NHAI sets up SPVs for fund mobilisation

NEW DELHI, MAR 13: The National Highway Authority of India NHAI -- needing funds from all possible sources to implement their ambitious...

NEW DELHI, MAR 13: The National Highway Authority of India NHAI 8212; needing funds from all possible sources to implement their ambitious road projects 8212; has set up companies called the Special Purpose Vehicles SPVs for the first time.

The SPVs will not only raise money from states and private investors, it will also borrow from the market and undertake construction of the allotted stretch of road. NHAI chairman Deepak Dasgupta today said, to begin with, two projects will be undertaken by the SPVs on an experimental basis 8212; the Moradabad bypass and the Ahmedabad-Vadodara Expressway. The SPVs would help NHAI enhance its capacity, both financially and manageably, he added.

Work on Moradabad bypass had already been awarded to Moradabad Toll Road Company. To be constructed at the cost of Rs 100 crore, Dasgupta said that Rs 30 crore will be contributed by the NHAI, Rs 3 crore by the Uttar Pradesh Corporation UPC contractors and the balance will be raised from the market. The work was expected to becompleted in eight to 10 months, he added.

The Ahmedabad-Vadodara Expressway, which had earlier run into problems, would also be developed by a SPV. The NHAI chairman, addressing a press conference, said that the Expressway will be developed in two phases with the first one undertaken by a SPV along with the Gujarat Government. The funds will be raised from the market. The second phase, he added, would be developed on a Built-Operate-Transfer BOT basis. The work on the ambitious Rs 50,000 crore National Highways Development Project NHDP was already in progress. This included the four-laning and strengthening of about 13,000 km of highways 8212; 6,000 km of golden quadrilateral connecting Delhi, Calcutta, Mumbai and Chennai and 7,000 km of north-south and east-west corridors.

About the funding, Dasgupta said that the NHAI was tapping all possible sources. Finance Minister Yashwant Sinha announced a cess on diesel in the recent budget. This, along with the petrol cess levied last budget, will yield aroundRs 2,500 crore, and go into the Central Road Fund, used for building highways, NHAI chairman said. The NHAI gets budgetary support of Rs 500 crore every year. He said that the NHAI was getting loans from the WB, ADB and OECF. Seventeen contracts have also been awarded on a BOT basis to bidders by the NHAI and the Ministry of Surface Transport MoST. NHAI chairman said that so far only the relatively smaller projects like bypasses, bridges and road-over-bridges had been given on BOT basis for private financing.