Govt drops plan to directly sponsor roads sector InvITs
ECONOMY & POLICY

Govt drops plan to directly sponsor roads sector InvITs

The ministry of road transport and highways has abandoned a plan to invest public funds in infrastructure development through government-sponsored road and highway sector InvITs.

The objective currently is to bring retail investment through non-government and private sector InvITs, for which market regulator permission is pending.

Previously, the government proposed launching various road and highway InvITs in the public sector to generate funds from small investors with guaranteed returns backed by sovereign guarantees.

However, the long gestation period of highway projects, as well as their changing revenue streams, has spurred a rethink: rather than providing guaranteed returns on these financial instruments, the Centre will allow the market to determine returns.

The change in plans means MoRTH will no longer sponsor new public InvITs. However, all private InvITs could tap funds from retail investors. Leading InvITs registered under Sebi include Brookfield-sponsored India Infrastructure Trust, MEP Infrastructure Investment Trust, IRB InvIT Fund, Tower Infrastructure Trust, and IndInfravit, sponsored by L&T Infrastructure Development Projects.

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The ministry of road transport and highways has abandoned a plan to invest public funds in infrastructure development through government-sponsored road and highway sector InvITs. The objective currently is to bring retail investment through non-government and private sector InvITs, for which market regulator permission is pending. Previously, the government proposed launching various road and highway InvITs in the public sector to generate funds from small investors with guaranteed returns backed by sovereign guarantees. However, the long gestation period of highway projects, as well as their changing revenue streams, has spurred a rethink: rather than providing guaranteed returns on these financial instruments, the Centre will allow the market to determine returns. The change in plans means MoRTH will no longer sponsor new public InvITs. However, all private InvITs could tap funds from retail investors. Leading InvITs registered under Sebi include Brookfield-sponsored India Infrastructure Trust, MEP Infrastructure Investment Trust, IRB InvIT Fund, Tower Infrastructure Trust, and IndInfravit, sponsored by L&T Infrastructure Development Projects. Also Read Delhi to build flyover to curb traffic First transport nagar in Jharkhand anticipated being finished in two..

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