Union Minister Nitin Gadkari said that the government will not take money from foreign investors for infrastructure projects like roads.It will instead mobilise funds from small investors willing to put Rs 1 lakh for an assured return of 8% per annum.
Independent Funding
A Rs 8,000-crore project is in the works which would build bridges over railway crossings in towns and cities which will be officially announced after the budget.
Gadkari’s department undertakes works of over Rs 5 lakh crore a year in which foreign investors express their interest.
But they “clearly stated a lack of interest on his side to engage”.Gadkari said that instead of making “the rich richer”, the government will take money from farmers, farm labourers, constables, clerks and government employees.
Funding From Small Investors
The plan requires a minimum investment of Rs 1 lakh from every small investor who will be assured a return of 8% per annum with sovereign guarantee as against a 4.5-5% earned on bank deposits.
This proposal is pending with capital markets regulator SEBI and will be launched when they get the approval.
Over the years the government received investments from foreign investors like Australia’s Macquarie or Canadian pensioners.
But now, he says, it is “essential for us to mobilise funds by ourselves.”
Turning Down Foreign Investors
He said that he rejects foreign investors who had earlier refused to invest in a Rs 1,500 crore masala bond roadshow a few years ago.
The investors had approached him offering to invest up to Rs 5,000 crore.
He added that the National Highways Authority of India (NHAI) is raising loans at competitive rates of 5.75 or 5.85% and has two banks with offers of Rs 25,000 crore loans at present.
Delhi-Mumbai Expressway
One of the projects includes the Delhi-Mumbai access controlled expressway which will be open for traffic in a year.
He stressed that there is no shortage of funds in the foreseeable future.
The Delhi-Mumbai expressway will be extended to the nearby JNPT, the country’s largest container port and a Rs 660-crore multi-tier intersection is being planned in Panvel.
This project would reduce distances, travel time, pollution, fuel and help the economy.
Preferring Fuel Alternatives
He said that fuel alternatives like ethanol, liquefied natural gas, green hydrogen need to be used the most in order to save forex on crude, curbing pollution while helping domestic industry and sugar growers.
In a reference likely towards corporate group Essar’s interests, Gadkari said a brother of Prashant Ruia recently showed him two trucks running on LNG in Nagpur which would help save up to 60% on running costs after fitting a LNG kit costing Rs 8 lakh.
The cost recovery would take 295 days.
Future Projects
Gadkari said that a team of Russian scientists who developed a part which would increase fuel efficiency are in the country and have met the Petroleum Secretary and Indian Oil Corporation.
He has planned a logistics park in Sangli which has a concrete road with industrial infrastructure on either side.
This road will allow for landing of aircraft, and consequently reduce logistics costs for the users.