Chairman M R Kumar recently met Union Roads and Highways Minister Nitin Gadkari with the proposal.
“The borrowing will be in the form of bonds to be issued by the NHAI,” said a person in the know.
This debt raising is part of the NHAI’s plans to raise Rs 75,000 crore in 2019-20 and will be utilised mainly for National Highway projects under the Bharatmala scheme.
The Union finance ministry has approved a 21 per cent hike in fund raising for the NHAI
in the current fiscal year as the government prepares a blueprint for executing Bharatmala projects.
Besides fund raising, the government sanctioned providing Rs 36,691 crore to the NHAI.
In 2018-19, Rs 62,000 crore, a mix of debt raised from banks, toll revenue, and a road monetisation scheme, was raised.
The overall allocation for the NHAI
has risen in the past couple of years, and the authority’s IEBR (Internal and Extra Budgetary Resources) has increased.
In FY18, the NHAI’s IEBR was Rs 50,532.41 crore. It went up to Rs 62,000 crore in FY19 and further up to Rs 75,000 crore in FY20.
Last year, the NHAI signed a credit line of Rs 25,000 crore with the State Bank of India for 10 years with three years of moratorium on repayments. The loan sanctioned by SBI 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 installments. The total loan tenure is 10 years.
In January 2017, the NHAI had raised Rs 8,500 crore from LIC
for 30 years at an interest rate of 7.22 per cent. The funds were raised for construction of bypasses on national highways and road expansion projects.
The massive expenditure is earmarked mainly for the government’s ambitious Bharatmala programme, which envisages constructing roads of 20,000 km at an estimated Rs 7 trillion.
With Bharatmala, the largest highway project after the National Highway Development Programme (NHDP), the funding requirement of the Union government has increased. In the first phase to be undertaken over three-five years, the project would cost Rs 5.5 trillion. The project 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.
Bharatmala was first mooted in April 2015 with a plan to connect Gujarat and Rajasthan, then move to Punjab and cover Jammu & Kashmir, Himachal Pradesh, Uttarakhand followed by Uttar Pradesh and Bihar and further to Sikkim, Assam, Arunachal Pradesh, and right up to the Indo-Myanmar border in Manipur and Mizoram.
The aim is to improve the speed of traffic flow on key corridors by providing uniform four-lane roads between two identified points.
After completion of the first phase of the ongoing Bharatmala programme, the focus would shift towards developing the state road network.