NEW DELHI: The road transport and highways ministry has stepped up its fundraising efforts to meet its enhanced construction targets.
The National Highways Authority of India (NHAI), the nodal agency of the ministry, is expected to soon borrow at least Rs 25,000 crore as loan from public sector banks including the State Bank of India (SBI). Besides, the ministry is seeking to raise Rs 20,000 crore in the current financial year by leasing out highways, said officials.
They said that road transport and highways minister Nitin Gadkari would be holding roadshows in Toronto and New York in September to invite investments in Indian highways under the toll, operate and transfer (TOT) model.
“The ministry is working towards constructing at least 11,000 km in the current fiscal which would require funds to the tune of Rs 1.5 lakh crore,” said a senior government official, who did not wish to be identified. While Rs 70,000 crore would be made available through the finance ministry, the rest would be raised through borrowings, the official said.
The NHAI recently received Rs 25,000 crore as loan from SBI at 7.99% rate of interest for 10 years with a moratorium of three years for repayment of the principal. “Several other PSBs (public sector banks) have offered us loan at the same terms. We will go for another round of fundraising very soon,” the official said.
The official said that the ministry was hopeful of raising another Rs 20,000 crore by leasing out highways to private funds for 30 years for toll collection and maintenance in lieu of an upfront payment.
Bids for eight national highways, to be auctioned under TOT model, have already been invited. The government is hoping that several international private equity and pension funds bid for the projects. Gadkari will meet representatives of leading Canadian funds on September 6 to get them to bid for projects. On September 11, he will meet executives of US-based funds in New York.
The NHAI is hoping to get Rs 5,362 crore through leasing out eight road stretches totalling 586 km and spread across West Bengal, Bihar and Rajasthan, the official said.
Under the TOT model, the concessionaire pays a one-time concession fee upfront and gets the right to operate and toll the project stretch for the pre-determined 30-year concession period. The model also includes the risks associated with such a long concession contract.
In March, the government had concluded the auction to lease out nine national highways in Gujarat and Andhra Pradesh. Sydney-headquartered Macquarie Group had won the bid by paying Rs 9,681 crore, as against the government’s expectations of Rs 6,258 crore.