The National Highways Authority of India (NHAI) is all set to hit the bond market to fund its ambitious highway development programme.
The highway agency has finalised its plan to issue tax-free bonds next month. “We are coming out with public issue in two tranches. The first tranche for Rs 11,200 crore will come out in October-end. This would be followed by a second tranche for a little over Rs 8,000 crore in January or February 2016,” NHAI chairman Raghav Chandra told HT.
NHAI has been permitted to raise Rs 24,000 crore through tax-free bonds this fiscal year. It has already raised Rs 3,872 crore through private placement route on September 18.
NHAI would require funds to the tune of Rs 70,000 crore this fiscal year to finance its highway expansion.
The highways ministry has set a target of awarding 10,000km stretch of highways in 2015-16. Of this 5,000km has to be awarded by NHAI and the rest by the ministry. NHAI has awarded 2,380km stretch till September.
Chandra said NHAI has already put in place its plan to arrange funds for this fiscal.
“We intend to raise Rs 24,000 crore through tax-free bonds, another Rs 25,000 crore from fuel cess and the rest from toll revenue,” he said.
The NDA government’s ambitious plan to build 30km of highways every day over the next four years would require fund to the tune of Rs 1.76 lakh crore, which is six times the annual Mahatma Gandhi National Rural Employment Gurantee Act budget.
At a time when private sector investment in the sector has not stepped up, the highways ministry is looking at alternate avenues including raising money from the market.
The 30km/day target is 10km more that what the UPA government had set but miserably failed to achieve.