The National Highway Authority of India’s (NHAI’s) debt is anticipated to go previous the Rs 3 lakh crore-mark by the finish of the existing fiscal. As on November-finish, the authority’s debt stood at Rs 2,72,484 crore and the authority is most likely to borrow an additional Rs 31,500 crore more just before March.
In the Budget for the 2021-22 fiscal, the government is most likely to permit NHAI to borrow an additional Rs 65,000 crore in 2020-21, which suggests its total debt would attain Rs 3.69 lakh crore by the finish of 2021-22 fiscal. At the finish of 2018-19, NHAI had Rs 1.79 lakh crore debt.
So far in the existing fiscal, NHAI has raised Rs 33,500 crore debt of which Rs 5,000 crore has been raised as extended-term loan from the State Bank of India, Rs 1,500 crore by way of 54 EC bonds and Rs 27,000 crore by way of taxable bonds.
NHAI’s debt is certain to go up because project awards by way of BOT-Toll mechanism came to a naught because 2018-19 right after falling sharply and regularly from a level of 96% of all project awards in 2011-12.
At the exact same time, there is a major onus on the agency to hold the pace of highway building momentum when threat capital from private players is practically entirely absent. While EPC contracts have been the mainstay of highway building in current years, other models like hybrid annuity model, 40% of the bid project expense is payable to the concessionaire by NHAI.
So far in the existing fiscal also, NHAI has awarded projects by way of the engineering procurement and building (EPC) and hybrid annuity model (HAM), in the ration of 60:40. Of its 4,500 km awards target for the existing fiscal, NHAI awarded projects for a total cumulative length of 1,330 km in the initially half of the existing economic year, which is 1.6 occasions larger of 828 km awarded in the exact same period of 2019-20 and 3.5 occasions larger of 373 km awarded in of the exact same period in 2018-19.
The authority has been mandated to create 34,800 km (like 10,000 km residual NHDP stretches) highway beneath the initially phase of Bharatmala Pariyojana in October, 2017 with an estimated outlay of Rs 5.35 lakh crore. Up to March 2020, projects involving highway length of 10,676 km have been awarded beneath Bharatmala Paroyojana.
On the building front, the authority’s target for the existing fiscal is 4,500 km compared with a record of 3,979 km building in the final fiscal.
Again, its non-debt receipts, like budgetary help, cess fund, ploughed back toll remittances and capital grants not increasing in tandem with the expenditure. On the other hand, about 15% of the authority’s expenditure in 2018-19 was on debt servicing, compared with 11.33% in 2017-18.
The government keeps on downplaying the issues more than the NHAI’s surging debt, citing that the loans have sovereign assure. “We have our future 15 years’ estimates of cash flow — how much toll we will get, how much repayment we have to do — we are very comfortable,” NHAI’s chairman SS Sandhu stated lately.
The Comptroller and Auditor General of India (CAG), even so, has picked a number of holes in the profit and loss account and balance sheet furnished by the body for 2018-19. These include things like overstatement of fixed assets, booking receipts spread more than 30 years as the year’s earnings, and even the failure to develop a mandated reserve fund to service debt.