Asset monetisation: NHAI sets 1,750-km target for 2022-23, may raise Rs 20,000 crore

Asset monetisation is central to NHAI’s plan to mitigate its debt burden, which stood at a worrisome Rs 3.5 trillion at the end of last financial year. Monestisation of operational assets will be through the toll-operate-transfer (TOT), infrastructure investment trusts (InvIT) and toll securitisation modes.

NHAI PIC
The NHAI will not borrow from the market in 2022-23.

The National Highways Authority of India (NHAI) has decided to monetise highway stretches with combined length of 1,750 km in 2022-23, a move which help it raise around Rs 20,000 crore. It has prepared an “indicative” list of road assets to be monetised in the current fiscal which includes 14 stretches with length between 6.49 km and 280 km in different parts of the country.

Asset monetisation is central to NHAI’s plan to mitigate its debt burden, which stood at a worrisome Rs 3.5 trillion at the end of last financial year. Monestisation of operational assets will be through the toll-operate-transfer (TOT), infrastructure investment trusts (InvIT) and toll securitisation modes. Recently, the NHAI cancelled the bidding processes for two TOT bundles — sixth and eighth — as the highest bids did not match up to its expectations.

The NHAI will not borrow from the market in 2022-23. The budgetary outlay for the agency this year is estimated at Rs 1.34 trillion, much higher than the level in recent years. Crisil’s Jagannarayan Padmanabhan said the authority to sail through the revised target for the current fiscal comfortably given the current level of investors’ appetite.

Replying to a question in Lok Sabha on December 2, 2021, minister for road transport and highways Nitin Gadkari had said the authority has identified a total of 21,700 km highway length for monetisation in three years starting from FY23. In FY23, 5,500 km was to be monetised, 7,300 km in FY24 and 8,900 km in FY25. However, in the Budget for FY23, the monetisation target was set at Rs 20,000 crore, indicating that just around 1,800 km stretches would be on offer.

The rise in NHAI’s debt level is mainly because of the steady rise in highway construction. From 1,901 km in 2013-14, construction increased to 4,325 km in 2021-22. Debt servicing is already is a huge burden for NHAI.

As reported by FE earlier, a little less than Re one out of every Rs five expenditure by the NHAI in 2022-23 will go towards debt servicing. According to the estimates of the ministry of road transport and highways (MoRTH) presented to a parliamentary standing committee, NHAI has to spend Rs 31,049 crore on servicing debt in 2022-23. The amount will go up to Rs 31,735 crore in 2023-24. In 2021-22, NHAI spent Rs 40,337 crore on debt servicing.

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