Government of India

Financing of the National Highway Development Programme

Report of the Core Group

Published by The Secretariat for the Committee on Infrastructure Planning Commission, Government of India Yojana Bhawan, Parliament Street New Delhi - 110 001

www.infrastructure.gov.in

Contents
Preface 1. 2. 3. 4. 5. 6. 7. Introduction Assumptions for the Financing Plan Past expenditure and absorption capacity Outlays under different modes of delivery Sources of Financing Financing issues Recommendations 4 6 9 10 11 12 15

List of Annexures

Annexure I Assumptions for the Financing Plan of NHDP Annexure II Cash Flow Statement for Toll Revenue, Maintenance Expenses and servicing of Loan Component of External Assistance Annexure III Statement showing highway section-wise annual toll revenues: year 2004-05 Annexure IV Combined Cash Flow Statement of NHDP-I to VII assuming commitment of cess up to 2029-30 Annexure V A Cash Flow Statement for BOT (Toll) Projects: 2005-06 to 2015-16 Annexure V B Cash Flow Statement (CC, LA, DPR & US): 2005-06 to 2015-16 Annexure V C Cash Flow Statement for BOT (Annuity) Projects: 2005-06 onwards Annexure V D Combined Cash Flow Statement of NHDP-I to VII: 2005-06 to 2015-16

23

28 30 32 36 38 40 42

Secretariat for the Committee on Infrastructure

Preface
This Report outlines the financing plan for a quantum augmentation of the national highway network in India. It responds to the direction of the Committee on Infrastructure, chaired by the Prime Minister, to initiate measures that would upgrade Indian highways to world class standards. The Committee has approved a programme for upgrading 40,000 km of national highways and construction of 1,000 km of new expressways. The programme includes six-laning of the Golden Quadrilateral and other selected sections which have high traffic density. The Committee has directed that scarce budgetary resources may be leveraged through Public Private Partnerships that would also improve the quality of service at competitive costs. A Core Group under the chairmanship of Shri Rajeeva Ratna Shah, Member Secretary, Planning Commission was constituted with representatives from the Prime Minister’s Office, the Department of Road Transport & Highways, Finance Ministry and the National Highways Authority of India (NHAI). After extensive deliberations, the Core Group evolved a plan that represents an optimal and sustainable approach to financing of the National Highway Development Programme (NHDP). To the extent feasible, the plan relies on PPPs for raising resources, improving efficiencies and controlling time and costs. Apart from private capital, resources would be raised from a variety of sources such as cess revenues, market borrowings and toll revenues of projects operated by NHAI. This well-articulated plan should help in ensuring timely and cost-effective implementation of the ambitious highway programme launched by the Government. Since national highways constitute the lifeline of the transport network, and considering a projected GDP growth rate of 8% plus, the scale and quality of these highways would be a critical factor in sustaining the growth momentum. The NHDP envisages a mammoth investment of Rs. 2,20,000 crore (US$ 50 billion) on concessions/contracts to be awarded by 2012 and the financing plan demonstrates the feasibility of this approach. The recommendations of the Core Group have since been approved by the Committee on Infrastructure and implementation has already begun.

(Gajendra Haldea)

Introduction

1.1 The Committee on Infrastructure (CoI) in its third meeting held on January 13, 2005 approved the broad contours of the National Highway Development Programme (NHDP) and mandated that the programme as given in Table 1, be undertaken by 2012. 1.2 In a meeting held on February 17, 2005 under the chairmanship of Principal Secretary to PM, it was decided that the financing plan of NHDP would be examined in detail by a Core Group consisting of: Shri Rajeeva Ratna Shah, Member Secretary, Planning Commission Shri Ashok Jha, Secretary, Department of Economic Affairs Shri L.K. Joshi, Secretary, Department of Road Transport and Highways (DoRTH) Shri Jawed Usmani, Joint Secretary, PMO

1.3 The Core Group co-opted Dr. Adarsh Kishore, Secretary, Expenditure. 1.4 The Core Group met on June 29 and July 29, 2005 to discuss the financing plan of NHDP, as prepared by NHAI. In its meeting held on July 29, 2005, the Core Group constituted the following Sub-Group under the chairmanship of Adviser to Deputy Chairman, Planning Commission to deliberate and submit its recommendations to the Core Group: Shri Gajendra Haldea, Adviser to Deputy Chairman, Planning Commission Shri A.K. Jain, Member (Finance), NHAI Shri Jawed Usmani, Joint Secretary, PMO Shri P.K. Deb, Joint Secretary, Department of Economic Affairs Shri Vivek Rae, Joint Secretary, Expenditure

Table 1: National Highway Development Programme (NHDP)
NHDP Phase NHDP-I & II NHDP-III NHDP-IV NHDP-V NHDP-VI NHDP-VII Total Particulars Balance work of GQ and EW-NS corridors 4-laning 2-laning 6-laning of selected stretches Development of expressways Ring Roads, Bypasses, Grade Separators, Service Roads etc. Length (in km) 9,000 10,000 20,000 5,000 1,000 N.A. 45,000 Indicative Cost (in Rs. crore) 42,000 55,000 25,000 17,500 15,000 15,000 1,69,500

4 • Report of the Core Group

November 3. October 25.6 The Core Group met on December 28. November 9. August 18. The report of the Sub-Group was submitted for consideration of the Core Group. October 1. 2006 to deliberate on the Sub-Group’s report and to finalise its recommendations as contained in this Report.5 The Sub-Group had meetings on August 8. Bahadur. January 30 and February 6. 2005. DoRTH 1.Shri A.P. 1. Chief Engineer (PIC). 2005 to formulate its recommendations. November 14 and November 18. Financing of the National Highway Development Programme • 5 . September 15.

000 20. It would be difficult to fund increased costs without either curtailing the scope of the programme or increasing the toll rates/cess rates. 2. The Group recommended that the review of construction costs and scope of work should be completed expeditiously so that projects can be formulated and sanctioned accordingly. 2. Pending the report of the expert group. Planning Commission. A holistic view would need to be taken regarding the scope of work and its affordability in terms of cess/toll rates.000 crore in January 2006 implying an increase of about 30%.3.738 6.69.500 crore (excluding Rs.757 15.000 *** 23.1 The costs per km have been indicated at Annex-I. *** Length to be covered under NHDP-VII is not shown because specific sections are yet to be identified 6 • Report of the Core Group .Assumptions for the Financing Plan 2.974 NHDP-I (Balance Work) NHDP-II (Balance Work) NHDP-III NHDP-IV NHDP-V NHDP-VI NHDP-VII Total * To be determined based on budgetary resources and the tolling policy for two-lane highways. ** CoI has approved six-laning of 6500 km instead of the 5000 km mandated earlier.2 While adopting provisional cost estimates indicated by NHAI.000 6. 2.3 Modes of delivery 2.280 45. 2.569 1.2. BOT (Annuity) Length under different modes of delivery (in km) BOT (Annuity) CC Total BOT (Toll) 20 1. 1. the cost estimates given by NHAI have been provisionally adopted.1. The Group noted that the estimate of Rs.500 crore for the North East) that was presented to the CoI in January.736 10. However.711 4.500** 1. 2. in a review meeting held under the chairmanship of Deputy Chairman.20.000 7 930 15.500 1.1 For evolving a financing plan.1 The total length proposed to be developed under NHDP has been split into sections to be covered under different modes of delivery viz.1 Assumptions 2. 2005 had been revised to Rs. the Sub-Group adopted a set of assumptions which have been stated at Annex-I. the Core Group noted that project costs were escalating rapidly and there was need to economise with a view to increasing the reach of the programme within Table 2: Coverage under different modes of delivery NHDP Phase the available resources.2 Construction cost 2.000 6. BOT (Toll).2. it was decided that MoSRTH would constitute an expert group to review the costs of construction.000 5.937 6.000* 1.237 10.

