Awards of new projects in the year was also at a three-year high. The authority is yet to fix the targets for the current fiscal, but these are expected to be ambitious too.
Despite the pandemic and resultant periods of lock-down, the National Highways Authority of India (NHAI) ended FY21 with all-time high highway construction and capital expenditure. Awards of new projects in the year was also at a three-year high. The authority is yet to fix the targets for the current fiscal, but these are expected to be ambitious too. NHAI chairman Sukhbir Singh Sandhu discusses the road map for the current year and ahead with Surya Sarathi Ray. Excerpts:
How has the financial year 2020-21 been for NHAI in terms of award of new highway projects, construction and capital outlay?
NHAI has awarded 141 projects with combined length of 4,788 km in 2020-21, the highest in the last three years, compared with 3,211 km in 2019-20 and 2,222 km in 2018-19. Of the total projects awarded, two were under build-operate-transfer (Toll) model for a highway length of 132 km, 69 projects (2,609 km) were through the hybrid annuity model (HAM) and the balance 70 projects (2,047 km) were through the engineering, procurement and construction (EPC) model.
The capital cost of the projects awarded in 2020-21 amounted to Rs 1,71,226 crore, the highest ever, compared with Rs 81,324 crore in 2019-20 and Rs 64,009 crore in 2018-19.
Despite the fact that construction came to a halt in April due to the lock-down, NHAI set a new record by building 4,192 km of national highways in 2020-21. This was about 5% higher than the construction in 2019-20 and 24% more than the level achieved in 2018-19.
If counted by lane kilometre, NHAI has constructed 18,500 lane km (50 lane km/day) during 2020-21, 40% more than in 2019-20 and 91% more in 2018-19.
Capital expenditure by NHAI for development of highway infrastructure reached an all-time high of `1,28,000 crore during 2020-21, 23% higher compared to such spending in 2019-20.
What are the steps taken to ensure the quality of construction?
NHAI is committed to adhere to the highest quality standards during construction of projects. Recently, we have introduced independent inspection of the ongoing national highways projects, by involving reputed retired government officials. As many as 111 of such projects have been identified so far. These inspections will be held in addition to the regular inspection of the projects by NHAI officials. The quality inspections will not only ensure adherence to standards but will also verify compliance to specific contractual requirements and good engineering practices with reference to procedures formulated as per approved quality assurance plan.
Electronic toll collection through FASTag has been made mandatory from February 15. Has this helped to boost toll revenue?
The FASTag drive has been very well supported by the highway users as it has achieved over 95% penetration with more than three crore users in the country. Many of the toll plazas have even reached about 99% penetration. Toll collection through FASTag has seen a consistent growth, crossing Rs 100 crore per day mark.
FASTag implementation has also reduced the wait time at NH fee plazas significantly, resulting in enhanced user experience. A recent example of this is Kherki Daula toll plaza near Gurugram, where the wait time has been reduced from 20-30 minutes to less than 5 minutes. FASTag will also help save Rs 20,000 crore per year on fuel and thereby foreign exchange, besides helping the environment.
The special purpose vehicle for Delhi-Mumbai Expressway has recently raised close to `10,000 crore. Tell us about the financing plan for the mega project?
The SPV has raised `9,731 crore during the first financial year of its existence. The major share of the funding came from State Bank of India, which contributed Rs 5,000 crore. Punjab National Bank, Bank of Maharashtra and Axis Bank are the other investors in the SPV.
The SPV will soon tie up with other institutions for the balance debt requirement of Rs 38,733 crore. The expressway is scheduled for completion by March 2023, with one of the stretches to JNPT getting completed by September 2023.
Asset monetisaton is seen as a way to curb NHAI’s rising dent budren. What has been the progress on this front?
NHAI has generated over Rs 17,000 crore through the toll-operate-transfer (TOT) model so far and has developed a pipeline of projects worth Rs 75,000 crore to be awarded on TOT mode. In the recent fifth bundle of TOT auctions, NHAI has got bids amounting to Rs 600 crore higher than the reserve price.
NHAI has also added infrastructure investment trusts (InvITs) towards the range of offerings. An investment manager company of NHAI InvIT ‘National Highways Infra Investment Managers Private limited’ (NHIIMPL) has been formed. To manage the InvIT in a highly professional way, best talents have been engaged. We plan to raise Rs 5,100 crore by monetising five operational toll roads through InvIT, which is likely to hit the market in a month or so.
How is the progress on the conciliation front?
For faster settlement of claims through conciliation and reduce liabilities, NHAI has rigourously started the process of conciliation by constituting three Conciliation Committees of Independent Experts (CCIE) of three members each. We are asking all contractors and concessionaires to come for conciliation for faster settlement of the claims.
NHAI started this initiative in 2017-18 and since then 154 cases have been referred to CCIE. Till date, 95 cases of claims by contractors worth Rs 30,377 crore have been successfully settled for an amount of Rs 8,991 crore. Out of this, in the last fiscal alone, 60 cases for Rs 5,312 crore against claimed amount of Rs 14,206 crore have been settled.