The National Highways Authority of India (NHAI) is sitting over a huge debt of Rs 1.78 lakh crore as of 2019, up from Rs 40,000 crore in 2014, with reports stating that the Prime Minister’s Office (PMO) has flagged major concerns over the future of many ambitious highway projects due to NHAI’s poor financial health.
According to reports, the PMO sent a letter signed by Nripendra Misra, principal secretary to the Prime Minister, addressed to Sanjeev Ranjan, secretary, ministry of road transport and highways, which said, “NHAI was totally log jammed by an unplanned and excessive expansion of roads and it is mandated to pay much higher costs for land acquisition and construction”.
It also raised concerns that many private players were withdrawing from greenfield projects.
“Road infrastructure has become financially unviable; private investors and construction companies are withdrawing from green-field projects,” the letter said.
While NHAI officials have already responded to the PMO, which has suggested that NHAI should aggressively monetise its existing assets, road minister Nitin Gadkari brushed aside these apprehensions, noting that the NHAI is a AAA rated organisation and that it could raise enough debt to keep building roads.
The NHAI is also in talks with State Bank of India to raise up to Rs 50,000 crore. While some say that LIC funds may be used for highway projects, sources say many officials in the PMO are opposed to the idea.