2012 and works completed by Dec. NHDP-V has since been approved by CoI and preparatory work has commenced with a view to completing the programme by December 2012. 2.and Construction Contract (CC). 3.000 Ring roads etc.000 Ring roads etc. While NHDP-II is scheduled to be completed by December 2009. NHDP-III is to be completed by December 2012.974* expected to be completed by December 2012. while concessions/contracts for NHDP-IV. 2. 5.2 NHDP-II and NHDP-III are sanctioned as ongoing programmes of NHAI. 2015. These are indicated in Table 2.000 6.3. 5.4.736 4. Projects under this phase will be taken up concurrently throughout the term of the programme.4 Inter-se priority among phases 2. NHDP-VI and NHDP-VII would be awarded by Dec.2 The projections for BOT (Annuity) under NHDP-IV are tentative and may be firmed up based on the tolling policy for two-lane highways to be approved by the Committee on Infrastructure (CoI)/Cabinet and the allocation of additional budgetary resources. 6. 7. NHDP Phase Balance of Phase-I Phase-II Phase-III A Phase-V Phase-III B Phase-VII A Phase-IV A Phase-VII B Phase-VI A Phase-IV B Phase-VII C Phase-VI B Phase-IV C Phase-IV D Total Length (in km) 1. 10.000 45. 14. 4. Present Status Fully awarded Award in progress Already identified 5700 km of GQ 800 km to be identified Already identified To be identified To be identified To be identified Already identified To be identified To be identified To be identified To be identified To be identified Approval Date Dec '00 Dec '03 Mar '05 Nov '05 Mar '06 Dec '06 Dec '06 Dec '07 Dec '07 Dec '07 Dec '08 Dec '08 Dec '08 Dec '09 Completion Date Dec '06 Dec '09 Dec '09 Dec '12 Dec '12 Dec '12 Dec '12 Dec '13 Dec '14 Dec '13 Dec '14 Dec '15 Dec '14 Dec '15 * Total length excludes length under NHDP-VII which has not been estimated yet. 12. 9.000 Ring roads etc. 2. 8. NHDP-III and NHDP-V are Table 3: Priority of different Phases of NHDP Priority 1.738 6. 2. 11.4.500 6. 13. 400 5.000 5. 600 5.1 NHDP-II. Financing of the National Highway Development Programme • 7 .

3 Cabinet approval to NHDP-IV. the Core Group recommends that the various Phases be prioritised as per Table 3.4 Based on the above.4. NHDP-IV would be suitably modified and rescheduled depending upon the toll policy for two-lane highways and overall resource availability for NHDP. In particular.4. 2.2. NHDP-VI and NHDP-VII is yet to be accorded. 8 • Report of the Core Group . These programmes would be taken up under the Eleventh Five Year Plan depending upon resource availability.

422.270 1.728.999 crore (including debt service of Rs. DPRs etc. annuity payments.170 3.27 278.142.67 5. Expressways and Six-laning Internal & Extra Budgetary Resources Total (Rs. Two-laning.466.66 192.206. Financing of the National Highway Development Programme • 9 .58 3.87 6.2 NHAI believes that it may be able to enhance its absorption capacity beyond the projections made in this Report (see Annex-V). land acquisition. The expenditure was largely through item rate construction contracts and indicates NHAI’s capacity to absorb budgetary outlays of about Rs.1 Details of expenditure incurred by NHAI during the past five years are shown in Table 4. Table 5: Allocation for 2005-06 Particulars External Assistance NHAI (Investment) NHDP-III.215.191.Past expenditure and absorption capacity 3.43 200.379.70 * includes viability gap funding.82 22.007. 5. As such.854. 2005 is Rs.59 275.28 6. any significant increase in the annual allocation for the construction contract mode may be avoided so as to preserve the minimum requisite supervision and quality of works.400 8.71 5.500 16. is shown in Table 5. suggesting significant savings compared to the budget estimate (BE).703 crore). Table 4: Past Expenditure by NHAI Year 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 Total Capital* 1.24 4.4 The expenditure incurred up to December 31.08 Expenditure by NHAI Maintenance 143. in crore) Total 1. 5. (Rs.67 1. allocation of additional resources could be considered on a year to year basis by advancing the borrowing limits reserved for subsequent years. 5.000 crore for construction contracts would seem feasible and adequate. 9.000 crore per annum under this mode.000 3.047. in crore) 2005-06 (BE) 3. In such an event.38 3.49 23. However. 3.44 4. annual allocations of about Rs.342.10 5.3 The break-up of funding sources for the plan outlay of 2005-06 as per budgetary estimates.235.

) Length (in km.20.) Length (in km. Cr.000 65.000 crore.623 10.680 45.) Cost (in Rs. therefore.000 km decided earlier in its meeting on 13. the costs of SARDP-NE were projected as Rs.000 16. been revised.500 41.850 4.) Cost (in Rs.800 6.448** 15.811 6.680 9.) Cost (in Rs.210 1. Cr. Cr. 4. with a total estimated cost of Rs.711 8.000 27.3 The financing plan for NHDP does not include the Special Accelerated Road Development Programme for North-East (SARDP-NE).) Cost (in Rs.) Length (in km.064 15.) Length (in km.736 43.1 The phase-wise outlays under different modes of delivery are indicated in Table 6.) Cost (in Rs. In the CoI meeting held on 13.) Length (in km.1.065 10. Cr.000 16.) Length (in km.) Cost (in Rs. 2.500 41.638 23. 12.500 crore.000 65.48.321 BOT (Annuity) 7 85 930** 6. The estimated cost of NHDP-V has.000 6.000 crore. Cr. Cr.757 1. Subsequently. ** To be determined based on budgetary resources and the tolling policy for two-lane highways. but these have since been revised to Rs.738 8.2005.569 29.210 1.20.Outlays under different modes of delivery 4.000 * Length to be covered under NHDP-VII is yet to be finalised.493 2. Provisions of this amount may be considered separately by way of additional budgetary support.680 * 16.232 4.2 CoI has approved six-laning of 6. BOT (Toll) 20 581 1.) Cost (in Rs.594 6.237 8.197 20.974* 2.) Length (in km.280 40.937 31.500 km under NHDP-V instead of 5. 10 • Report of the Core Group . MoSRTH and NHAI have made substantial additions to the scope of work.197 5.447 Total 1. Table 6: Outlays under different modes of delivery NHDP Phase Item NHDP-I (Balance Work) NHDP-II (Balance Work) NHDP-III NHDP-IV NHDP-V NHDP-VI NHDP-VII Total Length (in km.950 6.000** 20.1.145 4. 2.) CC 1.2005. Cr.) Cost (in Rs. Cr.

5. 3. 5. 6. is proposed to be met out of market borrowings. 2 per litre on diesel and petrol has been estimated at Rs.2 Market borrowings would have to be raised against suitable forms of support or back-stopping by the Finance Ministry.1 It was noted that NHDP-I. Given the size and tenure of borrowings.1.1 Revenues from cess 5.3 Additional budgetary support 5. including the payment of annuity. 18 lakh per km has been assumed for GQ and NHDP-II respectively. Financing of the National Highway Development Programme • 11 . based on projected growth in consumption. This may include a commitment that cess revenues at a pre-determined level would be made available to NHAI and may be suitably assigned for debt service. 110 lakh per km in 2005-06 for the Jaipur-Kishangarh section. 30 lakh per km (see Annex-III) and it is Rs.4 Borrowings 5. It was noted that the average toll collection for GQ in 2004-05 was Rs. it would be necessary for the Ministry of Finance to provide the requisite comfort to lenders so that NHAI is able to raise the projected borrowings. 5.2 Surplus from toll revenues 5.4.Sources of Financing 5.691 crore. There is significant scope for additional resource mobilization through better toll recovery. NHDP-II and NHDP-III did not envisage any budgetary support other than cess and external assistance. The projections of net surplus from toll revenues after adjusting maintenance costs and servicing of loan component of external assistance are at Annex-II.1 The cess inflows of Rs. Since the cess revenues would be doubled next year onwards.3.2. the proposed financing plan does not assume any additional budgetary support except for the North East. 50 lakh per km and Rs.270 crore for the year 2005-06 are based on the approved Budget Estimates.1 An average toll revenue of Rs.4. the total inflow calculated @ Rs. 5.1 The shortfall between the inflows from all sources and the projected outflows. The growth rate in cess has been assumed as 3% per annum. For 2006-07.

the basic difference between BOT (Toll) and BOT (Annuity) is that while in case of the former. the traffic/commercial risks are borne by the concessionaire and the investment is sustained . 2000-01 onwards. it was decided that for NHDP Phase-III and onwards. In the former mode.2 Mandate for BOT approach 6. 5.2. in the case of the latter.1 Present Status 6. 2005.Financing issues 6. 12 • Report of the Core Group In a meeting held under the chairmanship of the Prime Minister on March 15. it was agreed that for ensuring provision of better road services. 6. The relevant extracts of the decisions of the said meeting are reproduced below: “As regards the issue of EPC vs. Accordingly. contracts based on BOT model are inherently superior to the traditional EPC contracts.2 The policy framework for toll-based BOT projects was approved by the Cabinet in 1997. i. it was decided that besides awarding contracts under BOT for a total road length of up to 2. However. the creation of NHAI was aimed at commercialising highway projects so that a larger programme could be undertaken on a self-sustaining basis. all contracts for provision of road services would be awarded only on BOT basis (either based on Toll or Annuity or a suitable Toll/Annuity hybrid).” 6. construction. its plans and priorities have been determined mainly by allocation of budgetary resources including cess.2 Briefly stated.1. 476 km were taken up under the BOT (Annuity) mode that would require deferred budgetary payments over 15 years.2. Subsequently.810 km under NHDP-I have been four-laned through item rate construction contracts that were funded entirely out of budgetary allocations. all future programmes/projects would be awarded only on BOT basis. including cess. emphasising the need to shift from construction contracts to the BOT mode of delivery. 2000. While the programme implemented in the past by the Ministry was entirely based on budgetary outlays. with EPC awards being made in specified exceptional cases only. maintenance and tolling form part of the concession and budgetary support is restricted to an upfront grant to the concessionaire determined through competitive bidding. higher quality of construction and maintenance of roads and completion of projects without cost and time overrun. however. in-principle approval of NHDP Phase I & II was given by the Cabinet on April 5.1 As a matter of policy and by law. 2000 followed by CCEA approval of NHDP-I on December 12. NHAI is required to act on business principles. BOT. 6.e.1. contracts were to be awarded to the extent possible on BOT (Toll)/ BOT (Annuity) model. construction and maintenance form part of the concession and the concessionaire relies on annuity payments determined by competitive bidding and made out of budgetary allocations spread over time. The total length of four-laning through tollbased BOT mode (in accordance with the framework specified in 1997) was 454 km.1 There have been several decisions at the level of PM/Cabinet. Under the said approval of NHDP.100 km under NHDP-II. In the past.

