NHAI to propose a rolling plan for highway development

Rationalisation of highway building was a part of the finance minister Nirmala Sitharaman's budget speech for FY20.

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NHAI will propose a rolling plan for highway development in the country, which can be reviewed every two to three years to see that highway building is rationalised and the authority gets the maximum value out of building a new road,NHAI chairman Sukhbir Singh Sandhu.

The idea behind the proposal is to have a plan that moves on realistic development, and in tandem with developments in other infrastructure sectors, whether it is of airports or industrial parks, he said.

“We are proposing a national plan, which will be rolling, and is reviewed every two to three years on the basis of changing traffic dynamics and other developments,”.

“We will soon be approaching the ministry (of road transport and highways) on this,” he added.

Worth mentioning here is that rationalisation of highway building was a part of the finance minister Nirmala Sitharaman’s budget speech for FY20.

“The government will carry out a comprehensive restructuring of the National Highway programme to ensure that the National Highway Grid of desirable length and capacity is created using a financeable model,” Sitharaman had said.

Sandhu said that such a plan will help the authority derive the maximum value in terms of toll collection while building a new road.

Sandhu further said that the Build-Operate-Transfer (BOT) model has finally seen success after changes in the model concession agreement for such projects, and bids for at least two more BOT projects will be invited soon.

In January, NHAI had unveiled a revised model concession agreement for BOT projects in order to draw larger participation from investors. In BOT projects, private sector developers build a road using their own funds, operate it and then transfer it to the government after a specified period.

“We have tested the new model concession agreement and it’s a success, the highest bidder is offering us 11% revenue share,” Sandhu said. “We will put out at least two more projects immediately on BOT mode,” he added.

Sandhu said that so far as the asset monetisation exercise of the authority is concerned, it will go for toll-operate-transfer, infrastructure investment trust (InvIT), and toll securitisation through SPV for monetising its assets.

“We filed (InvIT application) on 31st March with Sebi and we hope to get approvals in three weeks, and by mid-May, we should have the money with us,” the business daily quoted Sandhu as saying.

He added that more assets worth Rs 4,000-5,000 crore will be added to the InvIT in FY22.