Nitin Gadkari urges agencies to create an infra fund
Minister of Road Transport and Highways Nitin Gadkari has urged highway builders involved in road construction projects across India to create an infrastructure fund to finance road projects.
Gadkari suggested agencies to put in Rs 100 crore each to form an infra finance firm. He made this proposal while speaking at a virtual event organised by industry body Assocham. The minister said that only big contractors who are financially strong and have good relations with banks are getting funds.
He suggested agencies to put Rs 100 crore each to form an infrastructure finance company and said he would ask the National Highways Authority of India to put in equity and said the agencies could then tie up with a foreign fund.
Gadkari said that the Ministry of Road Transport and Highways (MoRTH) does not have a financial arm to provide support to the contractors. Bank guarantee and financial closure are becoming a problem in case the hybrid annuity model (HAM) for building national highways, said Gadkari.
Gadkari cited examples of Indian Railways, which has an arm called the Indian Railway Finance Corporation (IRFC), and the power ministry, which has Power Finance Corporation (PFC) to show where his ministry is lacking as far as funding is concerned.
Road infrastructure in India has been progressing at a rapid rate, with a record 37 km of roads being built every day. Despite the ongoing pandemic and restrictions, India continued to add significant length to the existing road network across the country.
The National Highways Authority of India (NHAI) recently achieved a major feat by building a four-lane highway of 2,580 m in length within 24 hours, creating a world record. By March 20 this year, India developed 1,37,625 km of highways compared to only 91,287 km in April 2014. During this period, India has also spent five times more money to construct highways.