New Delhi, April 9 (IANS) Major investment in the northeast is the best answer to the problem of insurgency in that region, according to Minister for Development of Northeastern Region Mani Shankar Aiyar.

Addressing a press conference here Monday on the eve of the two-day Third Northeast Business Summit here, Aiyar said, "Any significant investment will reduce security problems in the northeast. Major investment is the best answer to the problems of insurgency in that region."

Inviting the private sector to invest, he said that a very substantial part of the region is free of security problems.

The business summit, to be held here April 10-11 and being organised by the Ministry of Development of Northeastern Region (DoNER) and the Kolkata-based trade body Indian Chamber of Commerce (ICC), will showcase the strengths of the northeastern region and present significant business opportunities.

Two such business summits were earlier held in Mumbai in July 2002 and New Delhi in January 2004.

The third is being organised with the prime objective of exposing the rich potential of the region to prospective investors in India and abroad.

Several union ministers, chief ministers of northeastern states and other stakeholders are expected to participate. The summit will be inaugurated by Vice-President Bhairon Singh Shekhawat.

Elaborating on the investment opportunities in the northeast, Aiyar said the infrastructure sector has the best potential.

"The infrastructure sector holds the highest capacity for corporate participation. Road construction is a major area. In the next five years, around Rs. 50,000 crores will be invested for road construction in the northeast," he said.

Aiyar added, "Thai companies successfully constructed roads in that country in terrain similar to the northeast. Those companies have now become major global companies. In the same way, Indian companies and even small companies in the northeast can grow by investing in road construction in the northeast."

The minister said that air connectivity with the northeast had improved significantly with as many as 226 flights operating in a week.

"However, intra-northeast air travel remains a problem. We are awaiting a report from a committee that went through this problem and action will be taken on the basis of that report."

As for rail connectivity, Aiyar said that the railway ministry was paying special attention to the region.

About other sectors, he said the power sector in the region holds a lot of potential for investment.

"In the last Five-Year Plan, there was practically no addition to the hydropower capacity in the northeast. However, we are working on more than doubling the hydropower capacity in the northeast in the next few years.

"Power generation companies should invest in the northeast rather than any other region of the country," Aiyar said, expressing confidence that the region will become power surplus in the coming years.

The minister also projected the agriculture sector as having potential for investment.

"Investment possibilities in the agriculture sector in the northeast are perhaps unparalleled compared to the rest of India," he said.

Aiyar especially mentioned horticulture and floriculture as areas having tremendous potential for growth.

In the services sector, he referred to tourism and hospitality and information technology as prime investment areas.

"In IT, especially the BPO (business process outsourcing) sector, investors should make use of the huge pool of English-speaking university graduates in the northeast," Aiyar said.

To a question as to why a business summit on the northeast is being held in New Delhi, he said the next summit would definitely be held in the region itself.

"I deeply regret having to hold this summit here in Delhi. We thought of holding it in Guwahati (in Assam) but had to give up the idea because of problems like shortage of hotels there.

"Hopefully these problems will be sorted out soon and we will be able to hold the next summit in the northeast," Aiyar said.