportunity to international financial institutions and infrastructure companies to participate in the National Highways Development Project (NHDP), he said.
Inviting Australian investors to participate in the highways sector, at a programme at Australian High Commission, Nath said, “...as two large democracies... India and Australia share a special bond. I am hopeful that this bond will make rapid inroads into the roads and highways sector in India.”
Major Australian players have already evinced interest in partnering with the government for infrastructure development while leading contractor and project developer Leighton Group has already announced plans of over $300 million (Rs1,500 crore) in road sector.
Apart from this, Nath last week had also said that shifting its focus from the US and other European nations, Canada has assured India to invest $3 billion in highways projects in the next five years.
The UPA government has plans to build 20 km of national highways a day to increase its network significantly and has launched the NHDP, the largest such programme on PPP mode.
Sixty percent of the highways under PPP will be built on build, operate and transfer pattern.
The country, at present has about 70,000 km of national highways which is only about 2 % of the total over 33 lakh km of road network.