India to invest $1 trillion in infrastructure in 12th Five Year plan

New Delhi, September 12: Prime Minister Manmohan Singh Monday said good road infrastructure was crucial to achieving nine percent growth, targeted for the next Five Year Plan (2012-13 to 2016-17), and adequate investment would be made towards that.

At the same time, he insisted that the awards on private sector were placed in a fair and transparent manner so as to dispel any fear or charges that the government was resorting to any form of favouritism or arbitrary decisions. Infrastructure will play a key role in achieving our growth target of of nine percent. Our effort is to double the investment of $500 billion in the 11th Five Year plan to around $1 trillion in the 12th plan, the prime minister said. It is also necessary to ensure projects are awarded in a fair and transparent manner to avoid suspicion of favouritism, he told a conference on challenges and opportunities in public-private partnership in national highways. According to Road Transport and Highways Minister C.P. Joshi, the government will award contracts under public-private partnership to lay around 7,800 km of national highways worth an estimated Rs.50,000 crore ($11.1 billion) by the end of this year. Contracts worth Rs.21,000 crore have already been awarded in the first four months, he said, hoping that the target of 20 km of national highways every day would be met. Inaugural Address of the Prime Minister at the Conference on Public-Private Partnership in National Highways

It gives me great pleasure to inaugurate this important Conference on Public-Private Partnership in the development of the National Highways. As the Deputy Chairman has just now mentioned, the Approach document to the Twelfth Five Year Plan, which was approved by the Full Planning Commission some two weeks ago, has set a target of 9 per cent growth per annum for the five year period 2012-13 to 2016-17. One of the most important preconditions to achieve this growth is doubling the investment in infrastructure during the next five years. From a rough figure of five hundred billion dollars in the Eleventh Five Year Plan, our aim is to raise the level of investment in the infrastructure to about one trillion dollars. And it goes without saying that it seems a very challenging task, but I am convinced that our economy has the resilience to live up to challenges that lie ahead. Good roads are essential element of infrastructure for providing industry and agriculture with the connectivity to markets for growth in production and trade, and more generally for improving the quality of life of citizens. They are crucial not only for accelerating the growth rate, but also for making whole growth process more socially and economically inclusive. I am happy to say that we have taken impressive strides in developing an extensive road network to benefit all sections of our population. We have launched a rural roads programme that is aimed directly at improving connectivity in our vast rural areas. We have also launched a major programme for upgradation of highways. Financing an ambitious highways programme will no doubt require substantial resources. Some parts of the network can only be developed through public investment. There are however areas where private investment can be invited, based on affordable user charges with some capital subsidy as necessary. The Twelfth Plan strategy calls for exploring the scope for such Public Private Partnership as much as possible. I have often said Public Private Partnership is private profit in service of public at large. We have been successful in attracting large volumes of private investment in this sector. Contract awards exceeded about 4,800 km in the last financial year, and the Road Transport & Highways Ministry is well poised to award of 7,300 km this year, to fulfill our governments resolve to build 20 km a day. The National Highways Authority, which deals most with the roads that can attract private capital, has made PPP the preferred mode for most of its projects. PPP projects take much less time to complete and the Government does not have to bear cost overruns. This will not only enable us to leverage our limited public resources but also improve efficiency of service delivery. I am happy to note that India has attained the second rank globally among developing countries in attracting private investment for infrastructure projects and for this I compliment the Ministry of Road Transport and Highways and the concessionaires of the road sector for contributing a significant chunk of this investment. For a large road building programme, efficiency, economy, competition and transparency are vital the touchstones that should be used for judging our level of success. These are especially important when we deal with the private sector. We must remember that these are public projects where public interest must be foremost in our mind. It is necessary to demonstrate that the award,

construction and operation of these projects is based on a fair and transparent approach which eliminates any suspicion of favouritism or what might be described as crony capitalism. This is why we have been encouraging the use of standard documents and processes to streamline and expedite decision-making process by the concerned authorities in a manner that is fair, transparent and competitive. I am happy to note that the highway authorities are relying on a set of standard documents such as the Model Concession Agreements and bidding documents. This approach has contributed significantly to the recent strides in rolling out a large number of Public Private Partnership projects in the highways sector. I have been told about the emphasis on transparency and competition in the award of Public Private Partnership projects in the roads sector which has led to a very robust and competitive bidding that has saved very large sums for the exchequer by limiting the capital subsidy or enhancing the revenue share. The National Highways with a total length of over 71,000 km serve as the arterial network of our country. However, the flagship National Highways Development Programme has only addressed about 25,000 km so far. In the recent meeting of the full Planning Commission, we have endorsed the proposal of the Ministry of Road Transport and Highways to take up a large programme for developing the national highways in far flung areas across the length and breadth of our nation. At present, there are about 20,000 km of national highways which have only a single lane. A time-bound programme for widening these roads to two-lane standards would be taken up through turn-key contracts that would ensure speedy and cost-effective outcomes. I would like to request the my friend Dr C P Joshi to accelerate this programme to increase the reach of the NHDP across the country. The State Governments have a very crucial role to play in the road sector. While all roads, beginning from rural roads to state highways lie entirely in their domain, the support of state governments is absolutely essential for development and operation of the national highways as well. I would urge the State governments to formulate their respective State Highway Development Programmes for a coordinated and time-bound development of all roads in their respective States. I would urge the States to work closely with the Central Government so that a modern road network can be developed in each State. Infrastructure projects face financing constraints including especially the need for debt of longer tenure. The India Infrastructure Finance Company is a vehicle for promoting the flow of long term funds. The Finance Ministry is also taking the initiative to set up Infrastructure Debt Fund to enhance the flow of the much needed long-term debt in infrastructure projects. Looking ahead, we have also constituted a High Level Committee to suggest measures necessary for financing our ambitious programme in infrastructure development during the Twelfth Plan. I am happy to see enthusiastic participation of investors, financial institutions, consulting firms and experts in this conference. Without their active participation in the road sector, the Public Private Partnership programme obviously cannot succeed. We welcome their participation and I assure them of a fair and transparent environment that would enable their capacities and enterprise to flourish for delivering a truly meaningful partnership.

This Conference on Public Private Partnership in National Highways is a timely event that will serve as a forum for sharing knowledge and experience with a view to improving service delivery in this very important segment of our infrastructure. I hope that the achievements of the highways sector in harnessing Public Private Partnership will also serve as an example not only for other infrastructure sectors but also social sectors such as education and health where the need for growth is even more pressing. With these words I take pleasure in inaugurating this conference. I wish the Conference all success. Bibliography :::::::: http://www.pravasitoday.com/india-to-invest-1-trillion-in-infrastructure-in-12th-five-year-plan

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