India Road Infrastructure to Develop Tenfold, Foreign Investment Welcome

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Rohit Patwardhan

Jun. 25 – Kamal Nath, the recently appointed as minister of road transport and highways, has publicly acknowledged that India’s roads are a mess says that opening up the sector for massive investment and infrastructure spending as a key area for development.

Noting that currently India builds just two kilometers of highway every day, Nath has set a target to increase this to 20 kilometers a day and has established a new financial body, the Roads Finance Corporation, to increase road construction through securitizing the required income and possibly list on the Bombay Stock market to raise funds. The new government has earmarked US$92 billion for road and highway construction with immediate effect until 2012, while the government is inviting bids for over 200 national highway projects covering over 13,000 kilometers of road at this moment.

The Indian government intends to finance the construction of India’s new roads and highways by raising financing from the overseas, including pension funds and long term investors, in addition to opening up the sector to foreign development and participation. Funding from India’s road tax and fuel sales taxes, in addition to budgetary allocations would also assist the construction. The scheme has been likened in size to the post-World War II highway construction boom that occurred in the United States.

Further Reading
India Getting Serious on Road Infrastructure