NHAI in sound fiscal health with strong projects pipeline: Chairman NN Sinha
Allaying fears of NHAI facing fiscal crisis or high contingent liabilities, its Chairman NN Sinha on Wednesday said the Authority was in a "very sound" position with a strong pipeline of projects.
The National Highways Authority of India (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.
"There have been reports in the sections of media that contingent liabilities of NHAI are something of Rs 3 lakh crore. Either people do not understand what contingent liability is or the numbers are misreported. Contingent liability is uncertain in nature.
"Our assessment and depending on the pay out ratio that we have, we do not see that much number happening ... We see the total amount of claim on NHAI on account of arbitration is about Rs 70,000 crore," Sinha said here at a CII event.
He said the numbers projected (Rs 3 lakh crore) were clearly "way off".
"The commentary is clearly ill-informed and probably designed to add to the gloom ...We should take objective fact ... NHAI books are in the open if anybody wants to see...just because you have a commentary and you want to add to the kind of picture you want to portray ... that is being very unkind and not fair for the sector," he said.
Sinha said, currently NHAI has arbitral claims worth Rs 70,000 crore and there are multiple sources of revenue.
Despite model code of conduct during elections, he said NHAI is on way to construct 1,000 km of more highway projects than last year and "spending was going to be more rather than less. There should be no concerns".
"There are concerns being raised whether the Authority will be able to take up projects other than on the BOT toll mode... I should allay your concerns that NHAI does appraise the projects on the basis of viability and there are projects which fit across the viability spectrum," he said.
Sinha said abut 4,140 km projects meet 9 per cent or more level of returns and this does not include greenfield projects as the traffic numbers are uncertain.
On BOT (build, operate, transfer) toll mode, he said all projects will not fit into BOT and there are variety of instrumentation approaches, adding that under Bharatmala programme itself about 60 per cent of the projects will be funded under HAM (hybrid annuity mode), about 30 per cent on EPC (engineering, procurement and construction) mode and about 10 per cent on BOT toll mode.
"Obviously when you have greenfield projects like Vadodara Mumbai Expressway, some of it may be executed under EPC and some on HAM, but BOT toll like approach cannot be viable," he said.
On funds, he said the Authority will request the government for more budgetary resources and it is also mobilising resources from the market besides revenue stream from highways construction.
He also said NHAI is likely to float InVit (Infrastructure investment trust) by the end of the year and was awaiting the Cabinet approval.
Besides, Masala bonds to the tune of Rs 5,000 crore will be raised this year.
Sinha also talked about contributing to the Jal Shakti Abhiyan through water cultivation mechanism across highway construction.
Last month, Highways Minister Nitin Gadkari also termed reports indicating financial troubles at NHAI "baseless and far from reality."
Earlier addressing the CII Infranet 2019, Minister of State for Road Transport and Highways Gen VK Singh stressed on the need to customise global leanings and technologies to meet indigenous needs in road and highways sector.
ALSO READ: Salem-Chennai road project is of 'national importance', NHAI tells Supreme Court
ALSO READ: Government asks NHAI, states to avoid building highways through wildlife sanctuaries
