Kamal Nath, India’s minister for road transport and highways, said at an event organised by IDFC Securities in Singapore that he will be meeting with Singaporean sovereign wealth fund Temasek Holdings today to discuss the establishment of an investment fund focused on India’s infrastructure.
Temasek is an active investor in India. Just two months ago, it invested $200 million for an undisclosed stake in GMR Energy, an Indian power generation, transmission and distribution company.
Nath told reporters in Singapore today he will be speaking with Temasek in order to “take up with them to raise an infrastructure fund” for India. While it is too early to talk about the potential size of the fund and other specifics, Nath said the fund would not be focused on just roads but include other areas such as ports and airports in its remit as well.
India first proposed the idea of an infrastructure fund to Temasek in a meeting with Ho Ching, its chief executive officer, in October last year, Nath said. The Wall Street Journal reported yesterday that India is in talks with Temasek to set up a $2 billion fund for the country.
“There’s very positive sentiment towards investing in India, particularly in the infrastructure sector,” Nath said. While in Singapore, he has met with a number of investors from across the world, he added.
When asked about the chief concerns raised by potential investors, Nath replied: “One of the concerns expressed is land acquisition – I’ve dispelled that by saying we have changed the procedure. The biggest problem was the process of land acquisition rather than land acquisition itself being a contentious issue.”
There have been no issues with prices paid for land, he said, adding that the ministry acquires land under the National Highways Authority of India Act and can pay at par with market rates.
Over the last 12 months, between $2 billion and $3 billion has been committed by foreign investors in India, and, in this timeframe, the government has offered road projects to the tune of 7,800 kilometres. Carrying forward the road works already in progress, the country currently has 12,000 kilometres of roads being built. Over the next year, India will offer another 12,000 kilometres of road projects, Nath said.
India is aiming to lay out 20 kilometres of roads a day over the next year.