THE TIMES OF INDIA

20th August 2009, 02:49 IST

By Sheila Mathrani

Indian highway projects are wealth creators: Nath

Zurich: Minister for roads, transport and highways Kamal Nath told a full house of prospective investors at the Road Infrastructure Summit at Zurich that the government of India has put infrastructure development on the top of its agenda, and with that highways development.

Organized by JM Financial, CII, IF, ICICI Securities, and the SICC the road show attracted prospective investors even from London. India is prepared to try all models to attract investment in the highways.

Mr. Nath told listeners that he is prepared to consider doing away with the termination clause of the model concession agreement to make projects more viable. India has a PPP model that is India specific. Mr. Nath said that India wants to have contracts which will make investment attractive and worthy.

“And in this we are going to have our roads, our concessionaries, and our investment companies. I want bids. So in government we all ensure that construction companies get finance, that concessionaries get financed. It is not so much as government finance – in government we find the resources. We look to form the resources. I’ve talked to a lot of infrastructure funds and they have given me their suggestions.

And in roads there are different forms of finance. We have a construction period that is different kind of risk. We have equity funds; we have debt funds, pension funds. And with all these we want to sensitize global investors that India will remain an attractive investment destination and a good and attractive parking lot for investments. And it is demonstrate by India’s track record for the 10 years that the most profitable investments were made in India,” he said.

Mr. Nath stated that one of the biggest challenges of India as a democracy is that of inclusive growth. “Therefore what could there not be better – that of connectivity by roads. It impacts agriculture, trade, and industry and touches all sections of society. Wealth does not create roads; it is roads that create wealth. India is on a growth trajectory, and roads traverse the entire country – the backward regions, villages, small towns, big towns, mega cities. The multiplier effect of wealth creation by building roads will be so profound that whatever numbers we talk about we will still be short.”

According to Nath the NHAI is implementing road project under various phases to achieve it. Kamal Nath has set a ten fold increase of highways to be built per day – from the current just over 2kms a day – as a target.

Minister Nath stated that from the outset the focus in India was on rural infrastructure and rural employment therefore the strategy was to have connectivity between villages. “Now India is embarking on the next logical step – that of highway programmes as one of the essential ingredients of India’s economic stimulus. Highway connectivity generates employment, in a way no other programme brings. India is the second largest produce of fruit and vegetable in the world but 40% rot because of the lack of goods connectivity. Much of India’s production is outside the market economy.