NHAI's Monetisation Gambit

The National Highways Authority of India (NHAI) has drawn up an ambitious and aggressive plan to raise over  Rs 85,000 crore by fiscal 2025 by monetising assets under toll operate transfer and infrastructure investment trusts (InvITs). However, after tasting initial success in the first round, where it raised  Rs 9,681 crore against a target of  Rs 6,258 crore for 680 km of highways, it has found the going tough. The banking system is reluctant to lend and with the economic slowdown, investor appetite for such long gestation projects is low.

The NHAI's second round of auctions in February had to be cancelled due to tepid response from developers. At the same time, pressure continues on the NHAI to raise its own funds. Even as the third round for 566 km is yet to close - bidding window had to be extended to October 31 from September 11 - it has already floated a fourth round for 401 km.

The funding crunch is affecting the pace of road construction, which had hit an all time high 30 km per day in 2018/19. For 2019/20, the NHAI is likely to miss its target of 4,500 km. With the government too low on revenues, the slow pace will delay ambitious infrastructure schemes like Bharatmala, unless the NHAI can find a way to successfully auction its assets. @sumantbanerji