National Highways Authority of India Current Affairs - 2020

Union Cabinet authorises NHAI to set up Infrastructure Investment Trust

Union Cabinet approved the proposal of Union Ministry of Road Transport and Highways (MoRTH), which authorizes National Highways Authority of India(NHAI) to set up Infrastructure Investment Trust(s) (InvIT) as per InvIT Guidelines issued by Securities and Exchange Board of India (SEBI). This will enable NHAI to monetize completed National Highways that have a toll collection track record of atleast 1 year and the NHAI reserves the right to levy toll on identified highway.

Implementation

NHAI’s InvIT will be established as a Trust, named as ‘InvIT Trust’. InvIT Trust will be under Indian Trust Act, 1882 and Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014. It will be formed with an objective of investment primarily in infrastructure projects (as defined by Union Ministry of Finance) and may hold assets either directly or through an Special Purpose Vehicles (SPV) or a holding.

Significance

Infrastructure Investment Trust(s) (InvIT) as an instrument provides greater flexibility to investors and is expected to create following opportunities-

  • It would generate specialized Operation and Maintenance (O&M) Concessionaires.
  • It would attract patient capital (for about 20-30 years) to Indian highway market, as these investors are unwilling towards construction risk and are interested in investment in assets which provide long-term stable returns.
  • Retail domestic savings and corpus of special institutions such as mutual funds, Pension Fund Regulatory and Development Authority (PFRDA), among others, will be invested in infrastructure sector through InvIT.

Background:

Roads and highways are the lifeline of the economy, therefore, development of National Highways has a multiplier effect in terms of facilitating trade and enhancing overall economic development of a region. In October 2017, Union Government launched its flagship highway development programme called Bharatmala Pariyojana, for development of 24,800 km of roads for a total investment of Rs. 5,35,000 crore.

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India South Korea sign 7 Agreements to step-up cooperation

During the visit of Prime Minister Narendra Modi to South Korea seven agreements were signed to boost up the cooperation. The agreements signed include:

  • MoU was signed between the Korean National Police Agency and the Ministry of Home Affairs to enhance cooperation between the law enforcement agencies of the two countries and combat trans-border and international crimes.
  • A joint agreement was signed for releasing a joint stamp, commemorating Princess Suriratna (Queen Hur Hwang-ok), a legendary Princess of Ayodhya, who went to Korea in AD 48 and married King Kim-Suro.
  • An agreement was signed to continue operations of Korea Plus organisation that facilitates investments by Korean companies in India. Korea Plus operationalised in June 2016 comprises representatives from the Ministry of Industry, Trade and Energy of South Korea, Korea Trade-Investment and Promotion Agency (KOTRA) and Invest India.
  • An agreement to promote collaboration among start-ups and set up a Korea Start-up Centre (KSC) in India to commercialise ideas, technologies and designs of start-up companies.
  • An agreement between the Korean Broadcasting System (KBS) and Prasar Bharti to facilitate the broadcast of DD India Channel in South Korea and KBS World Channel in India.
  • An agreement on fisheries and aquaculture for strengthening cooperation by encouraging exchanges, organising training workshops and development and utilisation of marine science and technology in the fields of fisheries and aquaculture.
  • An agreement between the National Highways Authority of India and Korea Expressway Corporation to promote bilateral cooperation in road and transport infrastructure development projects of India, and facilitate technical and institutional knowledge exchange in the field of road and transport.

This was the second visit of Prime Minister Modi to the Republic of Korea since 2015 and it was a second summit meeting with the South Korean president.

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