NHAI should have a finance arm like the Department of Energy’s Power Finance Corporation or the railroad’s Indian Railways Finance Corporation (IRFC). he says
NHAI should have a finance arm like the Department of Energy’s Power Finance Corporation or the railroad’s Indian Railways Finance Corporation (IRFC). he says
Union Minister for Roads and Motorways Nitin Gadkari said on Tuesday infrastructure companies should also launch their own non-bank financial companies (NBFCs) to fund road construction-related projects.
Mr Gadkari further said that the National Highways Authority of India (NHAI) should also have a finance arm like the Ministry of Energy’s Power Finance Corporation (PFC) or the Ministry of Railways’ Indian Railways Finance Corporation (IRFC).
“Infrastructure companies are now investing heavily in infrastructure… Infrastructure companies should also bring their own non-bank financial companies (NBFCs) to market to fund road-related projects,” he said during a speech in Assocham.
He also suggested that NBFCs that go public to fund road projects should partner with foreign funds to reduce the risk of dollar hedging and that they can also pledge toll rights.
Mr. Gadkari stressed that there was a need to develop an innovative financial model for the highway sector as it was difficult to develop infrastructure with state funds alone.
He also found that the Department of Roads and Motorways (MoRTH) had a road length of 1,000 km that had an internal rate of return of more than 13%.
According to the minister, MoRTH is also considering a proposal to set up its own agency to buy or restructure stalled projects.
He said inflation has increased due to the war between Ukraine and Russia.
The minister pointed out that a few years ago, road infrastructure projects were delayed due to delays in land acquisition and environmental approvals.
“But now the situation has improved,” he said.
Mr Gadkari assured that India’s road infrastructure will be on par with that of the United States by 2024.
