Internal Rate Of Return In Road Sector Very High, Says Gadkari; Welcomes Private Investments

Offering multiple investment opportunities, Road Transport and Highways Minister Nitin Gadkari has urged investors to come forward and invest boldly in the infrastructure sector including Highways, Multimodal Logistics Parks, Wayside Amenities, Ropeways, Warehousing Zones and more.

Addressing the national conference on investment opportunities in Highways, Transport & Logistics in Mumbai, Gadkari said “the Internal rate of return in the road sector is very high and hence there is no need to worry about economic viability”.

The conference informed investors and other stakeholders that the Union Ministry of Road Transport and Highways has planned to execute infrastructure projects worth Rs 7 lakh crore in the next 2-3 years itself.

Gadkari said, earlier, projects used to get stalled due to land acquisition issues. But we decided the project will not be awarded before 90 per cent land acquisition is complete and environment clearance is obtained.

Citing various other steps taken by his Ministry to speed up road infrastructure projects, the Minister said “Keep your confidence 110 per cent."

The Minister also spoke about the many benefits of upcoming projects under the Bharatmala Programme. "The travel time from Mumbai to Delhi, via road, will go down from 48 hours to 12 hours within one year; road projects and multimodal infrastructure projects will reduce logistics costs and boost manufacturing, increase exports and help the economy grow," he said.

Bharatmala Project is the umbrella flagship programme for national highway development with focus on improving efficiency of freight and passenger movement along with development of allied infrastructure projects.

The Minister also spoke about the benefits of the Vehicle Scrapping Policy of the government. "This will reduce pollution, improve tax revenues, help growth of the automobile sector, boost exports and also create jobs," he said.

"It is a win-win situation, in which investment on a high scale can come in," he added.

Speaking about the transformation the Vehicle Scrapping Policy will usher in, Gadkari said: “Vehicle Scrapping Policy will reduce pollution, improve tax revenues, grow the automobile sector, boost exports and create jobs. It is a win-win situation, in which investment on a high scale can come in.”

The Voluntary Vehicle-Fleet Modernization Policy aims to create an ecosystem for phasing out of unfit and polluting vehicles. Under the policy, around 50-70 Registered Vehicle Scrapping Facilities (RVSFs) will be set up across the country during the next 5 years to cater to the expected demand for scrapping of unfit vehicles in a safe manner.

The Minister said the automobile industry in India which is worth Rs 7.5 lakh crore in size will double to Rs 15 lakh crore in next 5 years.

Speaking about electric vehicles, Gadkari said “we are issuing an advisory on Flex Engines. In two-three years, our vehicles will get converted into electric vehicles. Running cost of electric vehicles will be similar to or less than vehicles run on petrol."

He also stressed upon alternative fuels like ethanol and asked Maharashtra Transport Department to launch ethanol-driven auto rickshaws in Pune, which already has three ethanol dispensing stations.

“Encouragement to alternative fuels will ultimately help the scrapping industry as well”, the Minister added.

Speaking about the Asset Monetization roadmap, Gadkari cited the example of Mumbai–Pune Highway, which has brought a higher rate of returns to the state and the government.

"Reliance had quoted Rs 3,600 crore for the project. However, we decided to build it through MSRDC for Rs 1,600 crore. Later on, the Maharashtra government monetized it for Rs 3,000 crore and just recently, the same project was again monetized for Rs 8,000 crore," he explained.

The Road Transport and Highways Secretary Giridhar Aramane informed that an integrated plan and coordinated implementation of all infrastructure facilities is getting a boost through the Gati Shakti programme.

“We are doing scientific Logistics Effectiveness Studies to understand bottlenecks in infrastructure projects. To remove bottlenecks, NHAI has identified 120 congestion points across the country; ring roads and bypasses are being built to reduce congestion in cities. After connecting all state capitals with at least four-lane National Highways, now we are planning to have expressways connecting all important economic centres of the country.”

NHAI Chairperson Alka Upadhyaya said that NHAI is developing multiple facilities and allied infrastructure, in line with the Prime Minister’s vision for promotion of integrated infrastructure under PM Gati Shakti National Plan.

“The new thrust is on development of allied highway initiatives like MMLPs, last-mile connectivity through ropeway projects, fiber cables and other infrastructure along National Highways. Almost 8,400 state-of-the-art greenfield expressways are being built as part of Bharat Mala Pariyojana. These corridors will change the face of National Highways infrastructure and also supercharge the economy to a 5 trillion-dollar economy” she said.