NHAI in need of Rs20,000-cr to meet PPP road target

The National Highways Authority of India (NHAI) will require upto Rs20,000-crore per year for the next 15 years to implement the PPP-road project worth Rs9-lakh crore till 2031-32.

According to sources, international private equity firms were channeling foreign investment into the 30 per cent equity component of the project cost. It is expected that foreign infrastructure companies, who were presently coming as junior partners in the projects, would adopt the role of senior partners in projects over Rs5,000-crore, before taking up road projects independently.

The target of building 20 km road every day has placed a huge financial strain on the government as the award process for construction for 36,000-km of roads was to be completed in the next three years. 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, government was depending on a number of other sources like market borrowings, FDI and additional toll revenue to finance the 7-phase NHDP programme.