Roads to be privatised too? PMO suggests NHAI to stop making roads and let pvt sector take over     

Principal Secretary to PM Modi, Nripendra Mishra has reportedly advised NHAI to stop constructing roads themselves and start encouraging the private sector to build the roads, run completed projects

Roads to be privatised too? PMO suggests NHAI to stop making roads and let pvt sector take over      

NH Web Desk

In a letter addressed to the Ministry of Road Transport and Highways, principal secretary to the Prime Minister, Nripendra Mishra has reportedly advised NHAI to stop with constructing roads themselves and start encouraging the private sector to build the roads and take over the running of the completed projects.

“Road infrastructure has become financially unviable; private investors and construction companies are withdrawing from greenfield projects," the letter reportedly said. The letter asks the NHAI to consider becoming a road asset management company and to monetize its assets heavily.

According to Livemint, PMO thinks that the hybrid annuity model does not yield results anymore because it is unsustainable. To monetize its assets, Misra suggests that the NHAI can use a toll-operate-transfer, wherein long term concessions on toll revenue are offered to a bidder. According to the report in Livemint, Misra also suggests to go for InvITs. InvITs are trusts that manage income-generating infrastructure assets, typically offering investors regular yield and a liquid method of investing in infrastructure projects.

PMO has asked NHAI to look into it’s financial management and let them know why the financial instability is so rampant. After this, the NHAI can monetise on a build-operate-transfer basis, where a private builder can ask to build it and then reduce the demands on its balance sheet.

According to Livemint, the government has committed to infrastructure spending of ₹100 lakh crore over its five-year term. The NHAI is expected to respond with its views soon.

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