NHAI's equity capital, as per rating agency Icra, has gone up from around Rs 60,000 crore in 2013-14 to Rs 201,600 crore in FY19
The cumulative debt of the National Highway Authority of India (NHAI) has mounted to Rs 1.78 lakh crore in FY19 from around Rs 40,000 crore in FY14. The borrowing is expected to go up to `3.31 lakh crore by FY23, as its needs resources to fund construction of around 25,000 km highway projects in six years under the Bharatmala programme starting from 2017-18.
NHAI’s equity capital, as per rating agency Icra, has gone up from around Rs 60,000 crore in 2013-14 to Rs 201,600 crore in FY19 and is expected to further increase to Rs 541,345 crore in 2022-23. Consequently, the authority’s debt-equity ratio is likely to decline to 0.61 from 0.74 currently.
Apart from borrowings, the NHAI gets funds in the form of transfers from the Central Road and Infrastructure Fund (CRIF) and transfers of toll collection. For the current fiscal, as per the interim Budget, the NHAI is likely to get Rs 16,091 crore from the CRIF and another Rs 10,600 crore from toll plough back.
The authority is expected to receive Rs 10,000 crore from monetisation of national highways fund. The government has approved Rs 75,000-crore borrowing for the NHAI for the current fiscal in the interim Budget.
“While NHAI’s borrowing programme is on track, the budgetary allocation in the last two Budgets was lower than required, necessitating dependence in other funding avenues,” Icra said. It said the NHAI might exercise the Infrastructure Investment Funds (InvITs) route and monetise public-funded highway assets through the till, operate and transfer (TOT) mode.
Though the government approval came in the Budget for 2018-19 for raising funds through InvIT and ToT models, the NHAI has not exercise the InvIT option so far. It has raised around Rs 10,000 crore from the first bundle of ToT and has sought to raise a minimum of Rs 4,995 crore by offering on ToT a second bundle of highways of 566 km.
The government has allowed the authority to raise funds through the TOT model in August 2016. It has targeted to raise to the tune of Rs 34,000 crore under TOT concessions by 2021-22.
Meanwhile, NHAI’s expenditure has also gone up in recent times thanks to higher land acquisition costs and large project awards through the engineering procurement and construction (EPC) route, where the authority bears the entire cost of construction.
Around 35% of NHAI’s annual expenditure goes into construction of national highways, 30% into acquisition of land, 16% in extending grant for projects under hybrid annuity model (HAM), 15% in debt servicing and the remaining 4% into payment of annuity.
The authority has Rs 5,573 crore debt-servicing obligation in FY20, Rs 6,600 crore in FY21 and Rs 4,700 crore in FY23. It has to pay around Rs 15,000 crore interest annually for its outstanding debt.
The NHAI has constructed 1,436 km highways in 2013-14, 3,087 km in 2014-15, 1,988 km in 2015-16, 2,628 km in 2016-17 and 3,017 km in 2017-18.