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Emphasising the importance of developing infrastructure, the Minister said that if India aspires to achieve the export target of US $ 150 billion by the year 2008-09 and to double its share in world exports from merely 0.8% to 1.5%, the country would have to put into position its infrastructure backbone expeditiously to provide comfort to the domestic and foreign investors.

Pointing out that Infrastructure projects have long gestation periods and, in most cases, they may not be financially viable on their own and their requirements often fall short of the budgetary allocations made for such projects, he said that the Government is promoting PPP projects with viability gap funding. This would help in utilising private sector resources and to rope in techno-managerial efficiencies, he added. This viability gap funding would reduce the capital cost of the projects by credit enhancement and make them viable and attractive for private investments, he said and added that this was in contrast with the approach when the Government used to directly construct roads under the Engineering Procurement and Commissioning (EPC) contracts. The Minister hoped that the private sector would bring in its efficiency in development and maintenance of the National Highway network and would also provide an opportunity to the private sector participants to synergise with other key sectors of the economy.

Thiru Baalu said that the Government has laid down comprehensive policy guidelines for private sector participation in highways sector and have also announced several incentives such as tax exemptions and Duty-free import of road building equipment and machinery. He said that Model Concession Agreements have also been finalised for major road projects. To address concerns of private sector with regard to the huge upfront capital investment and high risk of revenue collection, the Government has decided to offer some projects on annuity basis in addition to giving several incentives. For this purpose, a Concession Agreement for ‘Build, Operate and Transfer’ (BOT) projects under annuity has been finalised and a number of projects have been taken up on annuity payment system, he informed the participants.

Referring to some Policy initiatives, the Minister said that the NHAI Board has been vested with sufficient powers to sanction projects on a fast-track basis and NHAI is also being strengthened further to enable it to take up larger programmes at an accelerated pace. The concerns voiced by investors regarding delays on account of land acquisition, utility shifting, environment approvals, etc., have been addressed by setting up of a Committee of Secretaries under the Chairmanship of the Cabinet Secretary, he said.

Thiru Baalu said that he has asked the State Governments to facilitate barrier-free movement of vehicles through a system of integrated Check Posts as the average distance covered in a day by the commercial vehicles is 250-400 kms, which is not encouraging even from the standards of developing countries leaving aside the developed countries. He said that his Ministry intends to take the initiative beyond by introducing computer chips on the vehicles, which can be read by the new generation electronic systems.

Thiru Baalu said that our approach is to bring about the much-needed synergy between ports and road network. It would be appreciated that we have decided to provide comfort to investors in the port sector by way of assured connectivity to the hinterland, he said. “Since port connectivity road projects may not be viable on a stand-alone basis, we have decided that these will be built and operated by Special Purpose Vehicles (SPV), where ports, National Highways Authority of India (NHAI) and Urban Development authorities will be project sponsors”, he said.

Referring to the Port Sector, the Minister said that recognising the pivotal role to be played by the 12 major ports of the country; the Government has formulated a comprehensive National Maritime Development Programme (NMDP). He said that under the Programme, a total of 387 projects have been identified which involve an investment of about Rs.1,00,000 crores (approximately US $ 22.3 billion). In the ports sector, 276 projects would be implemented by 2011-12 involving an investment of about Rs.55,000 crores (approximately US $ 12.4 billion) he informed. Bulk of the investments in the port sector projects would be made through PPP, he said and added that so far, the interest shown by private sector in port projects has been heartening. He however expressed the hope that the private sector participation would grow further in coming years.

Regarding Shipping industry, the Minister observed that Indian shipping is poised to make the best out of the growth opportunities by not only focusing on India-centric trade but also adopting a more global outlook to utilise cross-trade opportunities. In the shipping sector, a total of 111 projects have been identified under the NMDP with an estimated investment of about Rs.45,000 crores (approximately US $ 9.9 billion), he informed and added that the projects include tonnage acquisition, maritime training, coastal shipping, ship building and building of inland water transport infrastructure. These projects include establishment of two new international-standard shipbuilding and ship-repair facilities, one each on the East and West Coasts through PPP. To ensure that India continues to excel in maritime education, establishment of an international-standard Maritime University at Chennai is being considered by the Government, he informed.

The Minister said that with the completion of the prestigious Sethusamudram Ship Channel Project in the year 2008, the critical gap in our transport logistics from West Coast to the East Coast and vice versa, would be filled besides fulfilling the century-old ambitions of the people of peninsular India. By 2008, we would connect all the major ports on the East Coast and West Coast with world-class roads so that both international and coastal cargo can move seamlessly, he said.