Govt to ease rules for road project investments

By Prashant Mehra

MUMBAI (Reuters) - India aims to reform policy and ease investment rules for infrastructure projects in an effort to attract capital to rebuild and expand its overburdened road network, the road transport minister said on Friday.

The government hopes to reduce the likely gap between planned and actual investment by ensuring more financial participation and through measures to improve the risk-return equation for private players, Kamal Nath said in a meeting with investors and bankers.

"The lack of roads, and in the larger context, all of infrastructure, is a major challenge to our economic reform programme," the minister said.

The National Highways Authority of India will seek bids for 6,563 kilometres of road projects in the next two quarters costing 604.8 billion rupees ($12.4 billion), its chairman told Reuters on Friday.

India has a road network of about 3.4 million km (2.1 million miles), of which about 70,000 km are national highways.

Nath said the government expected to add 12,000 kilometres of roads this year at a cost of 1 trillion rupees ($21 billion), and said preference would be given to the toll model for new roads.

Nearly 60 percent of the new roads are planned on the toll-based model, he said.

"We should look to toll roads as far as possible. We should look to build up specialised tolling companies, as in Europe," he told reporters at a press conference after the meeting.