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As the length of roads constructed in the country has gone up, so has the borrowing of the National Highway Authority of India (NHAI). Last year (2018-19), the NHAI borrowed about ₹61,000 crore against about ₹50,000 crore in 2017-18, government officials said.
Though the elevated borrowing level could be attributed primarily to the spiralling cost of land acquisition — the average cost of acquiring land is said to have soared to ₹2.5 crore per hectare compared to ₹80 lakh in 2012 — reduced fund flow from cess on fuel, which has tapered over the years, has also played a big role in pushing up the numbers.
The cess, originally introduced through an Act of Parliament in the year 2000, went into the kitty of the Central Road Fund (CRF) and was used only for laying roads. The CRF was later renamed the Central Road and Infrastructure Fund, and after a policy tweak, the NHAI was forced to share the collection with other competing infrastructure projects. Estimates show that the highway authority was to get less than a fifth of the total cess collected in fiscal 2019 (₹18,069 crore) and fiscal 2018 (₹15,429 crore).
Available data also reveals that the spiralling land acquisition cost and the funds crunch have not stopped the NHAI from stepping up the pace of road construction: While the average length of roads constructed per day stood at 10.9 km between financial year 2012 and 2014, the same has increased to 22 km between financial years 2016 and 2018.
Last year alone, the highway authority spent around ₹95,000 crore laying new roads , of which a third went towards acquiring land.
The NHAI will pay back its lenders through earnings from toll revenue and by selling the rights to collect tolls for already profitable roads, say officials.
All toll collections of NHAI are deposited into the Consolidated Fund of India, and the toll collection is “ringfenced” to be ploughed back to the highway authority.
Some of the agencies from which the NHAI has borrowed include the Life Insurance Corporation, the Employees’ Provident Fund, State Bank of India, HSBC Corporation and the National Pension Scheme Trust.
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