The National Highways Authority of India (NHAI) is considering use of multiple instruments to raise funds. These include capital gains tax exemption bonds, external commercial borrowing, infrastructure bonds, term loans, and loans from multilateral agencies, banks and financial institutions.
The planned construction of another 37,000 km roads over the next three to four years entails a total investment of Rs 8,12,661 crore, of which market borrowings will be Rs 1,19,948 crore. NHAI Chairman Brijeshwar Singh said the estimated size of borrowing would be Rs 10,000-20,000 crore annually for the next 15 years.
Nihar Ranjan Dash, chief general manager, told Business Standard on the sidelines of an investors’ meet: “The government has already given in-principle clearance to the investment plan. However, NHAI will have to seek its approval on a case to case basis. Besides, the B K Chaturvedi Committee, whose recommendations have been accepted by the government, has also approved NHAI’s plan. NHAI proposes to award projects of 37,000 km in the next three-four years. These will be completed in five-six years.”
Dash said NHAI expected to be debt-free by 2030-31 and added the authority, which raised about Rs 1,400 crore in 2009-10 through capital gains tax exemption bonds, planned to mobilise Rs 4,000 crore in the current financial year. Of this, Rs 130 crore was raised in April.
Dash said out of Rs 8,12,661 crore, Rs 3,38,000 crore would be required for construction, Rs 2,07,579 crore for annuity payments, Rs 78,285 crore for interest and Rs 1,90,000 crore for repayment of borrowings.
He said NHAI would mobilise Rs 3,60,632 crore from the cess fund and expected Rs 9,782 crore external assistance, Rs 1,17,418 crore net surplus from toll revenue, Rs 39,329 crore additional budgetary allocation, Rs 2,11,315 crore through private sector participation and Rs 1,19,948 crore market borrowings.
Dash said so far, 13,700 km roads had been four-laned and about 6,900 km were under various stages of implementation.
Singh said NHAI’s dependence on allocation from the common budgetary resources pool had fallen following the government’s decision to levy cess on high-speed diesel and petrol at Rs 2 per litre. The total collection of $3.8 billion in a year is dedicated to a non-lapsable Central Road Fund, out of which sums are appropriated for various purposes such as national highways, rural roads, provincial roads and rail overbridges.