National Highways Authority of India (NHAI) plans to roll out the Electronic Toll Collection (ETC) system pan-India from next year replacing the current cash tax payment method, a top official said here ahead of launch of its first-ever tax-free bonds issue of Rs 10,000 crore.
"ETC shall replace the current cash tax payment system on the toll booths, where people have to pay after every 60-70 km stretch," NHAI member Finance J N Singh told reporters here.
"It is expected to be rolled out next year. Like in any other developed country, RDIF technology-based ETC in India shall create a credit card for making payments," Singh said, adding preliminary preparations for the launch have been completed.
He was here to launch NHAI's first-ever tax-free bonds public issue which is opening from tomorrow till January 11, 2012. The issue under tranche-I aggregates to Rs 5,000 crore with an option to retain over-subscription up to Rs 10,000 crore.
NHAI, which has mandate from GoI to raise Rs 10,000 crore through tax-free bonds, is likely to come out with a second such issue if the tranche-I issue is not fully subscribed.
"The interest income on these tax free bonds shall be fully exempted from tax," banker to the issue SBI Capital said.
The bonds having a face value of Rs 1,000, will have two maturity periods of 10 years and 15 years and would be listed on the BSE and the NSE. The 10-year bonds will fetch 8.2 percent interest per annum, while the 15-year bonds offer 8.3 percent interest.
NHAI is one of the four entities that are scheduled to issue tax-free bonds this fiscal, which aim to create market for debt instruments in the country. The other three entities expected to come out with similar bonds for raising funds are Indian Railway Finance Corp (IRFC), Housing and Urban Development Corporation (HUDCO) and Power Finance Corp (PFC).
The NHAI's total debt (including secured loans) stands at around Rs 6,636.21 crore. With this issue, it is expected to cross the mark of Rs 16,000 crore, a top NHAI official said. According to the NHAI prospectus, the bonds issue will worsen its debt-to-capital ratio from 0.11 to 0.29 if it raises Rs 10,000 crore from the markets. The ratio reflects the financing strengths of a firm.
NHAI has set an ambitious target of constructing 20 km of roads per day over the next three years with emphasis on improving the connectivity of Phase-IV in the coming years.
"Phase-IV basically is the single lane national highways of around 20,000 km which shall be converted to double lane. The emphasis in coming years will be on improving connectivity of this," Singh added.
