At the sixth edition of the FE CFO Awards function, minister for road transport and highways Nitin Gadkari spoke to Anant Goenka and Shyamal Majumdar on how he has converted problems into opportunities. Excerpts:
Could you share the story about how the Mumbai-Pune expressway was built? That was an example of how creative you are and how you used this to bring creativity to financing.
The Mumbai-Pune expressway was the dream of Balasaheb Thackeray. We needed to have an expressway because the old road was inadequate. The alternative was to have three alignments. We fixed the alignment, started land acquisition and floated the tender. Of the four responses, the lowest tender of Rs 3,608 crore was from Reliance . My estimate was it could be done at Rs 1,600 crore. There were a lot of controversies, differences of opinion and after many meetings we decided to reject the tender.
So, we came up with an idea to raise funds from the market so that we could save Rs 2,000 crore and we created MSRDC (Maharashtra State Road Development Corporation). First we entered the market for Rs 600 crore but the issue was oversubscribed and we got Rs 1,189 crore. For the first time we used the concept of project management consultancy and all the responsibility was given to one company. Again we went to the capital market to raise Rs 500 crore and we received Rs 1,050 crore. With that we constructed the Mumbai-Pune express highway. Later, we raised funds and constructed the Bandra-Worli sealink and 55 flyovers in Mumbai. We have returned all the money and the Maharashtra government monetised the Mumbai-Pune express highway for Rs 9,000 crore.
Money is not the problem if there is proven technology, economic viability, availability of raw material and marketability of the finished product but we need to understand how we can reduce costs and improve construction quality.
From annadaata our farmer has become urjadaata through ethanol. My dream is to make them bitumen daata. In Panipat, Indian Oil has started a project to make 100,000 litres of bio bitumen using 150 tonnes of rice straw. Although there is demand for 8 million tonnes, our refineries are making only 5 million tonnes. If we can get more, it can give farmers a turnover of Rs 35,000 crore and we can grow energy crops like bamboo to replace coal.
How did you manage the transformation of highways and expressways? In India, land acquisition is a very emotive issue but there have been no farmer protests.
There are problems no doubt but some people convert problems into opportunities. I had the opportunity to do projects worth Rs 50 trillion in my eight years. I was minister of shipping, ports, Ganga project and highways. No contractor is coming to my home. We are transparent and time-bound but if the work is not good then I fire them. We are quality conscious. We want to reduce the cost and also improve the quality.
I am planning to purchase 1,00,000 electric buses, which cost Rs 1 crore each. A viable business can be built around running electric buses between cities. With innovative models, we can make projects viable. I don’t need any help from corporate finance people, if they want they can come to me.
We have received a good response to our InvIT model. My idea is to take money from small people and give them a return of 8.05% per year and deposit the interest every month in their bank accounts.
Won’t the Budget taxation proposals for InvITs and REITs create problems?
That problem has been solved. Instead of the Rs 2 trillion performance guarantees, we can have insurance bonds. It can be a good business for financial institutions.
In 2014 when you took charge of the ministry , you talked about green fuel, EVs, ethanol and green hydrogen. But there was a lot of scepticism. Now you hear about EVs getting precedence over ICE engines, etc. As a minister, do you feel vindicated?
First of all, our imports of petroleum are of Rs 16 trillion, so it is an economic problem. Another problem is pollution. This is the time we can diversify agriculture towards energy. When I was talking in 2009 about ethanol, biofuels, no one was willing to believe me. Now there is a waiting list for EVs.
We export automobiles worth Rs 3.5 trillion and the industry is worth about Rs 7.5 trillion. In automobile manufacturing, we were at No. 4, Japan at No. 3, US at No. 2 and China at No. 1. Just a month back, we surpassed Japan and we are now third. As transport minister, I am confident that within five years we will be No. 1 in the world because of EVs and all the alternative fuels.
