Secretary Road Transport & Highways, Giridhar Aramane has called upon stakeholders to favourably consider the potential of the infrastructure investment trusts (InvITs) for expanding the investor group.
Addressing a meeting of leading and large investor groups in New Delhi on Thursday evening, Aramane said that the Ministry of Road Transport and Highways (MoRTH) had plans for the construction of over 50,000 km of highways, with a majority of them being four to six lanes wide. In this backdrop, InvITs could be an attractive vehicle for mobilising funding for road development.
Assuring the investors, he further added that the asset base of InvIT would be selected carefully to yield attractive returns and mitigate inherent risks. He said the proposed roads had a long history of tolling, and thus the price discovery was likely to be substantial. The secretary also assured that efforts would be made to facilitate realisation of value for investment.
Aramane added that the functioning of the investment manager will be democratised by bringing investing partners into the board of directors to manage the company professionally. He said the project managers will also be selected on a professional and efficiency basis.
The Govt of India has embarked upon a transformational programme of implementing the National Infrastructure Pipeline (NIP) to realise the potential of the Indian economy. Road development is one of the most important components of this programme, contributing over a quarter of the planned expenditure. Expansion of roads will give a boost to the economy by reducing logistic costs, connect, the hinterland to hubs and cater to rapid growth in vehicle ownership.
The Union Cabinet has already approved the setting up of InvIT. This will enable the National Highways Authority of India (NHAI) under the Ministry of Road Transport and Highways to monetise completed national highways that have a toll collection track record of at least one year, with NHAI reserving the right to levy a toll on the identified highway. MoRTH has been making concerted efforts for attracting potential investors to participate in this ambitious effort.