NHAI seeks Rs 25,000-cr additional budgetary support for highway projects

The National Highways Authority of India (NHAI) has sought Rs 25,000 crore more from the Centre for the next financial year (2020-21), mainly to fund its ambitious highway projects.

It is learnt that the authority has sought Rs 25,000 crore more than what it received in 2019-20. The NHAI has the approval to raise Rs 75,000 crore in borrowings during the current year, while the government support is Rs 36,691 crore. 

The highways authority has made its presentation to the Ministry of Road Transport and Highways, which, in turn, would send its demand to the Ministry of Finance.

According to an official in the know, the road ministry may seek even higher budgetary support than being proposed by the NHAI. The proposal is yet to go to the Finance Ministry.

The NHAI has lined up a portfolio of projects worth Rs 18,000 crore to be bid out in the next few months, which includes five hybrid-annuity packages on the Vadodara-Mumbai expressway, four EPC (engineering-procurement-construction) packages on the Delhi-Vadodara expressway, and projects in Uttar Pradesh and Bihar.

With budgetary support unable to match the lack of private investment, the NHAI has been under analyst scanner for being highly leveraged with its debt expected to touch Rs 2.5 trillion by the end of current financial year.

In FY19, a mix of debt raised from banks, toll revenue, and a road monetisation scheme, was to yield Rs 62,000 crore to the NHAI. 

This financial year, allocation has been made to the NHAI for major works under the Bharatmala Pariyojana, entrusted to the organisation for execution. 

The money will come from the Central Road Infrastructure Fund (CIRF), the Permanent Bridges Fee Fund, and Monetisation of National Highways Fund.

The Bharatmala programme envisages construction of 20,000 km of roads at an estimated investment of Rs 7 trillion. In the first phase to be undertaken over three-five years, the project would cost Rs 5.5 trillion. It would be funded through various sources, including Rs 2.09 trillion from the market, Rs 1.06 trillion through private investment, and Rs 2.19 trillion from the central road fund or toll collection.

The expenditure on maintaining national highways is financed from the CRIF. The works are executed on agency basis by the public works department of the states, Border Roads Organisation, National Highways & Infrastructure Development Corporation, and NHAI.

While the overall allocation for NHAI has seen a rise in the past couple of years, the authority's IEBR (Internal and Extra Budgetary Resources) has increased. IEBR is essentially the money raised by the department itself in the form of profit, debt, and equity. In FY18, the NHAI's IEBR was Rs 50,532.41 crore. It went up to Rs 62,000 crore in FY19 and further to Rs 75,000 crore in FY20.