US pension funds are expected to contribute the lion’s share of overseas investment into India’s roads network, according to the country’s minister for road transport and highways, Kamal Nath.
In a presentation to investors in New York, reported by Bloomberg, Nath said overseas investors are likely to commit $10 billion to the country’s roads over the next three years. He added that “buyout firms” would most likely invest in road building while pension funds would commit capital to the “post-construction” stage.
Nath said other sectors, such as real estate and equities were currently being shunned by overseas investors in favour of infrastructure projects, which he said are “not only viable, but profitable.”
Nath’s speech to US investors was part of an international tour that also included Singapore, Zurich and London.
India’s prime-minister, Manmohan Singh, has said previously that the government will have spent $500 billion in the five years to 2012.
Nath, named the Infrastructure Investor Minister of the year for 2009 on account of the “promise he is showing as a potential enabler of a workable solution to the infrastructure challenge facing India”, needs to spend 1.5 percent to 2 percent of the country’s GDP annually to achieve that goal.
In response to meeting this target, set by the Indian Planning Commission, Nath has said: “How do you create greater economic activity across the country in all parts, rural and urban, economic activity which encompasses industry, trade, agriculture? One word: Roads.”