Just now the MD of Tata Motors was telling me his car is ready with the flex engine. Flex engine means you can use 100% bio-ethanol. Ethanol is Rs 60 and petrol is Rs 120. Now Bajaj, TVS and Hero are ready with flex engines. Toyota is going to launch a model that runs on 60% on ethanol and 40% on power. So this is the technology that is going to boost our agriculture. Now we can make ethanol from sugarcane juice, molasses, we can use corn, we can use rice. Surplus foodgrains are a problem since we do not have godowns to store them. Electric, ethanol, methanol, bio-diesel, LNG, CNG and hydrogen are the future. I am 100% confident that within five years there will be electric cars, flex engines. My dream is to remove petrol and diesel from the country.
Today, the share of agriculture growth in the GDP is 12% but it supports 65% of the population. If green fuel succeeds, the share of agriculture will go up to 22%. That will make our villages, rural, tribal economy strong. That will be very important for atmanirbhar Bharat.
Are you liked by environmentalists or disliked by them?
I am most sensitive to the environment. This year I planted 35 million trees and transplanted 3,50,000 trees. A microscopic minority does not plant a single tree and then gets the work stopped by filing PILs. When we were making the Bandra-Worli sea link, the press did a lot of stories that the Savarkar memorial will be destroyed, fish will die. A stay was obtained and the cost of the link increased from Rs 680 crore to Rs 1,700 crore, money which is going from the pockets of Mumbai residents. What is the price we are paying for that? On the one hand we need development and on the other hand we need to protect ecology and environment. We don’t want development at the cost of ecology and environment.
Travel time has been halved thanks to many projects. You are posing serious competition to your counterparts in the civil aviation ministry. The UDAAN project will be in serious jeopardy.
By December, I hope to build the Delhi-Mumbai project. By December, Delhi to Dehradun will take two hours, Delhi to Jaipur two hours, Delhi to Chandigarh 2.30 hours, Delhi to Haridwar 1.30 hours, Delhi to Amritsar four hours, Chennai to Bengaluru in 2:15 hours. On these roads I am trying to build electric highways. Electric buses and electric trucks will run on it and logistics costs will reduce substantially. Jet Airways had eight flights between Mumbai and Pune when I was minister in1995-2000. All of them closed down. After December, flights from Delhi to Dehradun may stop, Delhi to Amritsar may stop, Delhi to Jaipur may stop, Chennai to Bengaluru may stop but they will increase in other areas.
When will urban roads improve, especially in Bengaluru?
Actually, we are making a ring road for Bengaluru, costing Rs 17,000 crore, which will being some relief. But the Bengaluru traffic jam is a big problem, I am not capable of resolving it. You need to de-centralise the IT industry and you have to develop satellite cities. Now in Mumbai there is no land available for expansion. I am thinking of having double decker buses in the sky. We are also planning ropeway cable cars, 260 of them, costing Rs 1.25 trillion. We are using public transport, mass public transport on electricity, ropeways, cable cars and funicular railways. It is important to develop satellite cities in Pune, Bengaluru, Mangalore, Chennai and Kolkata.
If you have to choose a name plate outside your house, which would you prefer? Nitin Gadkari RSS or Nitin Gadkari BJP?
The RSS conviction is a part of my life. I am not a professional politician. I always feel that politics is an instrument of socio-economic reform. So I am RSS Swayamsevak and equally, BJP karyakarta. I won’t put a nameplate.
In 2029, who will be BJP’s principal opposition party?
I don’t know. My agenda is to make BJP strong.
Where do you feel most at home: Mumbai, Delhi or Nagpur?
For street food, you cannot beat Mumbai. Nagpur is my home.
Should Indian politicians have a retirement age?
Don’t worry, people will decide. They can retire someone at 40, and vote in someone in at 90.
Was Sharad Pawar’s resignation and re-appointment a masterstroke or a master stunt?
I am not in touch with Maharashtra politics.
Elon Musk of Tesla or Elon Musk of Twitter. Who can Indian government arm twist more?
Elon Musk and Tesla are welcome in India but if they want to manufacture in China and market in India, it is not possible. We are open to concessions and subsidies if they manufacture here.
Between Savarkar and Gandhi, who would you choose for a drive from Delhi to Mumbai?
Neither of them is here now. I would prefer Viveck Goenka.
Who has troubled you the most? Corrupt contractors, Indian auto companies, state environment ministers or global development funds?
No one has troubled me. If they trouble me I know how to set them right. I have no fight with anyone.