NHAI to raise Rs. 1 lakh crore through monetisation of highways in next 5 years

On Thursday, Union Minister for Road Transport & Highways and Micro, Small and Medium Enterprises, Mr. Nitin Gadkari announced that the National Highways Authority of India (NHAI) aims to collect Rs. 1 lakh crore (US$ 13.77 billion) through the monetisation of national highways over the next five years, and he encouraged industry players to engage in it to earn rich dividends.

This will stimulate economic development, and the funds will be used to establish solid infrastructure.

He said, “In the next five years, the NHAI plans to collect Rs. 1 lakh crore (US$ 13.77 billion) by monetising highways under the toll operate transfer (TOT) system.”

Asset monetisation provides a good market opportunity for industry players in existing infrastructure while also assisting the government in maximizing the value of infrastructure investment.

Mr. Nitin Gadkari said, “For both industry players and the government, it would be a win-win scenario. It would result in the nation's infrastructure being strengthened.”

On a case-by-case basis, the NHAI is authorized to monetise public-funded national highway projects that are operational and receiving toll for at least one year after commercial service using the TOT model.

He also outlined the launch of the national asset monetisation pipeline as a game-changing initiative that will encourage long-term infrastructure investment.

A new development finance institution (DFI) is being established by the government.

The institution will begin operations with a capital base of Rs. 20,000 crore (US$ 2.75 billion) and a three-year borrowing target of Rs. 5 lakh crore (US$ 68.86 billion).

The minister mentioned the National Infrastructure Pipeline (NIP) as a "first-of-its-kind" initiative with > 7,300 projects worth Rs. 111 lakh crore (US$ 1.53 trillion) to be completed by 2025.

He said, “Under the NIP, projects worth Rs. 44 lakh crore (US$ 605.93 billion) are being implemented, with another Rs. 34 lakh crore (US$ 468.22 billion) in the conceptualization stage and another Rs. 22 lakh crore (US$ 302.96 billion) in the construction stage.”

He stated that road construction has reached a speed of 35 kilometres per day and is expected to cross 40 kilometres per day by the end of the month.”

The minister mentioned it as a "phenomenal achievement," saying that deals for a total length of 13,521 km of highways have been awarded under the Rs. 5.35 lakh crore (US$ 3.68 billion) Bharatmala program, while projects for a total length of 16,500 km are in the (detailed project report) phase.

He stated that bids have been invited for another 4,800 kilometres of highway projects. He also praised the construction industry for being able to meet the growing demand.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.