Rs 50,000 cr to be raised from mkt for road projects

The government plans to raise around Rs 50,000 crore from the market in order to finance road projects in the next eight years and is also preparing to tap the international market.

The chairman of National Highways Authority of India, Satyanarayana Dash, told foreign investors gathered at the third annual India Investment Forum organised by Merill Lynch & Co that the borrowings, which would be of 15 years' tenure, would be repaid out of future cess inflows.

The country had so far spent around Rs 33,500 crore on road projects such as the Golden Quadrilateral (GQ) and North-South and East-West corridors, he said.

However, in the next 10 years an expenditure of about Rs 2,20,500 crore would be required to construct a world class highway network in India.

Assuring investors about a conducive investment climate, the NHAI chairman added that the country had taken the bold step of levying a cess on diesel and petrol, which was credited to the non-lapsable Central Road Fund. The total cess collection stood at around Rs 13,500 crore per annum.

The highway body had expected only 13 per cent of projects in GQ and North-South & East-West corridors to be taken up on Build Operate and Transfer (BOT) basis.

However, an overwhelming response from the private sector had led to nearly 20 per cent of the projects being taken up on BOT basis.

"Encouraged by the private sector's participation in the road sector so far, the government has decided to implement the rest of the projects, involving an investment of $49 billion (Rs 2,20,500 crore), mainly through public private partnership," he added.

Dash said the BOT projects were generally completed on time, with some even being completed ahead of schedule.