India needs Rs 19 lakh cr for roads in 5 years, needs innovative financing: KPMG
New Delhi, September 4 () It is estimated that the construction of roads in India will require around Rs 19 crore in the next five years and innovative financing mechanisms must be established to address any funding gap, according to a report the consulting firm KPMG.
India has the second largest road network in the world and the Ministry of Road and Highway Transportation (MoRTH) plans to develop some 60,000 km of roads over the next five years.
The MoRTH aims at an average road construction rate of 40 km per day, said the KPMG report, entitled 'Road and motorway sector: current trends and future road map'.
Assuming an average construction cost of approximately INR 30 million rupees per km (including the cost of land acquisition), and taking into account inflation for the cost of road construction in a conservative 3 percent, the total financing requirement For five years it is estimated at approximately Rs 19 lakh crore which equals an average annual fund requirement of approximately Rs 3.8 lakh crore, said the report, published at an IIC event.
In affirming the need to explore innovative financing mechanisms to address the financing gap that is being observed in the sector, he said that the focus levers that have been identified should be constructed.
He said the sources of financing are limited. The Ministry has to take advantage of internal extrabudgetary resources as much as possible, subject to controlling the scope of future liabilities and added that the probable options for raising capital are bonds, masala bonds and debts. of multilateral financial institutions.
In addition, he said policy reforms should continue in the future.
Other measures that can be explored are the reduction of the tax on infrastructure bonds and the extension of the tax exemption to infrastructure developers. You can also explore some innovative PPP modes similar to the lower present value of revenue, the report said.
On the public-private partnership (PPP), he said that this is the need of the hour.
The report also said that many problems have been affecting the road and highway sector in India, including aspects such as land acquisition.
He stressed the need to adopt sustainable transport approaches and said that it can be widely adopted in the future. Some of the ways to help ensure sustainable development are the adoption of electric vehicles. NAM HRS