India seeks $2 billion more from World Bank for road projects
08 Dec 2009
The government will seek an additional $2 billion from the World Bank for road development projects apart from the $3 billion that it has already garnered, minister of roads and transport Kamal Nath said on Monday.
"We are looking at further borrowing from the World Bank. We have already posed a proposal for $3 billion and are looking at an additional $2 billion for road projects spread over the next three or four years," Nath told newspersons after a meeting of an empowered group of ministers for the road sector.
The 'eGoM' is an institution peculiar to India, where no policy decision can be taken by a cabinet minister without consulting even higher authorities. Since 1994 when the UPA government first came to power, all eGoMs have been headed by the current finance minister Pranab Mukherjee.
Apart from Nath, the EGoM for roads, which met for the first time on Monday, comprises Mukherjee and Planning Commission deputy chairman Montek Singh Ahluwalia, apart from various officials.
Nath said his ministry is looking at various options to raise Rs3,00,000 crore that he wants to invest in road developments projects over financial year 2010-11. In addition to this, he said the government is also considering the options suggested by the B K Chaturvedi committee to raise finances.
The Chaturvedi committee, set up by Prime Minister Manmohan Singh in August for speeding up the road development programme, has recommended issuing bonds with longer tenure, and availing a line of credit from state-owned Life Insurance Corp and pension funds for raising finances.
About raising the investment cap on 54 EC bonds that the National Highways Authority of India issues to raise money, Nath said, "We are looking at it."
NHAI, the nodal agency for implementation of the national highways programme, issues 54 EC bonds with a lock-in period of three years and an investment cap of Rs50,00,000 for an individual. It has proposed raising this cap to Rs2 crore.
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