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Amidst weak recovery and heightened global liquidity, it is welcome that monetisation of infrastructural assets is gaining speed here. Notice that the National Highways Authority of India (NHAI) is reportedly seeking to monetise 7,500 km of road projects for a staggering Rs 3 lakh crore by 2024-25. But it would be downright suboptimal to earmark the proceeds solely for building more road projects nationwide, especially if superior social and economic benefits are to be obtained by gainfully investing in, say, a rail track, an education scheme or a health project, so as to augment infrastructure across the board.
Hence the pressing need for an innovative platform for independent appraisal, multi-stage review and time-bound approval of projects in the pipeline, akin to the Gateway Review Process in the UK. We do need to involve multiple stakeholders in project vetting, with the express purpose of eschewing conflict of interest of the entities involved in project preparation, appraisal and approval. The Public-Private Partnership Appraisal Committee at the finance ministry surely needs a more broad-based review mechanism. A robust policy framework is called for, with the requisite institutional capacity.
Reportedly, asset monetisation at NHAI would include greenfield expressways and access-controlled highways. About 18% of the ?111 lakh crore infrastructure investment pipeline is expected to be in the roads sector, primarily to augment road length and safety features. What’s clearly required is adoption of international quality standards for Indian roads, including such vital parameters as surface roughness index and large-scale use of automated road-condition monitoring systems. Meanwhile, toll collections at NHAI have grown at only a modest pace, and with reported debts of over Rs 2.5 lakh crore, it is now excessively leveraged enough for the Prime Minister’s Office to express concern. Monetising its real estate development rights would make perfect sense. Instead of excessive debt, take the road less travelled, NHAI.
This piece appeared as an editorial opinion in the print edition of The Economic Times.