Mumbai:Union Minister Nitin Gadkari assured investors on Friday that the internal rate of return (IRR) of infrastructure projects in the country is very high and that they should not worry about their investments in the sector. “The internal rate of return (IRR) is very high and there is no problem with the profitability (of infrastructure projects in the country),” said the Minister for Road Transport and Highways.
He spoke at a national conference on investment opportunities in highways, transport and logistics.
He said the Mumbai-Pune Express Highway, which was built for Rs.1,600 billion, was monetized initially for Rs.3,000 billion and later for Rs. 8,000 billion.
The government won’t award projects until 90 percent of the land is purchased and forest and railroad clearing is complete, he said.
Gadkari assured investors that with all permits, there is minimal chance that an infrastructure project in the country will stall.
He went on to say that lowering logistics costs can boost economic growth.
While logistics costs in China are between 8-10 percent and 12-13 percent in America and Europe, they are 14-16 percent in India.
The minister explained that the reason for the high logistics costs in India is the lack of road and rail infrastructure.
According to him, the size of the automobile sector in the country could reach 15 million rupees in the next five years, compared to 7.5 million rupees now.
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