India will construct more roads and new ports to remove infrastructure bottlenecks that hamper its growth. The new ports will be set up in Andhra Pradesh and West Bengal that will add capacity of 100 million tonne, Finance Minister Palaniappan Chidambaram said in his annual budget speech recently. The government will also award 3,000 kilometre (1,864- miles) of road projects in the first half of the year starting April 1, he said.
Builders of highways and ports will be allowed to raise as much as 500 billion rupees ($9.2 billion) selling tax-free bonds to help pay for projects next year, he said. Prime Minister Manmohan SinghÂ’s government is seeking to boost infrastructure investments as economic growth is forecast to slow to the lowest level in a decade.
Road construction faces challenges not envisaged earlier, including financial stress, enhanced construction risk and contract management issues, Chidambaram said. The growth rate of an economy is correlated with investment rate, he added.
GMR Infrastructure and GVK Power & Infrastructure (GVKP) have sought to quit some road projects citing delays, while State-owned National Highways Authority of India has said land acquisition delays and difficulty in raising loans were affecting construction.
Leave a Reply
You must be logged in to post a comment.