New Delhi, April 20. Union Minister of Road Transport and Highways (MoRTH) Nitin Gadkari has urged companies in the infrastructure development sector to float their own financing firms to fund projects. Mr. Gadkari added that the National Highway Authority of India should also form a financing arm. The minister also said the MoRTH is considering setting up a company to buy stalled infrastructure projects. The aim is to restructure such projects.
Inaugurating the 102nd foundation day programme of ASSOCHEM in New Delhi, Mr. Gadkari called for innovative solutions in project financing and use of technology and alternative materials in construction to bring down the booming construction costs while improving quality of works.
Mr. Gadkari said, It is now almost impossible to develop infrastructure solely with the funds of the government. There is huge investment in infrastructure development in the country at present. There are many types of funds in foreign nations like pension funds and insurance funds with huge money. But they can’t invest hundred percent directly in infrastructure projects; there is impediments.
For funding projects, infrastructure companies, including roads and bridges construction firms should come together and float their own NBFCs, the minister said. They can then tie up with foreign funds and hedge in dollar to reduce risks, and provide loan to member companies at low interest rates. There should be innovative model for financial support, he said.
Stressing the need for NHAI to form its own financing arm, the minister said the Power Ministry has Power Financing Corporation already and Railways Ministry, Indian Railways Finance Corporation.
Reviewing the availability of funds for development works, Mr. Gadkari said there was no shortage of money for roads and bridges development at present. The reason is projects are viable and internal rate of return is high. The NHAI has one lakh kilometre road under it and the return is 13 percent If we monetise the return will be higher and will lead to generation of more jobs, he added.
The minister asserted that India’s road infrastructure will become equivalent to that of USA before 2024. Explaining the steps being taken by the union government to remove bottlenecks in road construction Mr. Gadkari said, Earlier land acquisition environ clearance etc used to cause inordinate delays in works. Now there is a committee under my chairmanship to solve such issues. The committee has been able to unknot all problems quickly.
Use of technology and alternative materials
Cost of construction should be lowered and quality should be bettered, observed the minister. But how is this possible when cost of construction materials are shooting up? The answer is use of new technology and alternative materials, the minister said. For example, steel and ement prices are increasing. But a few alternatives are available now; They includ precast and steel firbre. The MoRTH is now encouraging their use. Malaysia and Singapore have implemented innovative technologies in road and bridge construction Steel fibre pier use can bring down cost. Precast use is now increasing; eg in railway. New precast factories are coming up. Ue of precast and steel fibre and glass fibre can bring down cost, to a great extent, said Mr. Gadkari
The problem of shortage and price rise of aggregates are now being faced in many states, noted the minister. To overcome that alternative materials can be used. For example use of Jute and Coir in road construction will help. Its producers are poor people and they will also benefit. Similarly, up to 10 percent plastic and rubber can be mixed with Bitumen. That will bring down costs, said Mr. Gadkari. Government is promoting out of box thinking, he added.
