The total debt of the National Highways Authority of India (NHAI) in the financial year 2014-15, when the BJP government took charge, stood at Rs 24,188 crore. Over the following years, NHAI’s debt stock increased gradually – Rs 44,567 crore in FY16, Rs 77,742 crore in FY17, Rs 1 21,931 crore in in FY18, Rs 1,78,867 crore in FY19. The debt of the authority till Feb 2020 stood at Rs 2,28,252 crore.
To service spiraling debt, NHAI is “taking steps for asset monetization through Infrastructure Investment Trust (InvIT) and Toll-Operate-Transfer (TOT),” Gadkari said in a written response to a question from Lok. Sabha.
NHAI incorporates a special purpose vehicle (SPV) into which certain sections will be transferred. Subsequently, the SPV will transfer these assets to the InvIT which will be formed by NHAI, Gadkari said.
NHAI’s growing debt has recently become a concern for market watchers. In August 2019, a letter from the Prime Minister’s Office to Road Transport Secretary Sanjeev Ranjan criticized the “unplanned and excessive” expansion of the NHAI.
“Road infrastructure has become financially unsustainable; private investors and construction companies are pulling out of greenfield projects,” the letter points out. The PMO further suggested that NHAI should focus on asset monetization.
Gadkari later clarified the letter saying it was just a bunch of “suggestions”; and that NHAI does not lack funds, repeated the union minister on several occasions.
In an exclusive interview with ET on January 13, NHAI Chairman Sukhbir Singh Sandhu said NHAI was comfortable with paying down its debt and that the government’s flagship highway construction program, Bharatmala, needed funds to complete.
“When we discover such large projects, the debt can only increase. We are very comfortable with our repayment. We should be worried when there is doubt about repayment capacity,” Sandhu had said.
The first phase of the Bharatmala program approved in 2017 includes the construction of 24,800 km of national highways, in addition to 10,000 km of balance road works under the national highway development program.
The initial estimated cost for Bharatmala-I was Rs. 5.35 lakh crore but has now risen to around Rs 10 lakh crore due to land acquisition issues.
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