The government is banking on the infrastructure sector, which needs huge capital inflows, to help steer the economy back in the direction of high growth figures. Union minister of road transport, highways and shipping, Nitin Gadkari, tells HT that a cut in lending rates is the need of the hour. Excerpts from an exclusive interview:
Investors cite the cost of capital as a big hurdle. What are you doing about it?
For success of the PPP (public-private partnership) model it is important that the lending rates are cut. Worldwide the interest rate is between 2-3%. But in our country it is between 12% and 13%. It is economically not viable. So if we want to make a success story we need to reduce our interest rate. I have requested the finance minister to consider this and he is trying his level best to see how it can be done.
With tepid response from domestic players, are you planning to get foreign investment in the highway sector?
It’s an option that we are contemplating… whether it is possible for us to get FDI with low interest in infrastructure. We are trying for that, but it requires a good system. But we are hopeful that in due course of time, we will be able to invite foreign investment to infrastructure, particularly the road sector, shipping and inland waterways.
Do you think that the policies of the UPA government are responsible for such a large number of stalled highway projects? How much time do you think it will take to fix the issues?
I do not want to blame UPA or any political party. But the fact remains that on the one hand the government gave work orders to contractors but on the other could not give land clearance for three years; forest and environment clearance was stuck for another 2-3 years with the environment ministry. How can you expect the contractor to work on the project? Without giving clearances he cannot start work. But now we are sorting out these issues. The environment and forest ministry has cleared about 80 stuck projects. We want to make the decision-making process faster.
There is a view that the land acquisition law will result in escalation of project cost. Your comment.
Yes, we are aware that project cost would go up. But in a welfare state it is our responsibility to think of the poor and the farmers. It’s the farmers’ land, and they have to be compensated. Cost is not a problem… we will pay for it. What is important is to ensure that the decision-making process is faster and the time taken for giving clearances is reduced.
What is the government’s plan for shipping and inland waterways?
There are 12 major ports with us and these are heavily congested. We want to double the capacity of our existing ports so that the existing capacity of our waterways can be exploited to their full potential. Our priority is to see how we can divert our road traffic to inland waterways.
This will not only reduce cost but will check pollution and also boost business. We have already started transporting coal from Haldia to Farakka through waterways. Similarly we have started a service from Goa to JNPT (Jawaharlal Nehru Port Trust) by which you do not need to take a truck, but can move containers by sea.