India eyes huge rise in road building By Joe Leahy in Mumbai Published: June 22 2009 19:02 | Last updated: June 22 2009 19:02 India’s Congress party-led coalition government is planning to invite foreign investors to participate in an ambitious move to increase road construction 10-fold as the country seeks to boost much-needed infrastructure development. Kamal Nath, India’s new road transport and highways minister, said he planned to set up a government “roads finance corporation” that would securitise its income and potentially list on the stock market to raise funds for his ambitious plan. “The roads are in a mess,” Mr Nath told the Financial Times in an interview. “At the moment, we’ve been struggling with [building] 2km a day – I’ve set a target for 20km a day ... we are going to work towards that.” Bureaucracy and land disputes have so far curbed India’s efforts to improve its crumbling road network, even as its neighbour across the Himalayas, China, has built super-highways criss-crossing the country. However, the return last month of the Congress party-led ruling coalition with an overwhelming majority has created the opportunity for an infrastructure programme of historic proportions, similar to the pre-war highway construction boom of the US. PwC, in a report titled “Infrastructure in India – a vast land of construction opportunity”, says India is targeting investment in roads of $92bn in the five years to 2012. The central government is inviting bids for more than 200 national highway projects, the equivalent of 13,000km of road. About one quarter of these projects, with an aggregate length of 3,000km, were already at the pre-qualification stage for tenders. In addition, state governments are planning to tender 4,500km of roads by 2010. Analysts said that, while the programme was laudable, the key was implementation. India’s road-building programme in recent times has been disrupted by factors such as frequent changes of leadership at the National Highways Authority. “They need to be ambitious and, more importantly, they need to focus on execution,” said Arvind Mahajan, infrastructure and government national industry director at KPMG. Mr Nath said the new roads finance company would be able to draw on the government’s Rs100bn ($2bn) in annual earnings from a tax on fuel sales as well as budgetary allocations of about Rs40bn and other income of about Rs60bn. He said the government would raise international financing for the corporation as well as investment from pension funds and others interested in the long-term returns offered by infrastructure. “I will do a roadshow in the next two months, all over the world, to attract funds for this,” he said.