Road sector to get Rs 20,000 crore loan

Road sector to get Rs 20,000 crore loan
PRESS TRUST OF INDIA

NEW DELHI, DEC 18: The multilateral funding agencies World Bank and Asian Development Bank has agreed in principle to extend Rs 20,000 crore for the ambitious Rs 54,000 crore National Highway Development Project, a top government official said today.

"The World Bank will extend $ 400 million while the ADB will offer another $ 200 million a year, aggregating Rs 20,000 crore out of the Rs 54,000 crore investment required in the next seven years for India's road sector," Deepak Dasgupta, chairman of National Highway Authority of India (NHAI) said at a seminar on infrastructure organised by CII here.

"The multilateral lending agencies have recently agreed, in principle, to extend the credit line," Dasgupta said. The NHAI chairman said Rs 20,000 crore would come from the Re one per litre cess on petrol and diesel, while another Rs 10,000 crore would be raised through market borrowing.

"NHAI will issue tax-free bonds in the coming years to raise funds from the domestic market," Dasgupta said. The governmenthas granted permission to the NHAI to issue bonds, he said adding that the borrowing would be through special purpose vehicles, created for the purpose.

He said the remaining Rs 4,000 crore would be brought in by private sector participants in the sector. NHAI chairman said the country required Rs one lakh crore for upgrading the existing national highways under NHDP. "Policy level discussions are on at the Central and state government levels and many initiatives are being considered," he said.

About NHAI's initiative, the chairman said the authority would stand facilitator in private projects by participating in equity up to 40 per to enhance viability of the project. The authority will also provide "shelf projects" and arrange for model concession agreement with the financial institutions. Detailing the progress made in the sector, Dasgupta said model concession agreements in 20 projects have been finalised.

Dasgupta said, in case of build-own-transfer (BOT) projects, NHAI will provide shadow andannuity toll to private players.

So far, the shadow toll facility is provided to the 65 km stretch of Panagarh-Palsit highway and 60 km Tuni-Ankapalli highway.

"Sixteen other projects have been awarded shadow toll facility directly by the Ministry of Surface Transport," he said.