Centre working on five-year plan to rid NHAI of debt

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₹3.4 trillion debt while working on reducing the debt servicing obligations of the highway developer, which is also the prime agency for surface infrastructure development in the country. The Centre is in talks with the NHAI’s long-term bondholders for prepayment, the second person said, also on condition of anonymity, adding the roadmaker's interest payments are taking up a big chunk of the government’s annual budget allocations. The NHAI has raised funds through fixed coupon rate bonds with tenures of five, 10, 15, 20, 25 and 30 years.

Several of these bond issues, the last of which came in FY22, are maturing between 2025 and 2030. The plan is to retire these bonds first before looking at giving an early exit to long-term bondholders with maturity extending up to 2040, the second person said. Spokespersons of the finance and road ministries, and the National Highways Authority of India (NHAI) didn’t respond to emailed queries.

The government has suspended large borrowings by the NHAI since FY23, which means having to meeting the entire capital needs of the highway developer through Central budget allocations. During FY23, the NHAI borrowed a small amount of ₹798 crore through 54EC bonds. The high level of debt and a rising debt servicing obligation mean that a large portion of the budgetary allocation of the NHAI is not getting used for infrastructure creation, the first person mentioned above said.