Terming InvIT as an attractive vehicle for mobilising funds for road infrastructure, the government on Friday said it is planning to construct over 50,000 km of highways. "Addressing a meeting of leading and large investor groups in New Delhi last evening, Secretary - Road Transport and Highways Giridhar Aramane said the ministry has plans for construction of over 50,000 kilometres of highways, a majority of those will be 4 and 6 lanes wide," the Ministry of Road Transport and Highways said in a statement.
The secretary called upon the investors to consider that InvIT has scope for broad basing the investor groups. While addressing an investors' meet on Infrastructure Investment Trust (InvIT), Aramane said it promises to be an attractive vehicle for mobilising funds for road development and assured investors that the asset base of InvIT will be selected carefully to yield attractive returns and mitigate inherent risks. He said the proposed roads have a long history of tolling and thus the price discovery is likely to be handsome.
The secretary also assured that efforts will be made to facilitate the realisation of value for investment, the statement said. Aramane added that the functioning of the investment manager will be democratised by bringing investing partners into board of directors to manage the company in a professional manner. He said the project managers will also be selected on professional and efficiency basis.
InvITs are instruments on the pattern of mutual funds and are designed to pool small sums of money from a number of investors to invest in assets that give cash flow over a period of time. The Union Cabinet has already approved setting up of InvIT. "This will enable National Highways Authority of India (NHAI) under the Ministry of Road Transport and Highways to monetise completed national highways that have a toll collection track record of at least one year and NHAI reserves the right to levy toll on the identified highway," the statement said. The Ministry of Road Transport and Highways has been making concerted efforts for attracting potential investors to participate in this ambitious effort.
The statement added: "The government has embarked upon a transformational programme of implementing National Infrastructure Pipeline to realise the potential of Indian Economy. Road development is one of the most important components of this programme, contributing over a quarter of the planned expenditure." Expansion of roads will give a boost to the economy by reducing logistic costs, connect, hinter-land to hubs, and cater to rapid growth in vehicle ownership, it added.