The ministry of road transport and highways has sought a borrowing limit of close to R60,000 crore for the National Highways Authority of India (NHAI) for 2017-18, roughly the same as the ceiling for the current year.
The borrowing limit is sought to be maintained despite NHAI having raised just R12,500 crore in the current fiscal — R2,500 crore through tax-free capital bonds and R10,000 crore through taxable bond from Employees Provident Fund Organisation (EPFO).
Last fiscal, it raised R19,000 crore taxable bond and R5,000 crore through tax-free bonds.
Incidentally, NHAI’s project awards have also been slower during the April-October period of the current fiscal. Compared with the 2,615-km project awards in the April-October period of the last fiscal, it has awarded 2,330 km in the first seven months of the current year.
NHAI had awarded 4,344-km highway projects in 2015-16 and 3,067-km in 2014-15.
Asserting that there was no paucity of funds for awarding projects, an official said delays in land acquisition have been coming in the way. NHAI awards projects only after acquiring 90% of the required land.
NHAI acquired 9,000 hectares of land in 2015-16 against 6,750 hectares in the previous year. For the current fiscal, it is targeting to acquire 10,000 hectares.
The cost of land acquisition stands at an average of R2.13 crore per hectare compared to R1.35 crore per hectare in the last fiscal. Land acquisition now accounts for 40-45% of the total project cost.
“Funds could be raised as and when required,” the official said, adding that the authority has sufficient funds to carry out project awards.
In 2014-15 and 2015-16, NHAI had constructed 1,501 km and 1,987 km, respectively. The road transport and highways ministry has asked NHAI to award 15,000 km and construct 8,000 km highways in the current fiscal.
Borrowings apart, NHAI’s major source of funds is the highway cess, the proceeds from which would go up from R9,566 crore in 2014-15 to R25,356 crore in 2017-18. It also hopes to plough back tolls collected from projects to the tune of R8,596 crore in 2017-18 for building new highways.
Firmly poised to achieve its ambitious targets on road construction, the ministry of road transport and highways will ask for budgetary allocation of R91,000 crore for 2017-18, up 57% from the current year’s outlay, which the ministry is set to overshoot by about R4,500 crore.
Road transport and highways minister Nitin Gadkari has set ambitious targets of awarding highway projects of 25,000 km and building 15,000-km long roads during 2016-17.