New Delhi: In a big push for infrastructure development, the government plans to award Rs 3 lakh crore of road projects this year as it looks to more than double highway construction to 30 km per day.
As the NDA government completes one year in office, Road Transport and Highways Minister Nitin Gadkari says innovative funding plans are being mulled to raise over Rs 3 lakh crore to give a fillip to the road sector.
When the Modi government took charge in May last year, pace of road construction was 2 km per day. "Today it is 12 km a day, which would go up to 14 km per day by May end. The target is to 30 km per day in two years," he told PTI in an interview here.
Besides the plans to upgrade and expand National Highways, Gadkari is planning a 1,000-km Chaar Dhaam Yatra project to connect the four holy towns of Yamunotri, Gangotri, Kedarnath and Badrinath with highways at a cost of Rs 11,000 crore.
"Prime Minister Narendra Modi will begin work on the project during Dusshera," he said. Besides, Gadkari's ministry is planning to build 5,000-km of road network all along the borders and coastal areas under a new scheme to be called 'Bharat Mala' at a cost of Rs 50,000 crore.
To de-congest the national capital, work on the Rs 6,000 crore Eastern By-pass project will start shortly while work on a 16-lane highway from ITO in the heart of Delhi to Dasna in Uttar Pradesh will start in 3 months to ease traffic jams on NH-24. The project will cost around Rs 4,000-5,000 crore.
Also on the anvil are expressways from Hyderabad to Bengaluru and Amritsar to Katra, he said. "We want to award projects worth about Rs 3,00,000 crore, through the PPP, hybrid or EPC (engineering, procurement and construction) model, in the next six months," he said.
Gadkari said Japan has offered India a soft loan of Rs 2 lakh crore for investing in infrastructure and the finer details will be discussed during his visit to Tokyo soon. In addition, early next month he will call a meeting of top bankers to deliberate on ways to attract foreign investors as well as pension and insurance funds to invest in infra projects.
"Our budget (allocation) is Rs 42,000 crore. We can have tax exemption bonds worth Rs 60,000 crore. So we have Rs 1,02,000 crore with us. Our toll income is around Rs 8,000 crore and if we securitise this for 20 years and this increases 1.5 per cent every year, we can get Rs 1.5 lakh crore from this," Gadkari said.
The government is keen on selling 5,000 km road projects worth about Rs 1 lakh crore and a high level meeting of top bankers will be held within a fortnight in which Prime Minister Narendra Modi and Finance Minister Arun Jaitley would be present, he said.
"We have completed 5,000 km of roads under EPC (engineering procurement and construction) mode. We have 100 per cent FDI in this sector, but the investment is not coming in at this moment. This 5,000 km is worth around Rs 1 lakh crore. I will hold a conference in the next 15 days in which we will invite Chairpersons from all Banks, Prime Minister and the Finance Minister," Gadkari said.
He said his ministry was keen on selling these projects to pension funds, insurance funds and foreign investors and added, "I am willing to give them the minimum guarantee for creditors on this. This will help get in investments worth Rs 1 lakh crore".
Replying to a query on plans to meet Rs 10 lakh crore investment for both road and shipping projects, the minister said there was no dearth of funds and his ministry was exploring various options.
"Money has never been a problem," Gadkari said, adding that steps were underway to get loans in dollar terms instead of rupees and thereby reducing the interest burden.
Citing an example, he said ICICI bank has agreed to provide loan for a road project at JNPT, one of India's 12 major ports in dollars instead of rupees.
"We have 12 major ports and there is Shipping Corporation of India. They do their business in US dollars. Our turnover from this in US dollars is worth around Rs 5,000 to Rs 6,000 crore," he said and added that initially JNPT took a loan of Rs 4,000 crore for 8-lane road project at JNPT from ICICI bank at 12 per cent interest.
The minister said he had to intervene and after his talks with ICICI Bank Chairperson Chanda Kochhar, the bank agreed to provide loans at "LIBOR (London Interbank Offered Rate) plus 0.5 per cent".
"So if I go out for loans on my US dollar income then I can get loans worth Rs 1 lakh crore in US Dollars and I don't have to hedge them," he said. Government's efforts to ramp up India's infrastructure also got a boost with China and South Korea pledging investments in various projects.
Earlier this week, South Korea offered to provide USD 10 billion for infrastructure projects in India, including smart cities and railways, as Modi held talks with President Park Geun-hye and the two nations decided to elevate their ties to a special strategic partnership.
Besides, last week China and India signed business pacts including those on education exchange programme, on mining and minerals, skill development, tourism and vocational education also figured on the list.