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National Highways Authority of India (NHAI)’s top brass met with fund arrangers, merchant bankers, investors, rating agencies and stakeholders in Mumbai on Thursday, with an aim to highlight its funding requirement for the National Highways Development Project (NHDP). Speaking to media after the meeting, NHAI Chairman Mr. Brijeshwar Singh said that the objective of building 20 km road every day had placed a huge financial strain on the government. He said the road development target has been cramped into 5 years with awarding process for nearly 36,000 km to be completed in the next 3 years. Mr.Singh said currently, the central road cess and the 54 EC tax exemption bonds were the main source of funding for the government’s portion in the highways project. However, the government was depending on a number of other sources like market borrowings, FDI and additional toll revenue to finance the 7-phase NHDP programme. The NHAI chairman said that the funds were needed not only for the government but also for the private sector in the road development programme based on PPP model, which would involve a total investment of Rs. 9 lakh crore till 2031-32. He said NHAI would need Rs. 10,000 to Rs. 20,000 crore annually as borrowing from the domestic and international market for a period of next 15 years.

Responding to a question on achieving the target of building 20 kms road every day, Mr. Singh said that a target of over 12,000 km has been set for this financial year with another 12,000 km for the financial year 2011-12. Expressing confidence that the target was achievable, he said the work-in-progress would be 19,000 kms by March, 2011. The NHAI chairman said that this would become possible with speedier acquisition of land in the coming days. He said 120 land acquisition units have been created in the country and Chief Secretaries of the states have been taking monthly meetings on the land acquisition. Speaking about investments from abroad, Mr. Brijeshwar Singh said though no data was available, the international private equity firms were channeling foreign investment into the 30% equity component of the project cost. He however said that there was little foreign fund flow through the debt route. Mr. Singh also said that foreign infrastructure companies were coming as junior partners in the project and he expected that they would first enter as senior partners in large projects of more than Rs. 5,000 crore later taking an independent route.

Informing about the current stage of various components of NHDP, Mr.Singh said that the Golden Quadrilateral (GQ) is 98% complete with few stretches in Orissa remaining incomplete. In the North-South corridor, certain stretches including four laning of Jammu-Srinagar highway, Jammu-Pathankot, Madurai-Kanyakumari and parts of Sagar- Lucknow stretch were remaining. In the East-West corridor, the work was being done on the Maharashtra and Chattisgarh stretch of the corridor.

PIB Mb/AM
(Release ID :61793)