New York: The World Bank has agreed to
provide a USD 3 billion-loan for developing national highways.
The World Bank assistance will be utilised for converting
6,372 km of one-lane highways to two-lane, out of the total of
19,702 km of single lane highways in the country.
"They have (World Bank) for the first time informed me
that they will be willing to fund the viability gap funding
and also fund 50 percent of our annuity projects," Nath told
the Indian media here after concluding his week-long tour to
the United States yesterday.
Nath also announced the construction of 18,000 kms of
expressways in the country.
"We are going to set up an expressway division in the
next fortnight and I propose bringing in legislation for
Expressway Authority of India," he said.
"Roads in India are not merely a matter of connectivity
but is an important component of inclusive growth," he said,
adding the total project costs for 2009-2010 is estimated at
USD 20 billion.
Both debt equity and pension funds are being invited to
participate in this programme, he said. The share of private
sector investment in this will be about USD 12 billion.
Over the next few years, out of the total projected
investment of USD 80 billion, the private sector investment is
estimated to be 45 billion dollars and this makes the road
project the largest Public-Private Partnership in the world,
To get a diverse set of investors on board, the minister
has traveled to Singapore, London, Zurich and NYC to listen
to their concerns.
"While India remains an attractive investment destination
we have to see that the model of our projects are also
investment attractive," he said.
The ICICI Bank CEO, Chanda Kocchar, noted that the 20
billion dollar-road programme offered an attractive
opportunity for both equity and debt investors.
"The roads asset is an asset class that provides a very
steady and stable return to the investors," she said.
"What we have been doing working with the government in
the last few months is to try and look at the facilitative
factors that can make all the road projects even more
economically viable," she added.
Ajit Gulabchand of Hindustan Construction Company said
the road project will create two kind of investors -- those
who are solely developers and those who want a steady annuity
from it by investing in a toll.