The share of external assistance in building national highways has declined over the years.

NHAI's borrowing is about Rs 16,000 crore – including Rs 10,000 crore of tax-free bonds and Rs 6,000 crore of 54 EC bonds, an NHAI official said. The 54 EC bonds allow investors to avoid tax on capital gains.

NHAI, through the Department of Economic Affairs, is also in talks with the World Bank for a $1-billion loan (about Rs 5,000 crore) to build two-lane roads.

But, Road Ministry sources were not clear on whether World bank concerns over graft in highway projects would impact the loan or even the country's road-building programme.

The Finance Minister, Mr Pranab Mukherjee, had earlier raised the issue of World Bank shifting donor risks to developing countries to whom it lends.

(This article was published on April 3, 2012)
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