2. This is all the more critical because NHAI has virtually no asset base of its own (the highways are owned by GoI) and any liabilities that NHAI fails to discharge would in effect devolve upon GoI.6 The Group further noted that the borrowing limits would have to be specified by the Government in order to determine the broad contours of a financial plan.1 In order to balance the NHAI budget. land acquisition.1 Additional budgetary support may be provided for road projects in the North Eastern Region and for any additional projects undertaken during the Eleventh Plan. BOT (Annuity) option is superior to the construction contract mode.4 Cess revenues 6. all costs are borne by the Government in the form of deferred budgetary payments. As such.270 crore which will be enhanced to Rs. annuity repayments. along with fixing of the borrowing limits of NHAI. BOT (Annuity) offers several advantages over construction contracts. 6.3 In case of projects where tolling is not contemplated. its sources of revenue could be treated on the following lines. The Government may grant a separate tolling contract for annuity projects if it so decides. The remaining cess revenue may continue to be used for ongoing expenditures including construction contracts.3 Balancing the NHAI Budget 6. It is proposed that earmarking of cess may be done for viability gap funding relating to the approved programme of BOT (Toll) projects. In case BOT (Annuity) mode or EPC mode are adopted for projects in NHDP-IV and NHDP-VII. The earmarking would be done annually by the Planning Commission in consultation with MoSRTH and Finance Ministry. 6. 6.691 crore in 2006-07 on account of imposition of additional cess. It would also be necessary to impose a hard budget constraint so that contractual liabilities are incurred within the four corners of fiscal prudence. 6.5 Additional Budgetary Support 6.4 Given the policy directive for adoption of BOT mode on the basis of duly approved model concession agreements (MCAs) for BOT (Toll) and BOT (Annuity).3.5. 6.4. 6. Financing of the National Highway Development Programme • 13 . 6. its revenue streams and expenditures would need to be rationalised. DPR preparation etc.1 As noted earlier. Appropriate packaging of BOT (Annuity) projects can help capture the benefits arising out of allocation of construction and maintenance risks to the concessionaire while minimising the downside associated with comparatively high cost of funds. 6. the cess allocation for 2005-06 is Rs. the Group noted that while the MCA for BOT (Toll) projects was already in place.by toll revenues while in the latter mode.2.2.5 The Group noted that the principles for choosing between BOT (Toll) and BOT (Annuity) would also need to be laid down. For determining the expenditure outlays/ ceilings for NHAI. the MCA for BOT (Annuity) needed to be finalized expeditiously.2. 3.

2005. (c) Postponing construction of paved shoulders on 4-lane highways under NHDP-II and NHDP-IIIA. the funding of Rs. market borrowings and private participation.7. NHAI may also be allowed to raise short term borrowings/ overdraft equal to 20% of its annual budget for meeting its short-term requirements. where traffic volumes are less than 20.000 crore would have to depend on cess revenues.8. and/or (d) Undertaking cost reduction through efficient designing and timely completion.2 In addition to the above.500 crore for North Eastern Region. These costs have since been revised to Rs.000 crore including Rs.1 The programme.1 Toll revenues may be maximised by NHAI and the additional resource mobilisation on this account may be used by NHAI for funding its capital and revenue expenditures. and/or (c) Increasing the rate of cess.3 Cost reduction may be achieved by: (a) Substituting the BOT (Annuity) mode and C.C.6 Market Borrowings 6.000 PCUs. 220.1 Borrowings may be permitted to the extent they can be raised by assigning the toll revenues of NHAI. mode by BOT (Toll) mode.7 Toll Revenues 6.additional budgetary allocations would be necessary. One view was that the borrowing limit should be fixed in a manner whereby the debt service obligations did not exceed 50% of the projected annual cess revenues of NHAI.2 The increased funding requirement would have to be met out of additional resource mobilization or by economising on costs. 172.4.4 While seeking approval for annual borrowing limits. 6.8. 6. it should reschedule the construction programme based on the priorities stated at paragraph 2. such toll revenues could be placed in an escrow account that could be assigned to the lenders. NHAI should update its financing plan and make appropriate adjustments in resources and/or costs for ensuring that all its projects are fully funded. The other view was that the entire cess revenue up to 2029-30 could be committed for debt service. In case of a shortfall. (b) Tolling of two-lane projects under NHDP-IV. 220.000 crore excluding the North Eastern Region. was estimated to cost Rs. . 6. a prudent limit of long-term borrowings may also be approved from year to year for funding current capital expenditures against future cess revenues.8 Revision of Cost Estimates and funding thereof 6.6. NHAI may also establish SPVs for raising non-recourse project debt. While the outlays for North Eastern region would be funded out of additional budgetary support. 6. as approved by CoI 14 • Report of the Core Group on January 13. 2. 6. (b) Improving toll collection.6. Additional resources may be mobilised by: (a) Increasing toll rates.8.8. 6. If necessary. 6.

the order of priority indicated above may be adhered to. 5.000 Ring roads. 5.000 Ring roads.000 5. Bypasses etc. EW) NHDP-III A (BOT-4 lane) NHDP-V (BOT-6 lane) NHDP-III B (BOT-4 lane) NHDP-VII A Phase-IV A (BOT-2 lane) Phase-VII B Phase-VI A (Expressways) Phase-IV B (2 lane) Phase-VII C Phase-VI B (Expressways) Phase-IV C (2-lane) Phase-IV D (2 lane) 7. NHDP-IV. NHDP Phase Length (in km) 1.738 6. so far as may be.In the discharge of its functions under the Act.Recommendations Legislative Mandate 7. 6.500 6. The remaining programmes. The implementation of NHDP-IV would depend upon the resource availability during the Eleventh Plan.000 km each. In making such adjustments.736 4. the Authority shall act. 2. Depending upon the Cabinet decision on tolling for two-laning of national highways. 9. NHDP-III and NHDP-V. 8. on business principles. Prioritisation 7. 7.2 The assumptions used for making financial projections are stated at Annex-I. 11. which reads as follows: “Authority to act on business principles . which in turn would significantly depend upon whether or not these highways are to be tolled. Bypasses etc. 12. 13. Table 7: Priority among different phases of NHDP Order of Priority 1. Financing of the National Highway Development Programme • 15 . 10.1 Steps should be taken to align the outlook and operations of NHAI in line with the legislative mandate to act on business principles.000 km under NHDP-IV should be divided into four parts of 5. the programme size and schedule would need to be suitably adjusted in accordance with the resource availability.. attention is invited to section 10 of the NHAI Act. These may be adopted for purposes of planning and estimation except as stated below.” Assumptions for planning 7.5 The programme of two-laning 20. i. however.000 km is recommended as given in Table 7. focus should be on implementation of NHDP-I.000 6.4 During the remaining period of Tenth Plan. 400 5. 14. 600 5.3 The prioritisation of different phases of implementation comprising over 46.000 Balance Work under NHDP-I NHDP-II (NS. In this context. A detailed project proposal may be formulated offering different alternatives and posing policy issues for decision by the Cabinet. 3. be adjusted to conform to the adjusted financing plan from year to year. NHDPVI and NHDP-VII should be taken up under the Eleventh Plan after they are duly approved by the Cabinet.e. Construction schedule should. 4. 7. NHDP-II.000 Ring Roads. Bypasses etc.

