India long way off from 20-km per day road target

Workers use road rollers during the rebuilding process of a road in Srinagar in this July 2009 file photo.

NEW DELHI (Reuters) - India is likely to build only 12-13 kilometres of road a day in the current fiscal year to end-March 2011 against a 20 km per day target, Transport Minister Kamal Nath said on Monday.

"The road ahead is very long. I can say only this," Nath said while addressing a conference on infrastructure.

India had last year set a target of building 20 km (12 miles) of roads each day, as part of its plans to improve infrastructure in Asia's third-largest economy, but achieved only less than half of that due to problems in acquiring land and awarding contracts.

Foreign investors have shied away from the sector even though the government has allowed 100-percent foreign direct investment, due to problems in land acquisition and difficulties in collection of toll tax.

"This financial year (2010/11), we should be close to building 3,000 km," Nath said.

But, achieving that target will need an investment of about 2 trillion rupees ($45 billion) annually, of which the government expects 60 percent to come from the private sector, he said.

India needs to spend $500 billion in the five years to 2012 to overhaul its congested ports and airports, fix its potholed roads and generate more power, the government has said, to sustain 8-9 percent economic growth.

India, with a total length of 3.3 million kilometres of roads, has the third-largest road network in the world, said a report by Ernst & Young on Monday.

Analysts estimate poor infrastructure shaves an estimated 1 or 2 percentage points off India's annual economic growth, which slowed to 6.7 percent in 2008/09 after three years of 9 percent or more growth.

Prime Minister Manmohan Singh had said that building infrastructure will be crucial for India to achieve a growth rate of 10 percent in the next few years.

($1=44.3 rupees)

(Reporting by Manoj Kumar; editing by Malini Menon)

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