New Delhi: Increase in external borrowing by the National Highways Authority of India (NHAI) to fund its highway expansion programme led to a rise of approximately 24 per cent in its debt in 2020-21.
In a written reply to the Rajya Sabha Monday, Highways Minister Nitin Gadkari noted that the NHAI’s debt was Rs 3.07 trillion (Rs 3.07 lakh crore) on 31 March 2021, up from Rs 2.49 trillion (Rs 2.49 lakh crore) in March 2020.
Replying to a question from BJP MP Sushil Modi, Gadkari also said the NHAI paid Rs 18,840 crore as interest in 2020-21.
The minister further informed Parliament that, since 2017, the NHAI has availed of external borrowing to the tune of Rs 3,000 crore.
“Further, total borrowing of NHAI increased from Rs 74,742 crore outstanding as on March 2017 to Rs 3,06,704 crore in March 2021,” read Gadkari’s reply.
In January 2020, it was reported that the NHAI faced a ‘debt trap’ as its borrowing — the bulk of which is availed from domestic markets — had shot up about 1,800 per cent since 2014-15.
The authority’s debt servicing cost is projected to rise nearly four times to over Rs 61,000 crore in 2022-23, from Rs 14,443 crore in 2018-19.
NHAI’s finances also hit by large number of arbitration cases
According to Gadkari, the finances of the highway authority have also been hit by the large number of pending arbitration cases.
His reply noted that, at present, there are 140 arbitration cases pending before various tribunals. In these cases, Rs 91,875.70 crore of road developers or concessionaires claims and Rs 44,600 crore of NHAI’s counter claims are involved for adjudication, he said.
Asked how the ministry will manage the huge debt, Gadkari said apart from tolls on completed public-funded roads, the NHAI is also using innovative financing models like monetising its road assets through ToT (Toll Operate Transfer) to generate revenue for repayment of loans as well as to fund new highway construction.
In ToT, the right to collect toll fees for operational public-funded national highway projects is assigned for a pre-determined period to concessionaires (developers or investors) against upfront payment of a lump sum amount.
Operation and maintenance obligations of such projects stay with the concessionaire till the completion of the period.
“Since 2017, NHAI has serviced its debt amounting to Rs 74,337 crore. The NHAI is doing regular exercise for balancing its assets and liabilities ensuring a sustainable debt level,” the minister said.
In a report submitted in Parliament on 28 July, the Parliamentary Standing Committee on Transport, Tourism and Culture also expressed concern over the NHAI’s huge debt servicing liability.
The committee’s report noted that for the ongoing financial year (2021-22), the NHAI’s debt servicing liability is equivalent to 33 per cent of the overall budgetary allocation of Rs 1,18,101 crore of the ministry.
The committee said the NHAI should tap into the funds available with insurance companies and pension funds, both Indian and foreign.
It also recommended that the Reserve Bank of India, with due consideration to the sufficiency of the foreign reserves, could also consider the possibility of utilising surplus funds to finance long-term road infrastructure projects in the country.
(Edited by Rachel John)