borrow money from any source by the issue of bonds. Government approvals required for borrowings would also have to include annuities. projected in January 2006. with the consent of the Central Government or in accordance with the terms of any general or special authority given to it by the Central Government.69. projected in January.10 Cess revenues cannot be said to belong to NHAI and should not. (2) Subject to such limits as the Central Government may. such amounts as it may require for discharging its functions under this Act.7 The borrowing powers of NHAI are governed by section 21 of the NHAI Act which reads as follows: “Borrowing powers of the Authority(1) The Authority may. from time to time.Unit Costs 7. 16 • Report of the Core Group (3) The Central Government may guarantee in such manner as it thinks fit the repayment of the principal and the payment of interest thereon with respect to the borrowings made by the Authority under sub-section (1).The proceeds of the cess levied under Section 3 shall first be credited to the Consoli- . 7. GoI Approval/Guarantees for borrowings 7. This is particularly relevant as NHAI has no asset base of its own and its toll revenues are rather slender to be able to sustain the required borrowings. 1.8 All borrowings would require prior approval of the Government in accordance with the provisions of the aforesaid Section 21.6 The unit costs and specifications have been adopted provisionally but the Group expressed concern over the revision of costs from Rs. therefore. . As such. 2. The report of the Expert Group may be considered by the Core Group in view of its impact on the Financing Plan. 2000 are relevant and read as follows: “ 4. the Finance Ministry would need to indicate the annual borrowing limit from year to year keeping in view the repaying capacity of NHAI based on its projected cess revenues.500 cr. In this context. Crediting of cess to Consolidated Fund of India. lay down. 2005 to Rs. In consultation with the Planning Commission. debentures or such other instruments as it may deem fit for discharging all or any of its functions under this Act.20. 7. In other words.000 cr.” 7. be pledged by it. the provisions of Section 4 of the Central Road Fund Act. as both require repayments spread over 10-15 years. These will be adjusted on the basis of recommendations to be made by an Expert Group which has since been constituted by MoSRTH.9 The nature of liabilities created by annuities is similar to that of borrowings. borrowing limits to be set for NHAI would include annuity repayments as both would constitute a charge on future cess revenues of NHAI. the Authority may borrow temporarily by way of overdraft or otherwise.

based on back-stopping by the Finance Ministry. According to this view. Given the size and tenure of borrowings. While fixing the annual borrowing limit. This may include a commitment that cess revenues at a pre-determined level would be made available to NHAI and may be suitably assigned for debt service.13 The Group recommends that keeping in view the considerations stated above and in Part 6 of the Report. The other view was imposition of such ad-hoc borrowing limits on that NHAI will become an impediment in programme implementation and. If NHAI were not allowed to borrow. was an acceptable and legitimate way of financing the NHDP. it would have still made sense for GOI to make these investments against GOI borrowings.12 In view of the above. It was also suggested that such borrowings should be allowed only for funding the grant element of PPP projects as that would maximize the leveraging effect. after deducting the expenses of collection. 7. the updated financing plan of NHAI should be kept in view with the objective of ensuring that: (a) all NHAI projects are fully funded. From the point of view of the economy. it would virtually imply a ‘debt trap’ for NHAI and future capital investment would be possible only if the cess rate was increased or additional budgetary 7. Therefore. credit such proceeds to the Fund from time to time. It was pointed that in case the entire cess up to 2029-30 was assigned for debt service. in order to undertake the NHDP as envisaged. the entire cess revenue up to 2029-30 could be committed for debt service. investments in road sector had a high multiplier and were very desirable.14 The proposed market borrowings would have to be raised against suitable forms of support or back-stopping by the Finance Ministry.” related to leveraging of the cess revenue stream for funding the NHDP including the issues raised in a paper titled “Can cess revenues be leveraged?” It was felt that considering the economy was growing at a robust pace of 7% to 8% and traffic on roads was increasing rapidly. if Parliament by appropriation made by law in this behalf so provides. leveraging of cess revenues. for being utilised exclusively for the purposes of this Act. should be so fixed that its annual debt service obligations did not exceed 50% of its projected annual revenues. the investment imperatives more than justified leveraging of cess revenue well beyond the project execution period.dated Fund of India. and the Central Government may. the annual borrowing limit for NHAI may be fixed from year to year by the Finance Ministry in consultation with the Planning Commission.11 The Group discussed various issues resources provided. including annuity repayments. borrowing limits of NHAI. 7. therefore. 7. and (b) the borrowings (including annuity payments) are determined such that they can be serviced out of the projected cess revenues. it would be necessary for the Ministry of Finance to provide the Financing of the National Highway Development Programme • 17 . one of the suggestions made was that as a general rule. NHAI should be allowed to borrow to such limit as is necessary for timebound execution of the programme.

Review and approval of the Tolling Policy 7. 7.15 Further. EPC mode should be relied upon wherever BOT mode is not feasible. the tolling policy was being reviewed. 7.000 km of two-lane roads were proposed to be constructed under NHDP Phase-IV.22 The Group recommends that item rate construction contract mode should be discarded for contracts to be awarded after April 1. 7. The Group further noted that in terms of a CoI decision.requisite comfort to lenders so that NHAI is able to raise the projected borrowings. should be undertaken on BOT (Annuity) mode. an MCA evolved by the IMG would be submitted for approval of CoI. a revenue stream would be available and to that extent. However. then the programme size and schedule would have to be suitably adjusted. In case bids exceed the cap of 40%.16 The Group noted that the extant Cabinet decisions required tolling of all national highways with four-lanes and above. Issues relating to inflation and traffic risks may also be addressed.21 Only those highway projects which are not amenable to BOT (Toll) or BOT (Annuity) approach may be taken up through the EPC mode with competent approvals and after provision of requisite funding.17 It was noted that 20. the project structure would be reviewed by the competent authority for shifting the project from BOT (Toll) to BOT (Annuity) mode along with provision of requisite funding. as necessary. if it were decided that two-laning would not be tolled. Modes of Delivery 7. 7. In the course of such review. the requirement of budgetary support would be reduced. the limit for short-term overdraft facility of NHAI may be fixed at a level equal to 20% of the Annual Budget of NHAI. 7. the current BOT (Annuity) model would need to be reviewed by an IMG which has been constituted by the CoI. If Government decided to toll two-laning of national highways. Following such a review. However. 18 • Report of the Core Group . However. especially a cap of 40% on the grant element.18 The Group identified the following modes of delivery in order of priority: (a) BOT (Toll) (b) BOT (Annuity) (c) EPC (d) Item rate construction contract 7. including projects which are not to be tolled under Government policy. concerns relating to cost effectiveness of this model may be addressed. in terms of Section 21(2).19 All highways which are to be tolled should adhere to the BOT (Toll) mode in accordance with the extant framework approved by CoI/ Cabinet. there was no such decision with respect to twolane highways.20 Highway projects which are not amenable to BOT (Toll) mode. Thereafter. 2006.

12. The outstanding borrowings of NHAI from 2011-12 to 2022-23 would be Rs. 7. 2. 6.000 crore to meet the mismatch between inflows and outflows. establishment expenditure.22 above. The borrowings could rise significantly if the costs are revised upwards.23 Allocation of cess revenues by the Government for funding the annual plan outlays of NHAI may be split into two parts viz. 4. DPR preparation etc.26 The outflows projected at Annex-VA and VB exceed the inflows in certain years. at the end of 2015-16. land acquisition.464 cr. as stated in Table 6. Such borrowings would be well within the limits suggested in paragraph 7. 40. 24. Financing of the National Highway Development Programme • 19 . and (b) EPC. particularly in relation to BOT (Annuity) projects. leaving a surplus of Rs. 48. For meeting any shortfalls under this head. DPRs.000 to Rs. O&M. (b) The remaining cess revenues along with toll revenues and committed external aid may be used for funding CC.000 crore at the end of 2015-16. component. feasibility studies etc. short-term or medium-term borrowings may be allowed subject to overall borrowing limits of NHAI.Earmarking of Cess Revenues for Viability Gap Funding 7. There would be a deficit of Rs. Annex-VB indicates that the estimated expenditure on item rate construction contracts. The net surplus from Annex-VA and VB would be about Rs. NHAI may raise market borrowings that should be serviced out of future revenues under this head. financial projections for NHDP I to VII have been made at Annex-V (A to D). could be funded out of the remaining 50% of cess coupled with toll revenues and committed external aid. The earmarking would be done annually by the Planning Commission in consultation with MoSRTH. land acquisition. which relies on the assumptions at Annex-I. If this package is adopted. all cess revenues likely to be received up to 2029-30 would have to be assigned/ pledged for debt service and payment of annuities. along with fixing of the borrowing limits of NHAI. can be fully funded out of 50% of cess revenues.458 crore at the end of 2015-16.24 Based on the assumptions specified in Annex-I.25 As an alternative scenario and based on the allocation of budgetary resources suggested in paragraph 7. the financial projections and cash flows have been tabulated in Annex-IV. These two components may be treated on the following lines: (a) A part of the cess revenues from 2006-07 onwards may be earmarked and put under a separate budget head for PPP to be used only for meeting the viability gap requirements of BOT (Toll) projects. Projections at Annex-VA suggest that the proposed BOT (Toll) programme. 7. NHAI may have to borrow up to Rs. O&M and Misc. Financial Projections 7. and Finance Ministry. (a) PPP component. For meeting any gaps in funding.000 crore.

