The National Highways Authority of India (NHAI) is looking to raise money through institutional and market borrowings in 2010-11 to generate resources for viability gap funding (VGF) and annuity (BOT/Build-Operate-Transfer) projects to develop highways.
A senior official at NHAI said: “We have made provisions to raise Rs 3,455 crore through institutional and market borrowings in the coming financial year. We intend to award 14,000 km of roads projects. Since it is difficult to assess upfront the resource requirement for these projects, we have included the provisions in our plan outlay to make available resources in 2010-11.”
This is the first time such provisions have been made by the authority. In 2010-11, of the plan outlay of Rs 17,006 crore, Rs 9,471 crore will come as equity. Tax-free infrastructure bonds will be issued to raise another Rs 4,000 crore. NHAI will rake in Rs 3,455 crore through market and institutional borrowings and Rs 80 crore through other loans.
Said the official: “In the current fiscal not many projects could be awarded because of issues with the concession agreement. Need for funds were less. With policy matters now sorted out, things have picked up and we need more money to keep going in the next year.”
The plan outlay of Rs 11,472 crore for the current financial year has been provided for largely from government equity of
Rs 7,400 crore and money raised from bonds/debentures. The roads authority could not utilise 13.6 per cent of the Rs 8,578 crore allocated in Budget 2009-10.
Also Read
Allocation to NHAI next year has been increased by 27.9 per cent over this year’s revised estimates to Rs 9,471 crore. The allocation for road transport ministry had been raised by over 13 per cent to Rs 19,894 crore from Rs 17,520 crore in this Budget.
In its work plan for 2010-11, NHAI intends to award 92 projects covering 11,721 km valued at Rs 1,00,000 crore, along with projects to construct another 2000 kms from the current financial year. The authority had a target to award 126 projects covering 11,928 km worth Rs 1,00,000 crore in 2009-10. Forty-three projects for 7000 km of highways could be awarded. A part of the deficit of 5000 km would be taken up in 2010-11.
NHAI will develop 65 per cent of the total number of projects to be awarded on BOT (toll) mode. In this, toll will be collected by the concessionaire over a specified period of time. Twenty per cent of the projects will be executed on annuity model, wherein the developer will finance and build the highways, the government will pay it money every six months and collect toll. NHAI will execute the remaining projects on EPC (engineering, procurement and construction) basis.