NHAI’s borrowing burden to ease as developers bet big on projects

A case in point being the Shivpuri-Dewas and Gwalior-Shivpuri highways,where the government was to make a grant of Rs 422.25 crore and Rs 331.27 crore but has collected a total premium of Rs 10,474 crore and Rs 3,607 crore respectively. This translates into a benefit of Rs 10,896 crore and Rs 3,938 crore for each of the two projects.

In the case of Kishangarh-Udaipur-Ahmedabad the government will get a premium of Rs 32,000 crore against its initial expectation of getting Rs 13,353 crore as premium from the developer over the 26 year concession period. In the Jabalpur-Rewa highway,where the government was to award the project on grant of Rs 909 crore,developers have asked for just about one third the money at Rs 341 crore,saving the highways authority about Rs 568 crore on the project.

“We may have to revise the financing plan for the development of national highways once the money starts flowing in,” a senior NHAI official associated with the bidding process said. The actual premium collection has been higher than that estimated to the government as its projections are largely based on 5 per cent per annum growth in traffic where as developers have estimated a growth over 8 per cent on certain highways.

The premium quoted also depends on the way a developer views the project in the larger perspective,the official added.

In the case of Dewas-Shivpuri stretch,developers are seeing it as an alternative road route between Delhi and Mumbai over the current highway route cutting across Rajasthan and Gujarat before entering into Maharashtra.

“With the current kind of bidding going on,the government may land up doing 70-75 per cent of the total planned highways on toll basis over the 60 per cent approved by the empowered group of ministers on roads and 56 per cent approved in the B K Chaturvedi committee report,” the official said.