the total capital investment of about Rs.7.000 cr.30 All new programmes or projects not included in this Report. and thus creating space for additional projects. if these projects were undertaken through the BOT (Toll) mode. such as those for the North Eastern Region. (b) Private investment. To the extent tolling is exempted or in the event of non-responsive bidding. However. the above recommendations governing the financing plan of NHAI may be reviewed and approved by CoI/ Cabinet.29 In sum. . if the proposed annuity programme were implemented. Annex-VD suggests that NHAI would be left with an outstanding debt of about Rs.27 NHAI believes that it may be able to enhance its absorption capacity beyond the projections made in Annex-VA and VB. leaving no outstanding liability in 2016-17. indicated in paragraph 7. (c) Toll revenues.000 crore at the end of 2015-16 (see Annex-VC). without compromising on quality. pre-supposes that two-laning under NHDP-IV would be tolled.000 cr. 7. 77. and (d) Borrowings and annuity payments to be determined by the repaying capacity of NHAI. 7. should be supported out of additional budgetary allocations to be provided by the Planning Commission from time to time. 28.31 In order to instill financial discipline and for adherence to business principles. projects may have to be taken up through BOT (Annuity) or EPC mode requiring additional funding. This outlay can be met out of the projected surplus of Rs.28 Annex-VC contains the projections for the BOT (Annuity) programme. (see Annex-VC) would not require more than Rs. In such an event. the financing requirements would increase correspondingly. This. any significant increase in the annual allocation for the construction contract mode may be avoided so as to preserve the minimum requisite supervision and quality of works. 47.000 cr. 8. allocation of additional resources could be considered on a year to year basis by advancing the borrowing limits reserved for subsequent years. as provisionally included in Table 6.730 crore). Additional Programmes to be based on GBS 7. On the other hand. of Government funding even if 40% viability gap were assumed. This would require significantly enhanced borrowing limits and budgetary allocations that would imply pledging of all cess revenues up to 2029-30.000 crore and balance annuity payments of over Rs. Hard Budget Constraint 7. and (ii) costs are controlled.11.2.25 and the cess revenue for 2015-16 (Rs. however. the entire programme under NHDP-I to VII would be financiable out of cess revenues realised up to 2015-16 if (i) BOT (Toll) approach is relied upon for all future projects including two-laning under NHDP-IV. The financing of NHAI expenditure should be clearly circumscribed by the following: (a) Budgetary support equal to cess revenues (since doubled). To the extent Government decides not to toll 20 • Report of the Core Group such highways.

7. annuity payments etc. The division of cess revenues between (a) viability gap funding for PPPs and (b) expenditure on construction contracts. Financing of the National Highway Development Programme • 21 .32 In particular. the manner and extent of liabilities that NHAI would be permitted to incur in the form of borrowings and/ or annuity payments may be specified on the above lines and restricted to the funds available. may also be reviewed and approved. NHAI should have the freedom to raise resources and implement its plans.33 Based on the above recommendations and within the four corners thereof. 7.

Annexures I .V D 22 • Report of the Core Group .

DPR.28 5.1 After detailed discussions. Toll Collection under Phase-I has been considered as per Schedule of completion of projects and up to one year after award of six-laning projects under Phase-V. the O&M costs have been considered only on highways not awarded on BOT basis. 1.18 lakhs per km per annum on NHDP-II.5. the total inflow from Cess levied @ Rs.4 Cess 1.52 1.11 0.6.34 16. 1. As such.5 Toll 1. pre-construction activities Total Rs. 1.3.07 6.67 0. for NHDP-III.56 1.39 6.1 The cess inflows of Rs.811 crore required for balance 1.68 5.00 and NHDP-VII the cost of maintenance has not been included.1 The maintenance cost for four-lane highways under NHDP-I and NHDP-II has been estimated as Rs.1 The costs per km have been assumed as follows: NHDP Land Acquisition. 1.10 lakh per km per year including periodic maintenance considered on annualized basis. NHDP-IV.691 crore.4.68 1.2 The growth rate of toll revenue has been assumed as 5% per annum on account of traffic growth.3. per annum on NHDP-I and Rs. 1. General assumptions 1.67 0.4 The inflow of cess has been assumed up to 2029-30.78 15.2. 1. it was decided to assume toll collection at the rate of Rs.1 Constant Prices 1. 1.5.4. 3.1.2 Construction Cost 1. 1.2 per litre on diesel and petrol has been considered as Rs. toll rates.52 6. NHDP-V.5.1 All estimates in the financing plan including cost of construction. NHDP-VI . 50 lakhs per km. would be based on constant prices as on 1.270 crore for the year 2005-06 are based on the approved Budget Estimates.4. in crore) Phase I Phase-II Phase-III Phase-IV Phase-V Phase-VI 5.3 NHDP-IV has been split into four phases.3 The growth rate in inflows from cess has been assumed as 3% per annum.Annexure I Assumptions for the Financing Plan of NHDP 1.738 km 0. 1.2 For 2006-07. based on projected consumption growth of diesel and petrol. maintenance cost etc.3 Operation & Maintenance (O&M) Cost 1.2 In working out the financing plan.1.2006.85 5. 8.85 1. Accordingly in framing the financing Financing of the National Highway Development Programme • 23 Construction Total Costs (Rs.4.

2. 2.7 Annuity 1. this was on the higher side and there was scope for economy.7. 2.2006.1.06 to 31.06) has been kept as per the revised expenditure estimates of NHAI.000 km.3 The land acquisition and DPR cost has been spread over the year of award and the subsequent year in the ratio 25:75.4 In case of highway length completed under construction contracts (NHAI funded projects).7.1 In respect of annuity projects. has been taken as Rs. expenditure is apportioned based on expected date of completion. 1.1 The cost of execution for the balance period (2006-07 onwards) has been assessed based on the balance expenditure remaining against the approved cost of Phase-I up to 31.plan.1.6. 1. (including direct loan from ADB for SuratManor project) has been considered in the cash flows. 2.2. it has been assumed that a length of 5. per km though the Core Group felt that considering the initial estimate of Rs.03.1.06) has been kept as per the revised expenditure estimates by NHAI.2. For remaining years.1.1.1 NHDP Phase-I 2. the deficit between the estimated expenditure under Phase-I to Phase-VII (including the payment of annuities and servicing of interest on market borrowings) and receipts.0. 1.6. NHDP Phase-specific assumptions 2.5. per km.2 The interest on market borrowings has been calculated @ 9% on annualised basis.e. The construction cost per km has been taken as Rs.2 The term of the annuity has been assumed as 15 years in accordance with the current practice.2. the construction cost is spread over 2..6 Market Borrowings 1. would be taken up for two-laning under NHDP-IV A on BOT (Toll) basis.1 Market borrowings have been considered on net requirement basis i.85 crore at constant prices on 1.67 cr.03. 2.2.2 NHDP Phase-II 2.1 The balance expenditure for 2005-06 (from 1. will depend on the overall tolling policy that the Government may adopt.2005.0. This.2 The cost for preparation of DPR.3 The net surplus/deficit of toll collection over the expenditure on maintenance of the stretches on which toll has been collected and on interest & repayment of loan component of external assistance provided by the Govt.2 The balance expenditure for 2005-06 (from 01. however. IRR has been considered @ 15% per annum for the purpose of calculation of annuity payments. 1.12. 2.06 to 31. land acquisition and utility shifting etc.01. 24 • Report of the Core Group .36 cr.

000 km programme.000 km be divided into four parts: (a) Part-A: 5000 km: Award on BOT (Toll) basis with 35% average viability gap funding subject to Cabinet approval for tolling two-lane highways.1. 2.2. The grant has been spread over three years in the ratio 0:25:75.2006 for the 20. (including direct loan from ADB for SuratManor project) has been considered in the cash flows.4. (b) Part-B. 2.3.6 The land acquisition and DPR cost has been spread over the year of award and the subsequent year in the ratio 25:75. 2. 1. 2.already approved by the CCEA (b) Part-B: 6000 km. The grant is spread over three years in the ratio 0:25:75. subject to Cabinet approval for annuity projects and provision of additional budgetary support. 2. LA/ Utility shifting etc.four years ending in the planned year of completion in the ratio 10%:30%:40%:20%.1 It is recommended that the proposed length of 20.4 The cost of DPR.4 NHDP Phase-IV 2.4. 2. 2. is to be awarded on BOT (Toll) basis.5 In the case of highway length under BOT Projects.85 crore for the 10000 km programme at constant prices on 1. Part-C and Part-D each of 5000 km: Award on BOT (Annuity) basis.3.3. 2.2 The construction cost per km has been taken as Rs. This has been divided into two parts as under: (a) Part-A: 4000 km.67 crore per km though there was scope for economy considering that BOT projects would require only a feasibility report and not a DPR. Maximum viability gap funding in selected cases can go up to 40% of the project cost.3. 2nd and 3rd years in the ratio 20%:40%:40% respectively.6 The annuity cash flows have been assessed at an IRR of 15% per annum spread over 15 years after the construction period of 3 years. The maximum in selected cases can go up to 40% of the project cost. the construction cost is spread over three years ending in the planned year of completion in the ratio 20%:40%:40% assuming completion of construction in 3 years.3.1 The proposed length of 10.5. 0.000 km.3. has been tentatively taken as Rs.3 The construction cost per km has been taken as Rs.5 The construction cost has been spread during 1st.2.1.28 crore at constant prices on 1.2. Financing of the National Highway Development Programme • 25 .in-principle approval of CCEA has already been accorded 2. 2. 2.2006.3 NHDP Phase-III 2.2 The average viability gap funding has been assumed as 30% of the project cost.7 The net surplus/deficit of toll collection over the expenditure on maintenance of the stretches on which the toll has been collected and on interest & repayment of loan component of external assistance provided by the Govt.

