With the road construction work gaining speed and funds already deployed for contracts awarded under the cash contract or EPC mode, the National Highways Authority of India (NHAI) may soon hit the bond market.
Union road transport, highways and shipping minister Nitin Gadkari said, “We plan to raise Rs 60,000 crore through infra bonds. The ministry is exploring opportunities so that NHAI can earn Rs 10,000 crore a year from sources like optical fibre network and 1 lakh km of 1,200-KV transmission lines under national highways. We are also exploring opportunities to carry iron ore from Karnataka as well as a gas pipeline along national highways.”
The highways authority till early this year was unable to deploy nearly 80% of the Rs 10,000 crore it had raised on tax-free bonds in FY12. NHAI had parked the funds in banks and the finance ministry had been pushing the authority to make use of the funds at the earliest.
Union road transport, highways and shipping minister Nitin Gadkari said that with NHAI firming up plans to award 5,000-km national highway construction by FY15, Rs 40,000-crore orders awarded under the EPC route and the ministry setting a target to construct 30 km a day, the highway authority would have to hit the bond market soon to raise funds.
“All projects will have to be awarded in the EPC mode because contractors don’t have the capability to take projects under the PPP (private-public partnership) model,” Gadkari said, adding that a model EPC document has been framed in a manner that time overrun and cost overrun in implementation of national highways would be minimised.
The EPC approach is based on assigning responsibility for investigation, design and construction to the contractor for a lump-sum price under a fixed timeframe determined through competitive bidding.
GAIL has, in fact, been facing a lot of implementation hurdles in adding 15,918 km of pipeline by 2017 above the existing 12,144 km gas pipeline across the country. The Petroleum and Natural Gas Regulatory Board, which monitors natural gas transmission and distribution, has projected doubling of natural gas transportation from 205 million standard cubic metres per day (mscmd) to 415 mscmd by 2017. Using the space along the highways for gas pipelines could benefit GAIL, said Gadkari, adding that he had already met GAIL officials on this issue.
However, the income generated from pipelines and transmission would help in subsiding toll tax. So far, 110 toll booths across the country have been converted to e- tolls and the number will be increased to 350 in due course, Gadkari said. Citing example of the Mumbai-Delhi highway, he said there were 18 toll booths between the highway and a truck lost at least three hours in paying tolls at the booths.
According to estimates, the delay translates to Rs 60,000-crore of fuel wastage and generates dead assets worth Rs 28,000 crore a year. “The government would be able reduce Rs 88,000 crore of national wastage a year by introducing e-tolls,” Gadkari said.