‘Delegation of power will help us achieve Bharatmala targets’

Is the NHAI on track to achieve its targets? Our highway award target set at the beginning of the year was 6,500 km, but with the recent Cabinet approval (to the Bharatmala project) it has been raised to 10,000 km. That is a challenge for us and we are working on it.

Only 2,500 km of projects have been awarded in 2017-18. What makes you confident of achieving the revised target?

We have tendered 4,500 km till October 31. By December-end, 10,000 km will be tendered and these will be awarded by March. That is the internal target we have set for ourselves. This will be helped by the recent delegation of powers to the NHAI. The authority is now allowed to appraise projects and sanction some of them.

What is the size up to which the NHAI can appraise and sanction projects?

As far as EPC (engineering-procurement-construction) projects are concerned, there is no limit. All EPC projects will be appraised by a mechanism set up by the authority and will be approved by it. As far as BOT (build-operatetransfer) projects are concerned, the authorisation is up to ~2,000 crore.

For BOT (toll) with viability gap funding, we will follow the existing procedure of appraisal by the PPPAC (Public Private Partnership Appraisal Committee). In Hybrid-Annuity and BOT Annuity up to ~2,000 crore, the road transport secretary is empowered to appraise projects and the minister is authorised to take the decision. Beyond ~2,000 crore, projects will go to the Cabinet.

Bharatmala is an ambitious programme totalling investments of ~7 lakh crore. Is it implementable? Will the private sector invest in it?

After Bharatmala was approved by the Cabinet our award target was increased to 10,000 km and we will achieve it. Private sector participation will depend on the project and its internal rate of return. We will offer projects with 15 per cent and more IRR (internal rate of return) in the BOT mode to the private sector and below that we will look at EPC.

Will the NHAI be corporatised? Union Transport Minister Nitin Gadkari has spoken about an initial public offering...

We are thinking in terms of creating some bodies or branches for handling expressways and wayside amenities. But it is only at the thinking stage. Once this proposal is put in place we go ahead with the borrowing plan. The proposal will require the approval of the Ministry of Road Transport and Highways, the Ministry of Finance and the Cabinet. The NHAI will continue as an authority but it will have some sort of a corporate identity. The contours of this are yet to be finalised.

Will the NHAI be required to raise more funds?

Money is already in place. If we award 10,000 km, funds will not be required in this financial year but in the next. That plan is already in place.

Now that the NHAI has sovereign ratings, how much do you plan to raise via masala bonds?

The target for the current financial year is ~59,000 crore and we will require all of this money. So far, we have raised ~20,000 crore, from LIC, the EPFO and masala bonds, and will raise more as and when required.