New Delhi:National Highways Authority of India (NHAI) has signed a Memorandum of Understanding (MoU) with National Investment and Infrastructure Fund (NIIF) on Monday, to execute fund arrangement for large size road projects, particularly greenfield projects, alongside evincing cooperation in the formation of Special Purpose Vehicle (SPV).
Addressing the media, Minister for Road Transport and Highways Nitin Gadkari said, "We hope that it will provide innovative financial models including that for the 24,000 km Bharatmala Pariyojana."
Gadkari further exuded confidence that the roadways sector can contribute to achieving PM Modi's dream of making India a five trillion dollar economy.
NIIF is a fund promoted by the Government of India to give a boost to the infrastructure sector in the country.
Speaking about the capabilities of NHAI, Gadkari said: "NHAI is raising finances for its mega-projects and is not dependent upon budgetary support. NHAI is capable of consuming maximum funds which it raises. Therefore, NIIF should be serious about raising funds for the highway sector."
Gen (Retd) VK Singh, MoS for Road Transport and Highways, hailed the MoU and expressed satisfaction at the pace of development in the country's infrastructure economy.
NIIF MD and CEO Sujoy Bose said, "We will try to get institutional capital for highway projects. The fund will look at TOT (toll-operate-transfer) bundles put on offer by NHAI besides hybrid annuity mode."
This arrangement of innovative alternate source of funding is being looked into by NHAI to attract international investors and fund houses who are willing to invest in road projects in India but not very keen to take risk related to the project execution.
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