The government of India has set in motion its new highway plan that could eventually turn out to be a major driver of its road monetisation efforts. The road transport and highways ministry is lending the final touches to a proposed infrastructure investment trust (InvIT), to be helmed by the National Highways Authority of India (NHAI), for a number of projects, reports have revealed.
NHAI Chairman NN Sinha said the ministry will be floating the InvIT soon, and that it is currently in the process of seeking Cabinet approval for the same. NHAI has plans to ask the government for more budgetary help and it will also mobilise additional resources from the market, besides the revenue stream from highways construction.
India has the world’s second biggest road network. The Road ministry has further plans to develop about 60,000 km of highways over the next five years. According to estimates by consultancy firm KPMG, highways construction in India will require about Rs 19 lakh crore in the next five years, and the government will need to set up innovative financing mechanisms to address any funding gap.
Road Transport minister Nitin Gadkari said that the proposed InvIT aims to help road monetisation, i.e, NHAI’s road assets by mobilising resources through capital market. It may be recalled here that India’s first InvIT was set up by IRB Infra. The offer included six completed road stretches, spanning over 3,000 kms over five states.
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