NHAI Bonds, LIC and EPFO to Finance around Rs. 1 Lakh Crore for Highway Construction Programmes
Posted: Apr 10, 2018
The Road Transport and Highways Ministry have decided to raise around Rs. 1 lakh crore through a well devised off budgetary mechanism in the coming financial year in order to fund several of their highway construction projects. This hefty amount is going to be raised via the National Highways Authority of India’s bonds, institutional financing from the Life Insurance Corporation of India (LIC), from the Employee Provident Fund Organisation (EPFO) and also from various other market borrowings.
The Authorities from NHAI and the Road Ministry have claimed that they are also planning on generating the associated revenue via the highway monetisation programme under the popular Toll-Operate-Transfer scheme and also from the forthcoming and other future investment funds of NHAI. The Chairman of the National Highways Authority of India, Mr Deepak Kumar stated that they are currently working on strategies to generate Rs. 1 lakh crore for the forthcoming financial year. He further stated that 70% of this expenditure is going to be raised by the funds and borrowings while the rest 30% will be generated by the highway monetisation programme.
Many officials are flabbergasted with the amount because of the fact that it is almost twice as what they have had to generate this year which was near to Rs. 47,000 crore. The proposal for the NHAI investment funds has been further looked into by the highest authority board back on March 15th 2018. The announcement regarding the same was made in the financial budget speech by the finance minister. Mr Deepak Kumar further emphasised saying that they are seeking the approval from the board following which they will come up with a concrete plan of action for these investments and revenue generation.
As per the reports, the Road Ministry, for the upcoming fiscal year, is expecting to construct around 12,000 km of roads and highways and will award a record of 25,000 km. The allocated budget for this year has been raised to Rs. 71,000 crore from Rs. 61,000 crore which was passed for the financial year of 2017-18. The stretch of construction this year is expected to be around 10,000 km which is by far the highest to be constructed.
Owing to the successful implementation of the Bharatmala highway construction programme, 34,800 km of highways are expected to be constructed by the end of 2022 with an estimated expenditure of Rs. 5.35 lakh crore. The Government is planning on bearing these costs with market borrowings, highway monetisation, central road funds and budgetary allocation. If reports are to be believed, Rs. 2.09 lakh crore will come from market borrowings, Rs. 1.06 crore through private investment and the rest from the central road fund and toll operate transfer model.
With a vision ahead with the Bharatmala programme, the Road Ministry of India is implementing ways to better the road and highway infrastructure of the country. Several ambitious highway projects are expected to be executed in the near future, the outcome of which is going to boost the overall economic development of the country.
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