The National Highways Authority of India (NHAI) expects to generate over Rs 5,000 crore revenue from the monetisation of highway assets spanning 849 kilometres over the next three years in Karnataka.
The NHAI has identified 11 key projects in the state, to begin with, as part of the national monetisation pipeline (NMP) announced recently. They include Hyderabad-Bengaluru (six sections), Hadadi-Devagiri, and Maharashtra/Karnataka border to Belgaum to name a few, rating agency ICRA said.
The NHAI is “expediting work” identified within the NMP across Karnataka, which is roughly about 3% of the total road network envisaged under the framework, sources told DH.
It has so far spent Rs 3,514 crore on developing eight out of 11 key road projects. The Rs 6-lakh-crore NMP launched by Finance Minister Nirmala Sitharaman last month had identified roughly 26,700 km of national highways for monetisation.
The source further said that “high-level officers” of the state government and the NHAI are monitoring the development, of which the asset pipeline has been phased out from FY22 till FY25.
“The move will have a positive impact from the viewpoint of private players in the state,” Uma Reddy, Federation of Indian Chambers of Commerce and Industry’s (FICCI) Karnataka State Council Co-Chair, said. However, she was wary that the lifecycle of the infrastructure could be a probable hurdle.
Credit rating agency CARE has a word of caution in its recent report on the pipeline, stating that investors have been watchful of BOT (Build-Operate-Transfer) & TOT (Toll-Operate-Transfer) models largely on account of regulatory risks. It observed that investors see risk in the application of terms of concession and reimbursement from toll receivables, with the timeline for the resolution being long-drawn.
The Niti Aayog has earmarked Rs 1,60,200 crore as an indicative monetisation value over FY 2022-2025 for roads that are up for grabs.