2nd and 3rd years of execution in the ratio 20%:40%:40% respectively.4. 2.2006 for the 1.5. 2.Toll basis has been assumed. has been tentatively taken as Rs. .6. per km and there was scope for reduction in costs.1.6.6 The annuity cash flows have been assessed at an IRR of 15% per annum spread over 15 years after the construction period of 3 years.3 The cost of DPR & LA/Utility shifting etc.15 crore at constant prices on 1. per km.6.78 crore at constant prices on 1. The grant has been spread over four years in the ratio of 0%:25%:25%:50%.2.5.4.500 km programme. The grant has been spread over three years in the ratio 0:25:75.5 NHDP Phase-V 2.11 crore per km.000 km.3 The construction cost per km has been taken as Rs.2 The viability gap funding has been assumed as 40% of the construction cost.6.4 The construction cost has been spread over the 1st. In individual cases. 2.5 The land acquisition and DPR cost has been spread over the year of award and the subsequent year in the ratio 25:75. has been taken as Rs. 2.3 The cost of LA/ Utility shifting etc.30 cr.0. 2.5 The construction cost has been spread over five years period of execution in the ratio 10%:20%:20%:25%:25% respectively. 2. 2. 3. 2nd and 3rd years of execution in the ratio 20%:40%:40% respectively.5 The land acquisition and DPR cost has been spread over the year of award and the subsequent year in the ratio 25:75. 2.1.0.000 km to be constructed on BOT (Toll) basis be divided into two parts as under: (a) Part-A: 400 km-stretch identified (Vadodara-Mumbai Section) (b) Part-B: 600 km.stretches to be identified 2. 2. the grant has been spread over three years in the ratio 0:25:75. 2. the maximum VGF may go up to 10%.20 cr.5.4 The cost of DPR & LA/utility shifting has been taken as Rs.2 The construction cost per km has been tentatively taken as Rs.1.4.68 crore per km.56 cr. 2.5.6.1 The average viability gap funding of 5% of the project cost for award on BOT. This was quite high considering the initial estimate of Rs.000 km programme.5.2006 for 6.6 NHDP Phase-VI 2.5. 2. 0.1 It is recommended that the proposed length of 1. In respect of BOT (Toll) projects under Part A for 5.4.4 The construction cost has been spread over the 1st. per km as compared to the initial projection of Rs. The Group felt that there was scope for cost reduction because BOT 26 • Report of the Core Group projects would require only a feasibility report and not a DPR.

784 crore.100 crore) would be done on BOT. 7.7. 16.5 Out of total cost of Rs. The contribution by the Private Sector is Rs. because the length of ring road.6 The DPR cost has been spread over the year of award and the subsequent year in the ratio 25:75.2 The construction of major Bypasses (each costing more than Rs.7.3 The work under this Phase will proceed concurrently throughout the period of NHDP Programme.7. Financing of the National Highway Development Programme • 27 . 3.1. 2. 16. LA.Annuity basis.7.2.Toll basis with average viability gap funding of 40% of the construction cost. 2. bypasses and flyovers is still being worked out. the cost of DPR.6. 2.7.2006 prices) has been made for this phase.1 The construction of Ring Roads would be done on BOT.7 NHDP Phase-VII 2. 2.892 crore. 2.680 crore (at 1.680 crore. RR and Utility Shifting amounts to Rs.4 A consolidated cost assumption of Rs.

2025 2025 .2013 2013 .50 crores per km in Phase-I. growth on a/c of traffic.2028 2028 .0.2030 2030 .18 crores per km in Phase-II with 5% p.2010 2010 .2019 2019 .2011 2011 . on annualised basis (including the routine maintenance @ Rs.04 crore per km pa + cost of HTMS & other equipments @Rs. total amount of maintenance exp.2017 2017 . & total amount of int.2029 2029 . Maintenance Expenses and Servicing of Loan Component of External Assistance Servicing & Repayment of Loan against EA Phase-I Servicing & Repayment of ADB Loan for Surat-Manor SubSubTotal Interest Principal Total 6C 7A 7B 7C 34 34 33 32 32 31 30 29 28 27 25 24 22 20 19 16 14 11 9 5 2 0 0 0 0 0 477 6 13 14 16 17 19 21 23 25 28 31 34 38 41 46 50 56 61 67 74 40 0 0 0 0 0 721 40 46 47 48 49 50 51 52 53 55 56 58 60 62 64 67 70 73 76 80 42 0 0 0 0 0 1198 Year 1 2005 .2008 2008 . ii) Length has been taken based on the quarter-wise completion schedule iii) Toll has been considered on the completed length excluding the length under BOT(T) iv) Toll has been considered @ Rs.0.335 521 -281 -263 -245 -197 -155 -70 -71 -72 -73 -75 -76 -78 -81 -83 -86 -42 2437 - 2012 .a.0. @ Rs.023 1.2012 Opening Length Balance in km 2 3 -345 3827 5173 5164 3794 1794 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -345 0 MaintToll enance Revenue Exp.2020 2020 .2022 2022 . 28 • Report of the Core Group . v) Maintenance has been considered @Rs.10 crores per km.04 crore.0.2023 2023 .0.2018 2018 . & repayment of loan component up to 2004-05.2026 2026 . Interest Principal 4 5 6A 6B 773 1894 2677 2031 999 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 8374 383 517 516 379 179 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1975 186 167 148 129 110 91 72 53 34 19 8 7 6 6 5 4 3 2 2 1 0 0 0 0 0 0 1049 140 140 140 140 140 140 140 140 110 81 6 6 6 6 6 6 6 6 6 6 0 0 0 0 0 0 1370 326 307 288 269 250 231 212 193 144 100 14 13 12 11 10 10 9 8 7 6 0 0 0 0 0 0 Total Net Surplus Outflows 8 9 748 871 851 696 478 281 263 245 197 155 70 71 72 73 75 76 78 81 83 86 42 0 0 0 0 0 5592 -320 1.2009 2009 .2015 2015 .826 1.02 crores per km + periodic maintenance on annualised basis @ Rs.2007 2007 .0.2024 2024 .2006 2006 .2014 2014 .2016 2016 .2027 2027 .2031 Total 2419 Assumptions: i) Opening balance has been worked out based on the net of the total amount of toll collection.2021 2021 .Annexure II Cash Flow Statement for Toll Revenue.

For the estimated loan funds to be received against phase-I & phase-II interest rate has been considered @ 13.2006 to 01.521 1.a.438 1.069 1. vii) Repayment of loan component of EA under phase-I has been considered in the specified number of installments given in the approval letter of the funds received so far.991 2.519 1.195 11421 37844 vi) Interest on loan component of EA under phase-I has been calculated on the reducing balance as per simple int. Repayment of loan has been considered in 6 monthly installments starting from 01.806 1. For the estimated loan funds to be received against phase-I & phase-II the repayment has been considered in 10 equal annual instalments based on the latest approval letter.939 2.028 1. 12 5 - 1696 4176 5499 40 307 1.195 893 1.7% Financing of the National Highway Development Programme • 29 .134 1.091 27515 2.474 2.532 1.257 1.378 1.080 1.181 1.759 1. on simple interest basis on reducing balance. in crore) Phase-II Servicing & Repayment of External Assistance Interest 13A 4 33 Principal 13B 3 25 99 123 152 152 152 152 152 149 127 29 0 0 0 0 0 0 0 0 0 0 0 1522 0 53 152 SubTotal 13C 7 58 Total Outflows 14 7 63 Net Surplus 15 -7 -59 Net Surplus carried over to main Cash Flow Statement 16 -327 964 952 26 546 Length in km 10 0 50 Toll Revenue 11 4 - Maintenance Exp.846 1.348 1.(Rs.091 25078 2.678 1.991 2.137 2.01.5% p.720 1.2025 as per the repayment schedule. viii)The Loan amount of ADB is taken as US$ 165 million against the orignal amount of US$ 180 million.896 1.263 1.357 2.177 1.447 1.806 1.190 1.103 1.07.618 1.595 1.728 767 170 418 418 418 418 418 418 418 418 418 418 418 418 418 418 418 418 418 438 460 483 508 10114 533 418 129 149 151 131 110 90 69 48 28 11 4 0 0 0 0 0 0 0 0 0 0 0 0 1130 172 228 272 303 283 242 221 198 155 33 0 0 0 0 0 0 0 0 0 0 0 0 2652 65 324 398 690 741 721 700 659 639 615 573 450 418 418 418 418 418 418 418 438 460 483 508 12766 533 482 680 -358 -383 307 379 531 611 697 805 965 454 26 1. rate given in the approval letter of the funds received so far.468 262 116 334 456 627 734 995 209 1.312 1.036 2. Intertest has been calculated @4.896 1.250 1.429 1.598 2.675 1.244 2.341 1.

