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Tuesday, December 02, 2014

Need to fast track decision making process in infrastructure sector – Nitin Gadkari

India faces financial losses worth Rs 400 crore/day due to delay in projects' execution 

There is a pressing need to fast track decision making process in the infrastructure sector as delay in projects' execution causes financial loss to the tune of about Rs 300-400 crore daily in terms of one day's interest cost, Union Minister, Mr Nitin Gadkari said at an ASSOCHAM event. 

“My delay in taking decisions will result in India facing financial losses worth about of Rs 400 crore daily in terms of interest cost per day,” said the Road transport highways and shipping Minister while inaugurating 4th International Summit on ‘Infrastructure Finance-Building for Growth,' organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM). 

“We have streamlined projects in the road sector worth about Rs 1, 80,000 crore that were stuck up due to land acquisition together with forest, environment and other clearance related issues,” said Mr Gadkari. “We have solved about 80 per cent of issues that were involved with the Environment and Forest Ministry.” 

He further said that the government is facing financial constraints and the decision for implementing public-private-partnership (PPP) based investments in the road sector has been taken after a very long delay. 

“In the present scenario if projects are financed at 13 per cent rate of interest then it will impact economic viability and will be a blockage in infrastructure development, thus there is a need to reduce interest costs,” said Mr Gadkari. 

He also said that there are projects worth about Rs five lakh crore that can be implemented under the PPP model. 

“Somewhere we have to find a way out to reduce cost of construction, interest rates and how we can improve economic viability and internal rate of return,” he added. “We need to change the mindset and promote use of digital e-governance.” 

With a view to reduce the number of road accidents in India, the National Highway Authority of India (NHAI) has taken a decision to improve accidental spots in existing projects, informed Mr Gadkari. “We will not let people die for economic viability.” 

He further said that there is a need to discourage road transport and promote inland waterways as it is very cheap and is non-polluting mode of transportation. 

“Infrastructure financing plays a critical role in stimulating economic growth by providing strong impetus to economic development, industrial growth and employment. Considering the huge quantum of capital investments required, the private sector will play a key role in supplementing infrastructure development in the country. With a decisive Government at the centre, there is now renewed focus in incorporating the element of ‘People' to PPP projects, aided by transparent policy and contractual frameworks. India requires a consistent infrastructure drive, all the way up to 2050.” – Rana Kapoor, President, ASSOCHAM. 
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