NEW DELHI: The road transport and highways ministry will raise around Rs 1 lakh crore through offbudgetary mechanism in the next financial year to fund its ambitious highway construction programme.
The amount would be raised through the National Highways Authority of India (NHAI) bonds, institutional financing from Life Insurance Corporation of India (LIC), Employee Provident Fund Organisation (EPFO) and other market borrowings.
The ministry would also raise money through the highway monetisation programme under the Toll-Operate-Transfer scheme and also through the upcoming Infrastructure investment funds (InvITs) of NHAI.
“We’ll be raising nearly 1 lakh crore from the market in the next financial year. Around 70% of it would come from bonds and other borrowings and the remaining will be from the highway monetisation programme,” Deepak Kumar, chairman of NHAI, told ET.
The amount is almost double the amount that NHAI has raised in the current financial year. In the current financial, the Authority has already raised Rs 47,000 crore.
The proposal for NHAI InvITs is likely to be taken up for approval by highway authority’s board on March 15. The announcement of NHAI InvITs was made in the recent budget speech of the finance minister.
“We’ll be seeking in-principle approval of the board soon only after that we’ll be able to come up with the concrete plan,” Kumar said.
For the next financial year, the ministry is aiming to construct around 12,000 km and awarding a record 25,000 km. For the next financial year, the ministry has received a budgetary allocation of Rs 71,000 crore, up from Rs 61,000 crore for FY18. In the current fiscal, the ministry will be constructing a little less than 10,000 km, the highest ever to be constructed.
As a part of the ambitious Bharatmala highway construction programme, 34,800 km of highways will be constructed by 2022 at an expected cost of about Rs 5.35 lakh crore. The government will fund the project through market borrowings, central road funds, monetising government-owned road assets and budgetary allocation.
As per government estimates, Rs 2.09 lakh is likely to come from market borrowing, Rs 1.06 lakh crore through private investment and Rs 2.19 lakh crore from the central road fund and toll operate transfer model.