05 9.05 5.Adda-Panagarh Bhubaneswar-Cuttack-Jagatpur Ankapalli -Vishakhapatnam Chilkaluripet-Vijayawada Vijayawada-Gundugolanu(31/8Km) Vijayawada-Gundugolanu(53/3Km) Panipat-Ambala Ambala-Khanna Khanna-Jalandhar Samakhayali.Annexure III Statement showing highway section-wise annual toll revenues: Year 2004-05 SNo NH Name of the section Date of start of collection during 04-05 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 8 8 8 8 8 8 8 79 79&79 A 4 4 2 2 2 5 5 5 5 5 1 1 1 8A 6 24 45 Gurgaon-Kotputli Kotputli-Jaipur Bypass Ratanpur-Himatnagar Vadodara-Bharuch Bharuch-Surat Kajali-Manor Manor.7.05 21.05 23.Dahisar Bhilwara-Chittorgarh Kishangarh-Bhilwara Belgam-Maharastra Border Satara-Khandala Badarpur-Kosi Kosi-Agra Barwa.02.04 30 • Report of the Core Group .03.Gandhidham Amravati Bypass Ghaziabad-Hapur & Hapur Bypass Chennai Bypass Total 21.02.03.

64 15. in crore) Length (in kms) 120.40 22.19 0.97 25.19 6.16 19.100 90.21 537.20 26.28 12.83 5.24 0.48 0.170 1763.18 0.40 3.97 25.34 0.00 26.13 0.20 42.45 0.47 17.000 39.21 18.93 10.75 Annualised collection per km 0.240 47.000 82.67 705.54 20.820 83.21 18.21 445.53 10.04 46.50 48.41 Financing of the National Highway Development Programme • 31 .26 0.40 3.56 13.53 15.900 101.22 0.000 56.96 25.30 Annual income as per assumed rates of Rs. per year 48.64 44.000 65.000 100.19 6.85 3.27 0.67 52.46 27.27 0.800 40.41 26.200 54.93 33.07 28.54 20.66 4.70 28.69 1.93 10.160 17.000 66.08 0.74 18.20 15.528 Annual income 41.000 57.36 0.707 83.76 34.245 19.17 0.59 11.500 106.36 26.33 0.00 22.18 3.29 0.41 0.40 lacs/km.00 12.12 16.28 12.36 26.46 27.20 33.41 26.80 36.09 7.06 17.28 33.90 7.56 13.02 Annualised collection 41.(Rs.14 10.50 48.40 40.100 39.10 18.100 110.400 63.100 116.14 10.25 0.48 21.500 32.48 0.00 22.16 40.09 9.000 90.21 0.04 36.27 0.66 4.53 10.43 0.000 55.34 0.31 0.486 27.22 0.74 18.46 7.83 5.85 29.67 52.34 0.19 0.

2020 2020 .2013 2013 .2024 2024 .2006 2006 .2026 2026 .Annexure IV Combined Cash Flow Statement for NHDP Phase I to VII assuming commitment of cess up to 2029-30: Inflows Year Opening Balance Cess Net Surplus from Toll Collection -327 964 1468 952 546 26 116 209 334 456 627 734 893 995 1103 1181 1263 1348 1438 1532 1678 1806 1896 1991 2091 2195 233618 27515 700 1973 666 7459 9776 Inflows (including Borrowing) Budgetery Support for LA/DPR EA Phase-I Share of Private Sector 520 146 Phase-II Share of Private Sector Ph-IV 83 602 3865 3213 2012 EA 2005 .2019 2019 .2025 2025 .2010 2010 .2008 2008 .2014 2014 .2021 2021 .2023 2023 .2009 2009 .2029 2029 .2030 2030 .2011 2011.2022 2022 .2031 Total 2957 3270 6691 6892 7098 7311 7531 7757 7989 8229 8476 8730 8992 9262 9540 9826 10121 10424 10737 11059 11391 11733 12085 12447 12821 13205 700 1900 73 1100 1905 2236 1894 324 9080 32 • Report of the Core Group .2007 2007 .2018 2018 .2016 2016 .2012 2012 .2017 2017 .2027 2027 .2015 2015 .2028 2028 .

(Rs. in crore) Phase-III Share of Private Sector [Pt-A&B] 0 1360 4320 6780 8489 8160 6654 4168 1020 Phase IV Share of Private Sector 0 0 0 0 270 1633 4369 6207 5760 3840 1280 Phase V Share of Private Sector 0 135 3745 8165 10658 7989 3844 1156 Inflows (including Borrowing) Phase VI Share of Private Sector 0 0 0 0 0 270 1170 1800 1935 2250 1575 846 477 124 Phase VII Share of Private Sector 0 0 133 467 2002 2068 1779 1334 Borrowing (Term Loans & Bonds etc) Total Inflows 2418 -932 8875 9418 9801 7291 6229 3209 4 743 12620 10943 31535 37988 41412 34969 31917 26072 17282 15764 12212 10572 10631 10659 10929 11302 11687 12085 12497 12923 13411 13891 14343 14812 15296 11275 40950 23360 35691 9000 7784 48503 Financing of the National Highway Development Programme • 33 .

2022 2022 .1. 34 • Report of the Core Group .2029 2029 .2010 2010 .2.2018 2018 .2020 2020 .97.2009 2009 .2014 2014 .2024 2024 .2012 2012 .750 crore on Dec.2031 Total Note:.2% was agreed to for updating this cost to Dec.2019 2019 . 04 prices. 05 level which works out to Rs.2027 2027 .2023 2023 .2016 2016 .2025 2025 .19.20.640 crore or say Rs..2006 2006 .2026 2026 ..2.2011 2011 .2028 2028 .000 crore. cement and steel prices during the year and escalation of 11.Combined Cash Flow Statement for NHDP Phase I to VII assuming commitment of cess up to 2029-30: Outflows Year Total Phase-I Inflows Balance Balance (from *Exp( by *Exp (by page 33) NHAI) Private Sector) 12620 10943 31535 37988 41412 34969 31917 26072 17282 15764 12212 10572 10631 10659 10929 11302 11687 12085 12497 12923 13411 13891 14343 14812 15296 11275 8145 666 33846 9776 24247 40950 4440 23360 5519 35691 3380 1384 1735 1646 520 146 Utilisation Phase-II Phase-III Phase IV Balance Balance *Exp *Exp *Exp *Exp *Exp (by *Exp (by (Part-A) (Part-A) (by (by NHAI) Private (by NHAI) (by Private NHAI) Private Sector) Sector) Sector) 2117 5498 11025 7594 5943 1670 83 602 3865 3213 2012 58 1000 3748 4717 4121 4851 4107 1645 0 1360 4320 6780 8489 8160 6654 4168 1020 0 5 78 325 696 1080 1447 810 0 0 0 0 270 1633 4370 6207 5760 3840 1280 Phase-V *Exp *Exp (by (by NHAI) Private Sector) 5 65 1172 1407 1438 544 774 114 0 135 3745 8165 10658 7989 3844 1156 2005 .2030 2030 .2007 2007 .2013 2013 .The estimated expenditure for Phase-I to VII based on revised costs agreed to by the Core Group was Rs.2008 2008 .2021 2021 .2017 2017 .2015 2015 . In view of high rise in bitumen.

in crore) Phase-VI *Exp *Exp (by (by NHAI) Private Sector) 0 0 1 172 489 618 851 1500 1950 2100 0 0 0 0 0 0 270 1170 1800 1935 2250 1575 Phase-VII *Exp *Exp (by (by NHAI) Private Sector) 0 0 667 1668 2632 1297 1353 1131 148 0 0 133 467 2002 2068 1779 1334 Utilisation Payment of Annuity Repayment of Borrowings Interest on Borrowings @ 9% annualised 299 168 512 1300 2127 2863 3445 3850 3988 4020 425 4034 4052 4109 4135 296 1314 1835 2417 3064 3785 6070 7318 8674 10056 3250 4128 4059 3923 3740 3504 3209 2785 2208 1519 713 Total Outflows Cumulative outstanding balance of borrowings 2418 1486 10362 19780 29581 36872 43101 46310 46314 47056 46632 47478 47955 48079 47782 46468 44633 42217 39152 35367 29298 21979 13305 3250 576 576 576 576 576 1948 2140 2354 2461 3538 4898 6504 6504 6504 6504 5929 5929 5929 5929 5929 4556 4364 4150 4043 2966 1606 5593 12631 10938 31577 38029 41451 34991 31932 26069 17262 15748 12212 10556 10613 10639 10929 11302 11687 12085 12497 12923 13411 13891 14343 14812 6216 1606 7680 9000 8896 7784 97566 54097 68689 *Exp = Expenditure Financing of the National Highway Development Programme • 35 .(Rs.

