Centre likely to rework NHAI financing plans amid Covid-19 crisis

The Centre has already granted approval to private firms to come out with their Infrastructure Investment Trusts (InvITs).
Amid the coronavirus (Covid-19) outbreak, fundraising plans for the National Highways Authority of India (NHAI) may be reworked. The Centre has already formed a panel to rejig financing for the NHAI and may invite some unconventional ideas to optimise future investments by the authority.

“We have brought together experts from various sectors to act as advisors for our future endeavours. We are also hopeful of receiving funds to the tune of Rs 50,000 crore from the NIIF (National Investment and Infrastructure Fund) for the Delhi-Mumbai expressway,” said an official.

A committee, under the chairmanship of Nilesh Sathe, former member of the Insurance Regulatory and Development Authority of India (IRDAI), has been set up. It will deliberate on fundraising for the authority.

The Centre feels an investor wants to make a safe investment in these times and he is finding it risky to invest in industry and trade.

With investor confidence in place, the government is hopeful in bringing low-cost capital to the sector. This will come once the requisite approvals from the finance ministry and the Reserve Bank of India (RBI) are in place. Investors also want to shift reserves from the real estate sector, which are currently shrouded under the shadow of uncertainty.

The Centre has already granted approval to private firms to come out with their Infrastructure Investment Trusts (InvITs). There are three-four companies which have already started tapping that source. 

Like InvIT, which is one of the models for investment in the sector, there are many more models that also have the potential. They are toll-operate-transfer (TOT), build-operate-transfer (BOT), engineering-procurement-construction (EPC) and hybrid-annuity (HAM). 

“Our effort is to bring foreign direct investment (FDI) through these routes also. Depending on the economic viability, we will tap these models from time to time,”said the official.  

InvIT is like a mutual fund, which enables direct investment from an individual or an institutional investor in infrastructure projects to earn a portion of the income as returns.

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