Consider forming infra fund to finance road projects, says Gadkari

New Delhi: Union Minister Nitin Gadkari on Friday suggested to major highway builders and private companies to look into the option of floating an infrastructure finance fund or non-banking financial company to fund road projects.

Replying to a query at a virtual event organised by industry body Assocham, Gadkari also said only big contractors who are financially strong and have good relations with banks are getting funds. "Why don't you find an alternative? Each of you should put Rs 100 crore... to form an infrastructure finance company. I will ask NHAI to put equity and then you tie up with a foreign fund.

"...the banks will behave only when they come to know that you have some other option. That's how things work," the road transport and highways minister said. Gadkari emphasised that the government wants to support the industry.

"...the people who are competent but banks are not supporting them, they are not in a position to bid for highway projects," he noted.

Gadkari also pointed out that the Indian Railways has got the Indian Railway Finance Corporation (IRFC), the power ministry has the Power Finance Corporation (PFC) but the highways ministry does not have a financial arm to provide support to the

contractors.

Addressing a virtual event organised by industry body ASSOCHAM, Gadkari further said to achieve the GDP of $5 trillion by 2024-25, India needs to spend about $1.4 trillion over these years on infrastructure.

"COVID-19 pandemic has caused a slowdown in India. But its inherent resilience and capability will help it transform into a new India with an accelerated growth path fuelled by infrastructure," the Road Transport and Highways minister said.