NHAI raises ₹10,200 crore to meet road construction, says Economic Survey

The National Highway Authority of India (NHAI) raised over ₹10,200 crore up to December 2022 from foreign and Indian institutional investors to meet ever-growing budgetary support for establishing a country-wide road network, the Economic Survey 2022-23 said on Tuesday. The sector is witnessing an increase in the construction of national highways (NHs) and roads over time, with 10,457 km of roads constructed in FY22 against 6,061 km in FY16, elaborated the Survey. “In FY23 (until October 2022), 4,060 km of NHs/roads were constructed, which was around 91 per cent of the achievement in the corresponding period of the previous financial year. Total budgetary support for investment in the sector has been increasing rapidly in the last four years and stood at around ₹1.4 lakh crore during FY23 (as of 31 October 2022),” noted the Survey. The allocation toward national highway construction by the government has registered a significant decadal CAGR of 26 per cent from ₹18,000 crore in FY13 to the ₹1,90,000 crore expected in FY23BE. The NHAI has achieved around 90 per cent of its annual capex target of ₹1,34,000 crore by December 2022, ICICI Securities said. The Road Ministry has constructed 5,337 km of national highways (NHs) till December 29, 2022, against the target of 12,200 km in FY23, which, as per ICICI Securities, implies a rate of construction of around 34 kms per day for FY23. The rate of highway construction in FY22 stood at 29 km per day with an annual construction of 10,457 km, while in FY15 it was 12 km per day. Possibly the fund raising has been achieved out of the government’s vision to monitise public sector assets too. National Highways Authority of India (NHAI) launched “InvIT” in the 2022 financial year not only to facilitate monetisation of roads but also to attract foreign and domestic institutional investors to invest in the roads sector, it stated. The programmatic approach to infrastructure, insisted the Survey, is complemented by structural and financial reforms such as infrastructure financing options of InvITs and REITs, creation of Dedicated Financing Institution (NaBFID), recapitalisation of other sectoral DFIs, push to PPP ecosystem through Model Concession Agreements by line ministries and enabling social infrastructure development through the revamped Viability Gap Funding scheme.