Construction Mirror Article detail

The National Highways Authority of India (NHAI) is seeking to raise ?60,000 crore through securitisation of four under-construction road projects over the next three-five years, officials said.A proposal in this regard is before the Cabinet Committee on Economic Affairs (CCEA), said a senior NHAI official, who did not wish to be identified."A plan to form four self-sustaining special purpose vehicles (SPVs) has been firmed up. Each of these road assets will be transferred to the SPV that will help in freeing up the NHAI's deployed capital," the official stated.

Visakhapatnam-Raipur, Delhi-Amritsar-Katra, Amritsar-Jamnagar and Chennai-Bengaluru highways could be monetised through this route, said another official.Under securitisation, the NHAI gets an upfront pay-out for the asset. This amount is reimbursed in tranches from the toll income of the asset to the lender. There is no payment to lenders before toll income is generated from a project.This model is preferred for road assets that have a high traffic potential, seen as less risky by financial institutions. Transferring an asset to an SPV also lowers NHAI debt as the burden is shifted to the new entity and does not remain on the books of the highway builder.The total capital requirement for these four highway projects is estimated at ?90,000 crore."Of the total fund requirement, ?30,000 crore will be infused by the NHAI as equity. Another ?30,000 crore will be in the form of term loans, and the remaining will be raised from capital markets through institutional investors," said the official cited earlier.SSI, which will be completing 25 years in India this year, will be investing about ?100 crore in its Cheyyar factory, the company’s fifth factory located about 90 km west of Chennai, and about ?300 crore in a new greenfield factory to increase the capacity of some of the existing products as also to start manufacturing of new products such as XCMG loaders, motor graders (earlier imported and sold here), which are targetted at road and mining application areas. For export markets, it will also start making concrete pumps. “The company will be requiring 40 acres of land for the proposed new factory,” he said.