Gadkari, along with the Minister of State for Road Transport and Highways V K Singh, held a day-long review of the progress of national highways projects at the NHAI headquarters here today.
The infrastructure investment trust can truly be a force multiplier that could significantly prop up investor confidence
The NHAI has identified various stretches on a pan-India basis that will be constructed through the PPP mode on the build-operate-transfer (toll) basis, the Ministry of Road Transport and Highways said in a statement.
The Secretary stated that better dialogue with lenders will be initiated. He said that the Ministry is trying to bring in dispute resolution, in order to reduce the need for arbitration.
It is essential that NHAI leaves enough on the table to give a decent yield to investors
Revenue collection barely covers the interest servicing cost of these projects, let alone project returns, says an SBI Caps report
Gadkari indicated that asset monetisation would provide most of the funds in the future.
Better road connectivity can aid economic growth but the government is worried that the NHAI has taken on more than it appears equipped to handle
The NHAI is on its way to construct about 4,500 km of projects, higher by about 1,000 km than last year's 3,300 km of projects, he said.
If the government actually accelerates clearance of dues to infrastructure developers they will benefit, but that’s not the only problem the sector faces
Projects which would give higher yields due to traffic density and demand would be fast-tracked with an aim to ‘recycle assets faster’
There are nine highway stretches of 566.27 km in TOT Bundle-3 in states of Uttar Pradesh, Bihar, Jharkhand and Tamil Nadu.
InvITs are instruments on the pattern of mutual funds and are designed to pool small sums of money from a number of investors to invest in assets that give cash flow over a period of time.
According to Gadkari, the Delhi-Mumbai Expressway is likely to be completed in the next three years
A favourable response from investors is critical for the success of the toll-operate-transfer (TOT) model, under which the bundle of projects are being auctioned, as it would help tap funds for the authority for road projects.
The project is expected to be completed by 2021 and would reduce the travel time from Mumbai to Delhi by road to 12 hours.
In a circular to National Highways Authority of India (NHAI), National Highways and Infrastructure Development Corporation Ltd (NHIDCL), Border Roads Organsiation and states, it said all necessary clearances should be obtained before constructing highways in such areas.
The TOT model was implemented in 2016 to monetise publicly funded highways.
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The tribunal had earlier rapped NHAI for not maintaining the mandatory green cover along national and state highways, adding that marriage lawns had come up besides the road instead of trees.
The company said it had referred the matter to arbitration after NHAI failed to handover the land required for the project.
IRB Infrastructure happens to be our top idea in the sector
The flyover will reduce the traffic time at the Dhaula Kuan signal, helping commuters to reach Delhi IGI airport 30 minutes early.
Sources told Moneycontrol that NHAI could merge these stretches with highway stretches under other rounds of bids.
The contract to build 56 km highway stretch is under hybrid annuity mode (HAM) under which the government provides 40 per cent of the project cost to start work, while the remaining investment is made by the developer.