Minister for road transport and highways Nitin Gadkari pitched for the setting up of a dedicated funding agency for the highways sector along the lines of the Power Finance Corporation (PFC) or the Indian Railway Finance Corporation (IRFC).
Speaking at a virtual event organised by Confederation of Indian Industry (CII), the minister also said he would discuss with the Reserve Bank governor on the development of a scheme for using the country's forex reserve for infrastructure development.
Gadkari said the PFC-like financial institution can be set up in a joint venture mode in which National Highways Authority of India (NHAI) can have some stake while financial institutions can have the remaining. Such an institution will create more wealth for the country, generate potential for employment and change the country's infrastructure landscape.
The need for such an institution arises as “cooperation from the banks is not so easily available” for highway projects proposed to be built under build-operate-transfer (BOT), public-private partnership (PPP) and hybrid annuity model (HAM). Developers' previous track record is also to be blamed for banks' apathy, he said.
MoRTH was earlier in talks with multilateral agencies like the World Bank and the Asian Development Bank aimed at ensuring low-cost funding for the infrastructure space, but the response was not up to the satisfactory level.
The minister, however, reiterated that NHAI did not have any financial problem, thanks to monetisation of stretches and increasing toll collection which might go up to Rs 1.4 lakh crore annually in the next 3-4 years.
He said using surplus forex reserves of the country, which touched a record high of $620.57 billion for the week ended July 30, can be used for low-cost infrastructure funding.