TheNFAPost Podcast

Mumabi, NFAPost: Indian Infrastructure business opportunity is skyrocketing and its is evident in the fact that the National Highways Authority of India (NHAI) has come up with Rs 3 trillion of contract for FY 2022.

The opportunity assumes significance as NHAI is undeterred by the second wave of the pandemic and going ahead with its plan to give more projects to contractors.

According to Arvian Research, the NHAI has set a highway construction target of 4,600 km for the current fiscal. “This is happening at a time when NHAI already made stellar growth for fiscal 2021. The construction target for the year roughly translates into 12-13 km a day,” states Arvian Research.

It is interesting to note that NHAI has awarded 141 projects with a combined length of 4,788 km in 2020-21. The rewarding of the project during the last fiscal was the highest in the last three years. During fiscal 2020 it was 3,211 km and 2,222 km in 2018-19.

As per statistics, the capital cost of the projects awarded in 2020-21 amounted to Rs 1,71,226 crore, the highest ever, compared with Rs 81,324 crore in 2019-20 and Rs 64,009 crore in 2018-19. NHAI has constructed 18,500 lane km (50 lane km/day) during 2020-21, 40% more than in 2019-20 and 91% more in 2018-19.

NHAI is giving utmost priority to quality in the execution of projects that its adherence to the highest quality standards during the construction of projects. The organisation also undertakes multilayered inspections to check the quality. To ascertain quality, recently NHAI also sought the help of reputed retired government officials.

As many as 111 of such projects have been identified so far. These inspections will be held in addition to the regular inspection of the projects by NHAI officials. The quality inspections will not only ensure adherence to standards but will also verify compliance to specific contractual requirements and good engineering practices with reference to procedures formulated as per the approved quality assurance plan.

Indian infrastructure major is also facing a rising debt burden as it has skyrocketed to Rs 2,72,484 crore as on November 2020. According to Arvian Research NHAI debt is likely to reach Rs 3.69 lakh crore by the end of 2022 fiscal. Also, about 15% of the NHAI’s expenditure in 2018-19 was on debt servicing, compared with 11.33% in 2017-18.

NHAI has awarded projects through the engineering procurement and construction (EPC) and hybrid annuity model (HAM), in the ratio of 60:40. The authority has a robust stream of funds including budgetary outlays, borrowings, and the funds being realised through the toll-operate-transfer (TOT) route.

NHAI has decided to raise funds via Infrastructure Investment Trust (InvIT) and plans to garner Rs 5,100 crore. he NHAI InvIT, the second one promoted by a public-sector entity is going to hit the market soon. Sebi has approved the draft prospectus submitted by the National Highways Infra Investment Managers (NHIIM), the investment manager which will manage the InvIT.

Previous articleUiPath Collaborates With Trainocate To Build Future Ready Workforce
Next articleNokia To Transform PLDT And Smart’s Network & Standardise Virtualisation Environment


Please enter your comment!
Please enter your name here