2012 2012 .Annexure V A Cash Flow Statement for BOT (TOLL) Projects : 2005-06 to 2015-16 Year 50% Cess Phase-I 2005 .2011 2011 .2009 2009 .2010 2010 .2007 2007 .2013 2013 .2016 Total 1635 3346 3446 3550 3656 3766 3879 3995 4115 4239 4366 39993 581 4335 40951 4160 35692 435 146 Phase-II 83 602 1689 1284 677 Inflows Investment by Private Sector Phase-III 0 1360 4320 6780 8489 8160 6654 4168 1020 Phase IV 0 0 0 0 416 1248 1664 832 Phase V 0 135 3745 8165 10658 7989 3844 1156 Phase VI 0 0 0 0 0 270 1170 1800 1935 2250 1575 9000 4448 Phase VII 0 0 0 0 1112 1112 1112 1112 2153 5588 13200 19779 25008 22545 18323 13063 7070 6489 5941 139159 Total 36 • Report of the Core Group .2015 2015 .2014 2014 .2006 2006 .2008 2008 .

(Rs. in crore) Outflows (Utilisation) Viability Gap Funding by NHAI Phase-II 5 324 1305 1173 88 Phase-III 0 532 1707 3077 3750 3510 3330 1645 Phase IV 0 0 280 1120 840 Phase-V 0 2 52 287 598 544 347 49 Phase-VI 0 450 1500 1950 2100 Phase-VII 0 0 0 0 741 741 741 741 Capital Expenditure by Private Sector 518 2242 9754 16229 21352 18779 14444 9068 2955 2250 1575 2895 17551 2240 1879 6000 2964 99166 Total Surplus Cumulative Surplus 1630 4118 4500 3513 1993 684 -1426 -2206 -41 2098 6464 523 3101 12818 20766 26528 23854 20432 13843 4905 4350 1575 132695 1630 2488 382 -987 -1520 -1309 -2109 -780 2165 2139 4366 6464 Financing of the National Highway Development Programme • 37 .

2016 Total 1635 3346 3446 3550 3656 3766 3879 3995 4115 4239 4366 39993 38 • Report of the Core Group .2006 2006 .2009 2009 .2015 2015 .2007 2007 .2011 2011 .2008 2008 . 50 468 2041 2425 1713 2005 .LA/DPR & US : 2005-06 to 2015-16 Year 50% Cess Inflows Net Surplus from Toll Collection -327 964 1468 952 546 26 116 209 334 456 627 5371 1973 7459 EA Phase-I 1900 73 Phase-II 1100 1905 2236 1894 324 4307 6288 7150 6396 4526 3792 3995 4204 4449 4695 4993 54795 8145 30962 6697 3380 1384 1735 1646 2112 5174 9720 6421 5855 1680 Total Phase-I Phase-II Phase-III LA/DPR.2013 2013 . etc.2012 2012 .Annexure V B Cash Flow Statement for CC.2010 2010 .2014 2014 .

etc. 0 0 667 1668 1890 556 612 389 148 5547 7094 15362 13776 11338 3826 1550 614 148 0 0 59254 -1239 -806 -8211 -7380 -6811 -34 2445 3590 4301 4695 4993 -4458 Total Surplus Cumulative Surplus -1239 -2045 -10256 -17637 -24448 -24482 -22036 -18447 -14146 -9451 -4458 Financing of the National Highway Development Programme • 39 . etc. 5 63 1120 1120 840 427 65 0 Phase-VI LA/DPR. etc. 0 5 78 325 550 545 473 225 LA/DPR. in crore) Outflows (Expenditure by NHAI) Phase-V Phase IV LA/DPR.(Rs. etc. 0 0 1 172 489 618 401 0 0 0 0 2200 3640 1680 5930 Phase-VII LA/DPR.

2028 2028 .2023 2023 .2031 Total 85 5440 19200 3335 28060 Phase-I 85 Phase-II 247 1335 2176 1682 Investments by Private Sector Phase IV 0 0 0 0 0 640 2560 5120 5760 3840 1280 Phase VII 0 0 133 467 890 956 667 222 Total 332 1335 2309 2149 890 1596 3227 5342 5760 3840 1280 40 • Report of the Core Group .2011 2011 .2021 2021 .2010 2010 .2018 2018 .2030 2030 .2013 2013 .2025 2025 .2016 2016 .2008 2008 .2014 2014 .2029 2029 .2017 2017 .Annexure V C Cash Flow Statement for BOT (Annuity) Projects: 2005-06 onwards Year 2005 .2009 2009 .2022 2022 .2020 2020 .2007 2007 .2019 2019 .2027 2027 .2015 2015 .2026 2026 .2006 2006 .2024 2024 .2012 2012 .

(Rs. in crore) Phase-I 576 576 576 576 576 576 576 576 576 576 576 576 576 576 576 Phase-II 0 0 0 0 0 1244 1244 1244 1244 1244 1244 1244 1244 1244 1244 1244 1244 1244 1244 1244 Payment of Annuity by NHAI Phase IV 0 0 0 0 0 0 0 0 0 1077 2437 4043 4043 4043 4043 4043 4043 4043 4043 4043 4043 4043 4043 4043 2966 1606 8635 18660 60648 9624 Phase-VII 0 0 0 0 0 128 321 535 642 642 642 642 642 642 642 642 642 642 642 642 513 321 107 Total 576 576 576 576 576 1948 2140 2354 2461 3538 4898 6504 6504 6504 6504 5929 5929 5929 5929 5929 4556 4364 4150 4043 2966 1606 97567 Cumulative Payment of Annuity 576 1151 1727 2303 2878 4826 6967 9321 11782 15321 20219 26723 33227 39732 46236 52165 58094 64022 69951 75880 80436 84800 88950 92993 95960 97566 Financing of the National Highway Development Programme • 41 .

2015 2015 . 42 • Report of the Core Group .77.2014 2014 .5593 crore between the borrowings shown under inflows and the repayments of borrowings shown under outflows is due to the borrowings which were made prior to 2005-06 and which is due for repayment in 2005-06.2013 2013 .2008 2008 .2006 2006 .2010 2010 .2016 Total 2957 Note:* Balance Annuity Payments between 2016-17 and 2030-31 : Rs.347 crore. ** The difference of Rs.2009 2009 .2007 2007 .Annexure V D Combined Cash Flow Statement for NHDP Phase I to VII from 2005-06 to 2015-16 Inflows (including borrowings) Year Opening Balance Annex V A (BOT-Toll) 1630 2488 382 -987 -1520 -1309 -2109 -780 2165 2139 4366 2957 6464 Surplus/Deficit Annex V B (EPC and others) -1239 -806 -8211 -7380 -6811 -34 2445 3590 4301 4695 4993 -4458 Annex V C (BOT-Annuity)* -576 -576 -576 -576 -576 -1948 -2140 -2354 -2461 -3538 -4898 -20219 Sub-Total 2772 1106 -8405 -8943 -8907 -3291 -1804 455 4005 3295 4460 -15256 2005 .2011 2011 .2012 2012 .

(Rs. etc. in crore) Outflows (Servicing & repayment of borrowings) Borrowings (Term Loans & Bonds.) 2418 -932 8876 9418 9801 7291 6229 3209 4 743 Total Repayment of Borrowings ** 5593 Interest on Borrowings @ 9% annualised 299 168 512 1300 2127 2863 3444 3850 3988 4020 425 6018 4034 26605 Total Cumulative outstanding Balance of borrowings 2418 1486 10362 19780 29581 36872 43101 46310 46314 47056 46632 5190 174 471 475 894 4000 4425 3664 4009 4038 4460 5892 168 512 1300 2127 2863 3444 3850 3988 4020 4459 32623 47056 31800 Financing of the National Highway Development Programme • 43 .

Sign up to vote on this title
UsefulNot useful