Highway agency NHAI eyes surplus revenue by FY28 – Times of India

NEW DELHI: Amid concerns over NHAI’s debt, the highway construction agency has estimated that its repayment obligations will peak at Rs 62,000 crore in 2027-28, by which time its toll revenue will also rise to Rs 69,000 crore, leaving it with surplus after paying loan servicing.
Besides, it is budgeting for receipts of over Rs 40,000 crore from monetisation of road projects. It is banking on a big jump in revenue from wayside amenities – complexes along national highways being developed for rest and refreshment of commuters having facilities for staying, fuel station, food courts and other facilities, which is projected to rise from Rs 13 crore last year to nearly Rs 1,400 crore by 2027-28.

The calculations are based on two assumptions. First, all future highway construction beyond 2026 will be funded directly through the Union Budget, which will not result in additional debt burden on NHAI. Second, after FY25, it will not undertake project-based financing for expressway projects or economic corridors, such as, the Delhi-Mumbai expressway, where the highways authority is securitising its future toll, while getting loan for construction of the specific highway.
Over the last few years, the finance ministry has expressed concern over the large amount of debt on the books of NHAI, prompting the Centre to stop fresh borrowings by the entity. Instead, it has been providing funds from the budget, which also reflects in a higher government capex for the road sector.
Estimates put together by NHAI are seen to be aimed at countering this perception and suggest that it has not taken over liabilities beyond its capacity to pay back. Besides, officials have argued that the loans on its books were based on the projects that it was asked to build by the Centre, particularly after the approval of flagship 34,800 km Bharatmala Pariyojna for highway development in 2017 and the borrowings were provided for in the Budget and permitted by the finance ministry.
“To create this NH infrastructure, the NHAI has raised debt from the market in addition to the budgetary allocation to meet the fund requirement. This has been done according to the limits approved in the Union Budget,” said a source. They said NHAI has worked out the debt mitigation measures, which currently stands at Rs 3.4 lakh crore and submitted to the government. First, it has estimated consistent rise in toll revenue as more completed stretches are brought under tolling and nearly 150 projects, which were earlier bid out to private highway builders under the build-operate-transfer (BOT-toll) model will return to the NHAI in the next 1-10 years. The NHAI can either collect toll for regular revenue or monetise them for upfront revenue.
Data show that the toll collected by NHAI has increased by almost 50% in the past couple of years. For example, in 2021-22, the total toll collection was Rs 12,650 crore and during last year it touched Rs 18,915 crore. This year, the toll revenue is likely to be around Rs 25,000 crore.
“The NHAI will repay the entire loan outstanding in the next 15-16 years and we will also have a surplus amount from toll revenue to undertake projects using a portion of this for developing more NH projects,” said an official.
The NHAI’s budget is mainly spent on highway construction, while barely Rs 4,000-5,000 crore is spent on maintenance and another Rs 400 crore is establishment expenses, including the staff salary.