National Highways Authority of India mulls IPO, to seek FM nod soon: Nitin Gadkari

Nitin Gadkari

The National Highways Authority of India or the NHAI will likely be launching an initial share sale after getting approval from the Finance Ministry.

Nitin Gadkari, Union Minister for Road Transport and Highways of India, said on the sidelines of an Indo-American Chamber of Commerce Convention, "It [IPO for NHAI] is in the process now. But I need approval from the Finance Ministry."

He, however, did not spell out any other details like the timing, maintaining that "it is in the process".

The Department of Investment and Public Asset Management in the Ministry of Finance looks at the divestment processes.

During a speech at the event, he made a passing reference to listing NHAI and added that the government is confident of getting investor subscriptions of up to Rs 10 lakh crore.

This comes after an impressive investor response to the Rs 1,560-crore initial public offering (IPO) of Cochin Shipyard, that was over subscribed 76 times.

Reiterating that he wants to use public money to build infrastructure in the country,  especially if banks are reluctant to do so, Gadkari said senior citizens can be given an additional interest of 0.5 percent.

Gadkari expressed his displeasure that banks were taking up to 12 months for the financial closure of a project and so the NHAI has enough money to undertake projects by itself in the EPC (engineering, procurement and construction) mode.

He said despite the dark history of non-performing assets, Gadkari said he expected bankers to be more forthcoming and look at projects in a newer way.

"I like people who commit mistakes. I dislike honest people who don't want to take a decision," he said.

The ministry has gone for the EPC mode in the Rs 44,000-crore Mumbai-Vadodara expressway project, he said, asserting that there is no dearth of funds for such projects.

The minister, however, said that the private sector-led Public Private Partnership (PPP) or Build Operate Transfer (BOT) routes is the ideal way to do infrastructure projects.

Gadkari said the ministry will start using the TOT (toll operate transfer) in about six months and start a pilot project under the architecture in a month.

However, when it comes to infra projects, road transport is the last priority in the scheme of things, Gadkari said, adding that first choice is water and then rail.

He said if the auto sales continue to grow at the current pace, the government will have to build an additional lane in the over 2 lakh km national highway network every three years, which will entail an investment of Rs 80,000 crore.

Traffic on the road is very high and the minister said running public transport on electric motors is the need right now.

He said the government is mulling to start 30 rural connectivity projects at an investment of Rs 8 lakh crore, of which five will be started in three months.

It has already given out works of over Rs 5.6 lakh crore on roads and another Rs 3 lakh crore of works are in the pipeline, he said.

He also rued that land acquisition continues to be a problem when it comes to road building.

Gadkari also warned cement companies against cartelisation and rising prices, saying there's a pending proposal to increase output through ten state-run plants which can be activated.

Urging investors to be more active in India, Gadkari wondered why only a few of the many investor delegations he meets actually invest.

Gadkari said despite a slew of sops given by the government, he cannot understand the reasons for a low response from companies for investing in cruise tourism.

Pointing out at the case of an amphibious ship which has not rolled off for six months due to want of court permissions to build a landing ramp, Gadkari said public support and a positive attitude for development is essential.

In Maharashtra, the ministry has undertaken projects worth Rs 3 lakh crore in the last three years and saved Rs 5,000 crore in the last three years by liberalising tender norms, he added.

(With inputs from PTI)