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According to a government statement,  InvIT is an attractive vehicle for mobilizing funds for road infrastructure. The government has said it is planning to construct over 50,000 km of highways. 

 

While addressing a meeting of leading and large investor groups in New Delhi, Secretary - Road Transport and Highways Giridhar Aramane said the ministry has plans for the construction of over 50,000 kilometers of highways, a majority of those will be 4 and 6 lanes wide. 

The secretary called upon the investors to consider that InvIT has scope for broad basing the investor groups.

Aramane further said it promises to be an attractive vehicle for mobilizing 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 also said the proposed roads have a long history of tolling and thus the price discovery is likely to be handsome.

Aramane added that the functioning of the the investment manager will be democratized 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 a 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 the National Highways Authority of India (NHAI) under the Ministry of Road Transport and Highways to monetize completed national highways that have a toll collection track record of at least one year and NHAI reserves the right to levy a toll on the identified highway.

The statement also 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 program of implementing National Infrastructure Pipeline to realize the potential of the Indian Economy. Road development is one of the most important components of this program, 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.