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Union Road Transport and Highways Minister Nitin Gadkari said infrastructure companies should float on their own non-banking financial companies (NBFCs) to fund road construction-related projects. He further adds that the National Highways Authority of India (NHAI) should also have a financial arm like the Power Ministry’s Power Finance Corporation (PFC) or the Railways Ministry’s Indian Railways Finance Corporation (IRFC).

While speaking at an Assocham event he said that “ Infrastructure companies are now investing huge money on infrastructure… Infrastructure companies should also float their own non-banking financial companies (NBFCs) to fund road construction-related projects.

Alongside he also suggested such projects should tie up with foreign funds to reduce dollar hedging risk, as they can mortgage toll rights.

Mr. Gadkari emphasised that there is a need to develop an innovative financial model for the highway sector as it is difficult to develop infrastructure only with government money.

He said to have observed the Ministry of Road Transport and Highways (MoRTH) has a road length of 1 lakh kilometers, whose internal rate of interest is more than 13 percent. MoRTH s also considering a proposal to set up a well-committed agency which will buy or restructure stalled projects.

A few years back the ministry observed road infrastructure-related projects were delayed due to delays in land acquisition and environmental clearances.

“But now the situation has improved,” he said.

Gadkari asserted that India’s road infrastructure will be at par with the United States by 2024.