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National Highways Authority of India, to maintain and develop highways, initiated reforms such as Asset Recycling Plan. Under this reform government would lease existing highways to interested parties to collect tolls and to maintain highways according to the standards.
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NHAI Bonds to Boost Finances of Highways Sector The rise in the significance of infrastructure is heeding to the demands of the world. The magnitude in which its importance is cementing has never happened before. But, many countries are finding it difficult to finance their infrastructure projects, which require a huge investment. So, the governments across the world are looking for new options to fund the infrastructural projects and fill the gaps. The Government of India is much more special in this regard as it is trying to tap the untapped funds, which is first of its kind in India. The Ministry of Road Transport and Highways (MoRTH) is planning to raise funds up to 1 Lakh Crore from NHAI bonds, LIC and EPFO investments. The National Highways Authority of India (NHAI), which was created to develop and maintain the major chunk of national highways of India, is a statutory and autonomous body of Government of India. It works under the aegis of Ministry of Road Transport and Highways, India. Till date, under the guidance of NHAI, the highways sector in India has witnessed many note-worthy developments. Some of its landmark projects like National Highways Development Project (NHDP), Bharatmala Pariyojana are considered as massive projects for the scale of the development they were intended to. In the process of developing and maintaining national highways, the NHAI has faced many hurdles and bottlenecks. It dealt them with innovative and revolutionary measures/steps. At present, the NHAI is planning to develop the highway infrastructure at a faster pace. So, to finance such projects, the NHAI is leaving no stone unturned. It is exploring new financing options like Bonds, Insurance funds, Equities, Asset recycling, and so forth. One of the most successful financial models is Toll-Operate-Transfer (TOT). This is part of NHAI’s Asset Recycling Plan. Under this plan, the existing highways would be leased to interested parties to collect Toll and also maintain the highways according to the laid standards. In the financial year 2017-18, the NHAI has raised huge funds under this plan. The contractors have bid for higher rates which showered funds for NHAI to finance its development projects. Running high on this success, the Road ministry would continue to leverage this model of financing in the current fiscal year 2018-19. The Ministry of Road Transport and Highways is all set to pull funds from diverse pockets and through different means. For the financial year 2018-19, the government has set a target to raise 1 Lakh Crore from NHAI bonds, Infrastructure Investment funds and Institutional investors like Life Insurance Corporation (LIC), Employee Provident Fund Organisation (EPFO). Around 30% of the target amount would be raised through Asset Recycling Plan and the rest from the aforementioned sources. Last year, the NHAI has raised 47,000 Crores from bonds and the target amount is nearly twice this year. The government of India in its budget 2018-19, announced to roll out NHAI Infrastructure Investment funds through which the NHAI could increase its financial sources. The government of India is proving that ambitious targets can be met only through innovative and experimental moves. #DevelopmentofRoadWaysinIndia #FASTagTollPlaza
