NHAI's Strategic Moves Present Clear Roadmap For Debt Repayment Amidst Project Delays
The National Highways Authority of India (NHAI), tasked with the development, maintenance, and management of national highways on behalf of the Government of India, has undergone substantial changes in its funding mechanisms. The government allocates funds for highway development through budgetary allocations, borrowing approval under Internal and Extra Budgetary Resources (IEBR), and asset monetisation. A significant shift in strategy is the discontinuation of IEBR from the fiscal year 2023-24.
Union Minister of Road Transport and Highways, Shri Nitin Gadkari, underscored NHAI's clear roadmap for debt repayment, aligning with the organisation's commitment to responsible financial management in the evolving landscape of national highway development, in a written reply in the parliament on Wednesday.
The NHAI, being a crucial infrastructure agency, has had to adapt its approach to meet financial obligations. The borrowing pattern in the last five years reflects a proactive approach to financial management:
2018-19: Rs. 61,217 Crore
2019-20: Rs. 74,987 Crore
2020-21: Rs. 65,080 Crore
2021-22: Rs. 76,150 Crore
2022-23: Rs. 798 Crore
It is noteworthy that in FY 2022-23, NHAI raised Rs. 798 Crore through 54EC bonds. Importantly, there will be no IEBR for FY 2023-24 onwards, indicating a strategic shift in financial management.
Despite NHAI's efforts, approximately 167 projects face delays due to a myriad of challenges, including land acquisition, tree cutting, utility shifting, unseasonal rainfall, local agitation, forest clearance, and the unforeseen impact of the COVID-19 pandemic. The increased costs associated with these delays are contingent on project-specific factors and can only be definitively assessed upon project completion.
NHAI, established under the NHAI Act of 1988, functions as the executing agency for the Government of India. It actively collects user fees on behalf of the government, and all NHAI receipts are deposited into the consolidated fund of India (CFI).
