The National Highways Authority of India (NHAI) will not fall into a debt trap as its road projects are revenue accretive, said Nitin Gadkari, minister of road transport and highways. In an interview with ET, he said the government is giving priority to building green highways and logistic parks, and giving a push to alternative fuel vehicles. Edited excerpts:
What are your ministry’s top priorities?
Reducing imports, increasing exports, raising employment potential and improving infrastructure while lowering pollution are our focus areas. Solutions that pave the way for import substitution, are cost effective, pollution-free and indigenous are priority.
Green express highways, which will lower logistics cost and save fuel, are a key priority. Development of logistics parks has been identified as a focus area. We are also looking at other avenues, including utilisation of the land available with the state transport corporations. We have proposed that the centrally located land with state transport corporations meant for bus stands can be converted into bus ports. The land will be provided by them and we will develop it, with the profit being shared equally.
Tourism also needs to be encouraged. It means setting up more ropeways, cable cars, multi-level parking spaces and funicular railways. We have 260 proposals for these.
Switching to electric transport is a big priority. A tender for 5,500 buses saw winning bids at ₹41/km for air conditioned and Rs 39/km for non-AC buses. Double-decker electric buses are here, too, and we can now offer business-class type luxury to tourists. Public transport needs to be encouraged.
Blending biofuels, such as ethanol and methanol, is also a key area. The goal is to blend 15% methanol with diesel.
What role will highways play in the Gati Shakti plan?
The biggest advantage of Gati Shakti is that it breaks the silos in which the government operates. There is a website where we can see where the clearances are stuck. There were delays in clearances pertaining to environment and forest, and railways. The pace of approvals has improved, as has the coordination between stakeholders.
Why has the pace of construction of highways dropped?
This year a large part of the country received heavy rainfall, which disrupted construction. There have been issues but we hope to gear up soon. This year we should be able to do as much as last year.
Budgetary allocation for the roads sector has increased significantly. Will all the money be utilised?
We would be able to spend the entire FY23 allocation by January. Work is on at a healthy pace. The only bottlenecks that we face in road construction are that of land acquisition and clearances from government departments…
Will the government raise more money via InvIT route for roads?
Our InvIT bond issue was oversubscribed within seven hours. We have the support of the people and no dearth of money. We can approach the capital market every fortnight to raise money… The only problem is that we end up depositing the money we raise in bank accounts. We do not have projects where the money can be immediately deployed. Funds would be raised as and when there is a need.
Highway construction is still largely driven by EPC. Why have BOT projects taken a back seat?
BOT did not find many takers, as players were facing financial issues and bank lending was also not coming due to stress in the sector. We have improved the health of the sector through EPC projects. Now that things are better, companies can participate in BOT projects and we will shortly start offering them.
There has been discussion about tweaking the hybrid annuity model and lowering government contribution to 20% of the project cost from 40%. What’s your view?
There is nothing happening on these lines. The response at 40% is good. The financial health of contractors, appetite of investors, and preparation for investments decide the model under which projects are awarded. HAM was started when road building sector had collapsed and BOT had no takers. Some 406 projects worth ₹3.85 lakh crore remained stalled. We terminated projects worth ₹40,000 crore and saved banks from NPAs of about ₹3 lakh crore. We have fixed these issues to a large extent.
There have been concerns over high debt levels of NHAI. Your views?
These concerns are unfounded. No project of NHAI is loss-making. The money invested is recovered in 12-15 years with interest. Our 10-12-year-old assets are debt free and earning a return. So, new projects like the Mumbai-Delhi highway would need some time to recover the investment, but the life of the highway is 100 years. So NHAI’s current annual toll income of ₹40,000 crore will go up to ₹1.40 lakh crore by 2024. The biggest initiative is to increase the life of roads and reduce the cost of construction. So, our economic viability is very good in the years to come and NHAI can never fall into a debt trap.
Do you think the progress of road monetisation has slowed down?
There is no slowdown. Money is raised when there is a requirement. We are not able to spend the budgetary grant and the money already with us. So what will we do with more money raised through monetisation?
We are preparing more InvITs. I have asked National Highways and Infrastructure Development Corporation Limited to approach the capital markets and use the InvIT route.
After some EVs caught fire, stricter norms were introduced but they were put on hold. Why?
Problems are bound to arise while adopting new technologies. Therewere no appropriate supply chains for EVs. Factories were absent and materials were imported. Some poor quality equipment was used. The industry is developing, vendors and quality standards are being established. Everything will be regularised in six months.
Is charging infrastructure a challenge for adoption of EVs?
Every scooter, auto rickshaw and car has a charger that can be used at home. Problems arise when someone is covering long distances, such as from Mumbai to Delhi. To address it, 670 charging stations are being set up on that route. The truth is that people are not using their EVs for long-distanc.
I have a hydrogen car. There are no filling stations on the road. I refill it in Faridabad and bring it back. Once there are more hydrogen centres, the number of cars will also grow.
There were similar teething problems when CNG was introduced.
What about debate over Maharashtra losing projects to Gujarat?
Such controversies should be avoided… Everyone should develop and ultimately the investor has a choice of economic viability. Maharashtra is also the fastest growing state, and so is Gujarat. So we should focus on development.