What would be future of many ambitious National Highway projects of the country including the Northeast?
This question continues to haunt everyone as the Prime Minister’s Office (PMO) is concerned over the poor financial health of the National Highways Authority of India (NHAI).
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As per reports, the NHAI has a debt of Rs 1.78 lakh crore which was Rs 40,000 lakh crore in 2014.
The letter from the PMO ironically came a few weeks after Union Roads Minister Nitin Gadkari announcing that Rs 15 trillion would be spent for building highways.
The PMO had issued a letter on August 17, 2019 signed by Nripendra Misra, Principal Secretary to the Prime Minister addressed to Sanjeev Ranjan, Secretary, Ministry of Road Transport and Highways.
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In the letter, the PMO said, “NHAI was totally log jammed by an unplanned and excessive expansion of roads and it is mandated to pay much higher costs for land acquisition and construction.”
The letter to the NHAI assumes significance as the country is reeling under financial crisis with the Union Finance Ministry planning steps to improve the state of the economy.
The letter also said, “Road infrastructure has become financially unviable; private investors and construction companies are withdrawing from green-field projects.”
However, Union Roads Minister Gadkari has allayed fears brushing aside the apprehensions.
According to him, the NHAI is an AAA rate organization and it could raise enough debt to keep constructing roads of the country.
The NHAI officials have already reportedly responded to the PMO letter.
The PMO in the letter had suggested that the NHAI should aggressively monetise its existing assets, recognize portfolio and check commercial viability of the projects.
In order to reduce financial stress, the PMO also suggested a return to traditional build-operate-transfer (BOT) projects.
Now, the question is how the NHAI implements the suggestions from the PMO and the government carries forward its growth model in terms of infrastructure development.