signed a credit line of Rs 25,000 crore with SBI for 10 years with a three-year moratorium on repayments. This loan is unsecured. There is no principal repayment liability for the initial three years. After three years, the repayment would be done in 14 equal half-yearly instalments. Life Insurance Corporation of India (LIC) has also offered a credit line of Rs 25,000 crore to the
for funding highway projects.
The funds are expected to be raised over 30 years and the interest rate will be reset every 10 years. The government wants longer tenure loans for infrastructure projects. The NHAI borrowed Rs 20,000 crore from the government’s National Small Savings Fund (NSSF) last year. It is now looking to double the amount in 2019-20 (FY20). The NSSF loan is part of the NHAI’s overall borrowing plan of Rs 75,000 crore for FY20. Besides fund raising, the government sanctioned Rs 36,691 crore for THE NHAI.
In 2018-19, the NHAI resorted to a mix of bank debt, toll revenue, and a road-monetisation scheme to raise Rs 62,000 crore. Though the government allocation for the NHAI has risen in the past couple of years, the authority had to increase internal and extra budgetary resource generation.
Financial stress of the NHAI has become a concern, with the Prime Minister’s Office (PMO) recently stepping in with its suggestions. The PMO asked the Ministry of Road Transport and Highways (parent ministry of the NHAI) to improve its operational performance.
The PMO also suggested that the NHAI monetise its road asset base through the toll-operate-transfer (TOT) auctions or through an infrastructure investment trust (InViT). It asked the NHAI to bid out new projects under the build-operate-transfer (BOT) model where the government’s capital commitment is minimal.