Red signal for NHAI

Its debt-fuelled expansion is a reason for worry

The Prime Minister’s Office (PMO) has reportedly expressed concern regarding the ballooning of debt and unplanned and excessive expansion of the National Highways Authority of India (NHAI). Given past political risks in the roads sector and a debt overhang that affects many private contractors, equity from the private sector has been hard to come by. Thus, the NHAI has had to turn to paying directly for highway-building using the “engineering, procurement and construction”, or the EPC model. This has led to a debt build-up that is large — indeed, of proportions that it can affect the overall systemic stability. Debt