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The U.S.-India Business Council,inpartnership with the Confederation of Indian
Industry,hosted Honorable Kamal Nath, Minister for Road Transport and Highways,
for an intimate roundtable in America`s financial capital - focusing U.S.
investment attention on India`s roads and highways. Minister Nath is in the
United States for a week, capping off a world tour to revive foreign interest in
India`s massive infrastructure development, particularly roads and highways.
India`s road network of 3.32 million km is second only to the United States and
is in need of major upgrades.
India is set to launch the world`s biggest Public Private Partnership program
that will result in the development of 15,000 km of roads and highways over the
next three years at a cost of $70 billion (about Rs 350,000 crore). The current
five year plan calls for $500 billion in upgrades to India`s infrastructure
sector - with about one-third of the investment coming from the private sector.
Speaking to USIBC`s premier engineering, construction and investment firms,
Minister Nath said, "This is one of the most important projects the Government
of India has ever undertaken. Roads and highways cross the country and touch
every facet of life, as well as provide vital connectivity for trade and
commerce."
The 2009-2010 Union Budget announced a 23% increase in the country`s highway
budget - lifting it to $4 billion. Minister Nath has presented detailed plans
for increasing the pace of road building, up from 2 km a day to 20 km a day. The
plans - with timelines for land acquisition, feasibility studies, bidding and
building - envision the construction of 127 roads in the coming year, at a cost
of $20 billion (about 982 billion rupees). Fifty percent of the projects would
be undertaken on a "Build-Operate-Transfer (BOT)" basis.
Accompanying Minister Nath was Mr. Brijeshwar Singh, Chairman of the National
Highways Authority of India, which is already inviting bids for 60-70 projects
in the current financial year for construction of 7,000-8,000 km of highways and
is setting up an "Expressway Authority," a first for India.
U.S. developers and construction companies have expressed concern with aspects
of the model concession agreement (MCA), including the termination clause, exit
clause, conflict of interest and definition of associates clauses. Minister Nath
assured that many of these issues would be ironed-out by the end of the month
and said institutional capacity building, feasibility studies and mega projects
would herald a new era of development of infrastructure projects.
The U.S.-India Business Council (USIBC), formed in 1975 at the request of the
Government of India and the U.S. Government to deepen trade and strengthen
commercial ties, is hosted under the aegis of the U.S. Chamber of Commerce. The
U.S. Chamber of Commerce is the world`s largest business federation representing
more than 3 million businesses and organizations of every size, sector and
region. |
