Funds not an issue for infra development, says Union minister Nitin Gadkari

Nitin Gadkari, Union Minister for Roads, Highways, Ports and Shipping, is betting big on the public transport, which, he says, has a high potential to spur growth. "In 2018-19, National Highways Authority of India (NHAI) can mobilise up to Rs 2 lakh crore in tranches of Rs 10,000 to Rs 15,000 crore whenever needed. Investors are ready to invest at 8% rate of interest in NHAI bonds," he says. Gadkari spoke to Sanjay Jog on a range of issues in road, port and shipping sectors and the way ahead.

How are you mobilising funds for road and highway projects amid falling rupee and pressure on finances?

Let me tell you, money was never an issue. Already, projects worth Rs 10 lakh crore have been launched and are under various stages of implementation. Multiple instruments, including monetisation, bonds, loans from public sector banks, are being explored. I recently met the chairmen of public sector banks who offered Rs 1.30 lakh crore at 7.08% rate of interest for projects being developed under the hybrid annuity model. Already, 112 national highway (NH) projects of about 6,325 km and involving estimated cost of Rs 126,750 crore have been awarded till March 2018. The ministry is monetising its road assets constructed with public funds through Toll-Operate-Transfer (TOT) scheme, which envisages bidding of bundled national highways for a concession period of 30 years to concessionaires against upfront payment of a lumpsum amount. Operations and maintenance obligations are with the concessionaire during the concession period. NHAI completed first round for bundle of nine projects (680 km)m wherein the H1 bidder quoted concession fee of Rs 9,681.5 crore (against NHAI estimated Rs 6,258 crore). It was awarded to Sydney-headquartered Macquarie group. The government expects to raise around Rs 2 lakh crore through TOT in next five years. NHAI last year launched a Masala Bonds issue on the London Stock Exchange. The initial issue of Rs 1,500 crore was upsized to Rs 3,000 crore. For construction of road in Panvel near JNPT, the loan was drawn in dollars at 2.25% rate of interest. In 2018-19, NHAI can mobilise up to Rs 2 lakh crore in tranches of Rs 10,000 to Rs 15,000 crore whenever needed. Investors are ready to invest at 8% rate of interest in NHAI bonds. Besides, the NHAI has created a National Highways Investment Promotion Cell for attracting domestic and foreign investment for highways projects.

Will you be able to award 25% more highway contracts in this fiscal?

I don't see any problem. The construction targets for 2018-19 have been set at 16,418 km, of which 9,698 km will be constructed by the ministry, 6,000 km by NHAI and 720 km by National Highways and Infrastructure Development Corporation. The targets are 67% more than the 9,829 km length of NHs constructed during 2017-18. It has also been decided that all project executing agencies should take up 100% completion of the projects awarded pre-2014 and those awarded in 2014-15 and 2015-16.The target for award has been set at 20,000 km during 2018-19. This is about 25% more than the 17,055 km awarded during 2017-18.

Do you also stick to the target of 40 km road construction a day?

All wings of the highways ministry have so far achieved construction of 28 km a day and it will be increased to 40 km a day by March 2019. The ministry has pushed the construction from only 11 km a day to 28 km in the past four years. Therefore, both the targets of 25% more highway contracts and construction of 40 km a day are achievable. The ministry has streamlined process to appraise and approve projects and land acquisition has been expedited by bringing the awards and their disbursal in consonance with the principles of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation & Resettlement Act, 2013. Besides, the preparation of detailed project report, which used to be a very lengthy process earlier, has been revised to ensure faster and better quality.

How do you plan to revive stressed projects?

When the government came to power in 2014, there were 403 stressed projects in the road and highway sector worth Rs 3.45 lakh crore. However, they have been revived. Banks need to lend to projects which were stuck due to market slowdown and cyclical issues and not due to fraudulent activities. They need to classify investor or developer with bona fide and mala fide intentions, and should not treat both at par. Banks should take stern action against manipulators and those engaged in frauds, but help those with bona fide intentions and faced problems purely due to market conditions. This will transform the picture of the road sector.

