Govt considers giving NHAI ownership of highway projects

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By Rajesh Kumar Singh and Anil Das, edited by Vandana Hingorani/NewsWire18

To give more comfort to lending agencies for road projects, the government is considering a proposal to give ownership of highway projects to the National Highways Authority of India, Road Transport and Highways Minister Kamal Nath said. "We are trying to devise a framework for NHAI which will help raise funds more easily for projects," Nath told NewsWire18 on sidelines of a private event on Sunday. The existing concession agreement does not provide for any recourse to lending agencies, in case a builder defaults on loans.

Lenders think giving ownership to NHAI will help in getting the concession agreement extended and recovering the dues. "Highway projects run through four to five states, and by and large the land is owned by state governments or some central government entity. If NHAI is given the ownership, it gives much more comfort to a lender, who can consider the land as mortgage," Manish Tripathi, Assistant Vice-President, Infrastructure Leasing & Finance Co, said. Ever since Nath took charge, there has been an effort to revive interest in the sector by making more favourable terms for all stakeholders.

The minister said the lack of access to reasonable finance, which afflicted the sector, is not the truth any more. "Finance is available, but we have to see even those who finance are more comfortable," he said. Nath, who introduced the much-debated products' patent regime in India during his earlier tenure as trade minister, began his current office with tall promises. One of them was to make 20 km of roads everyday, a long haul from the current 4-5 km per day. "Things take time to shape up. I think by March the target of 20 km per day should be achieved," he said. The other point on Nath's agenda is restructuring of NHAI, a plan too crucial to his ambitious target. Frequent changes in management--NHAI's current Chairman Brijeshwar Singh is its sixth executive head in three years--and poor regional expanse have rendered the agency ineffective, critics say. Nath himself once called the agency a 'Dwarka-centric organisation', referring to NHAI's headquarters in the western Delhi locality. To ease the burden of NHAI, the ministry is also considering floating an expressways authority on similar lines. "I think the draft proposal on expressways authority should be ready in about three weeks. It will be put on the Internet for comments and suggestions," he said. India has 3.4 mln km of roads, second only to the US, but must make more of them to push economic growth. Nath said NHAI will be awarding contracts worth 1 trln rupees in the next 8-10 months to build 11,000 km roads

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