The government on Friday said it is planning to construct over 50,000 km of highways by enabling Infrastructure Investment Trusts (InvIT) as a noticeable vehicle for gathering funds for road infrastructure.
Road Transport and Highways Giridhar Aramane when in a meeting with leading and large investor groups 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.
Armane said the vehicle promises to be an attractive one for mobilizing funds for road development and guaranteed investors that the plus point of InvIT will be selected carefully to yield fascinating returns and lessen inherent risks.
Armane also said the proposed roads have a long history of tolling and thus the price discovery is likely to be plentiful. Efforts to facilitate the realization of value for investment will be made, the statement said.
To manage the company professionally, investing partners will be brought into the board of directors. It will also democratize the functioning of the investment manager. 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 accumulate small sums of money from a number of investors to put in assets that give cash flow over a period of time.
The Union Cabinet has already approved the setting up of InvIT.
By reducing logistic costs, connect, hinter-land to hubs, and cater to rapid growth in vehicle ownership, the development of roads will give a boost to the economy.