What is the present status of the Bharatmala project?

This is a new umbrella programme for the highways sector that aims to optimise the efficiency of road traffic movement across the country by bridging critical infrastructure gaps. The first phase entails an investment of Rs 7.5 lakh crore, of which projects worth Rs 3.5 lakh crore will be launched in the current fiscal. Multi-modal integration is one of the key focuses of this programme. A total of around 53,000 km of NHs has been identified to improve national corridor efficiency, of which 24,800 km are to be taken up in Phase-I, which will be implemented between 2017-18 and 2021-22 in a phased manner. This includes 5,000 km of national corridors, 9,000 km of economic corridors, 6,000 km of feeder corridors and inter-corridors, 2,000 km of border roads, 2,000 km of coastal roads and port connectivity roads and 800 km of greenfield expressways. Bharatmala will be a major driver for economic growth in the country. It is estimated that more than 35 crore man-days of employment would be generated under Phase I of the programme.

Shipping sector is struggling for want of investments. How will you get Sagarmala executed under such circumstances?

It is based on the vision of port-led development, and focuses on logistics intensive industries. The programme aims to unlock the full potential of India's coastline and waterways. The projects have been identified across the areas of port modernisation & new port development, port connectivity enhancement, port linked industrialisation and coastal community development. There are 12 major ports and 200 minor ports across India. The profit earned by these ports is increasing annually. In 2014-15, these ports made profit of Rs 3,000 crore which surged to Rs 4,000 crore in 2015-16, Rs 5,000 crore in 2016-17 and Rs 7,000 crore in 2017-18. The total investment is estimated at Rs 16 lakh crore, of which investment of Rs 3 lakh crore is already launched. Total 224 projects worth Rs 1.85 lakh crore were awarded till March 31, 2018 and 196 projects worth Rs 71,868 crore to be awarded in 2018-19. Already 59 projects worth Rs 11,299 crore are completed and another 98 projects worth Rs 31,046 crore are to be completed in the current fiscal. Cochin Shipyard was listed on August 11 last year. The issue of Rs 1,442 crore was subscribed 76.28 times.

You have been quite vocal on the promotion of public transport and also on electric vehicle. Can you tell us the roadmap?

Public transport will have to be focused now, including metro, mono, mass rapid transport based on electricity, ropeway, cable car and funicular railway. This apart, tram running on wheels and not on track through an electric cable can be another mode of transport that can be considered in 1,000 cities. Point-to-point air conditioned double-decker buses with executive class on the upper deck and economy class on lower deck can be deployed, say between Mumbai and Ahmedabad or Mumbai and Pune. In my view, the public transport is important and cost efficient, pollution free. My ministry is actively promoting electric transport. The ministry has proposed Mumbai-Delhi highway at the cost of Rs 1 lakh crore where one lane on each side will be reserved for electric trucks which will be quite cost effective. For all new car sales, the government wants it to be electric models by 2030 as part of a plan to combat climate change. Ro-Ro services will be encouraged and water based transport will be promoted, which will be environment and eco friendly.

Is Tesla coming to India?

I had met Tesla co-founder and CEO Elon Musk and invited him to set up operations in the country. However, the electric-car maker has chosen China for its first plant overseas.

What is happening with the Motor Vehicles Amendment Bill?

The Bill is currently pending for approval in Rajya Sabha. I am hopeful that it will be passed in the coming monsoon session. The Bill addresses road safety issues by providing for stiffer penalties, permitting electronic enforcement, improving fitness certification and licensing regime, statutory provisions for the protection of good Samaritans and recognition of IT enabled enforcement systems. It also paves the way for reforms in public transport, which, in turn, will help in improving road safety. With online registration, bogus licences will not happen and corruption will end at the level of regional transport office.