Nod for Bharatmala projects along border

The Union government has approved phase I of the Bharatmala Pariyojana with a financial outlay of Rs 5.35 lakh crore to develop 24,800 km highways along with 10,000 km residual National Highways Development Project (NHDP) stretches over a period of five years.

In phase I, the development of 2,000 km border and international connectivity roads has also been envisaged with an outlay of Rs 25,000 crore. Along the Indo-Nepal border, the balance work of the Piprakothi - Motihari - Raxaul stretch on NH-28A of about 69 km length and civil cost of approximately Rs 334 crore was awarded in December 2018 and commenced in February with a scheduled completion period of 12 months.

What is the Bharatmala project?

* The Bharatmala project, which was implemented by the Union Cabinet on October 25, is the second largest highway construction project in India since NHDP, under which almost 50,000 km highways were planned.

* The project will look to improve connectivity, particularly on economic corridors, border areas and far-flung areas with an aim of quicker movement of cargo and boosting exports.

* The project is expected to create nearly 100 million man days of work during road construction and subsequently 22 million jobs as a result of the increased economic activity across the country.

* The construction will be bankrolled via several routes, including debt funds, budgetary allocation, private investment, toll operator transfer model, etc.

* Bharatmala includes economic corridors of around 9,000 km, inter-corridor and feeder routes of around 6,000 km, 5,000 km roads under the National Corridors Efficiency Programme, border and international connectivity roads of around 2,000 km, coastal and port connectivity roads of around 2,000 km, expressways of around 800 km and 10,000 km of NHDP roads.

* The total length in phase I comes to around 34,800 km.

* The ambitious umbrella programme will subsume all existing highway projects, including the flagship NHDP, launched by the Atal Bihari Vajpayee government in 1998.

* It is both an enabler and beneficiary of other key government schemes such as Sagarmala, Dedicated Freight Corridors, Industrial corridors, UDAN-RCS, BharatNet, Digital India and Make in India.

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NHAI, NIIF ink MoU for funding highways

The National Highways Authority of India (NHAI) has signed an MoU with the National Investment and Infrastructure Fund (NIIF) for funding highway projects across the country.

The NIIF is a fund promoted by the Union government to boost the infrastructure sector. The MoU is related to cooperation in the formation of special purpose vehicles (SPVs) to execute the fund arrangement for large road projects, particularly greenfield projects, to be executed by NHAI.

The NIIF is India’s first sovereign wealth fund set up by the Centre in February 2015. The aim of the fund was to maximise economic impact mainly through infrastructure investment in commercially viable projects, both greenfield and brownfield.

The functions of the NIIF are…

* Raising funds through suitable instruments, including offshore credit enhanced bonds, and attracting anchor investors to participate as partners in NIIF.

* Servicing of the investors of NIIF.

* Considering and approving candidate companies / institutions / projects (including state entities) for investments and periodic monitoring of investments.

* Investing in the corpus created by asset management companies (AMCs) for investing in private equity.

* Preparing a shelf of infrastructure projects and providing advisory services.

As of September 2018, the NIIF manages funds with a value of more than $3.4 billion.

The NIIF manages three funds - Master Fund, Fund of Funds and Strategic Fund. The funds were set up to make infrastructure investments in India by raising capital from domestic and international institutional investors.

Master Fund

The Master Fund is an infrastructure fund with the objective of primarily investing in operating assets in core infrastructure sectors such as roads, ports, airports, power, etc.

Fund of Funds

Fund of Funds anchor and/or invest in funds managed by fund managers who have a good track record in infrastructure and associated sectors. Focus areas include green infrastructure, affordable housing, infrastructure services and allied sectors.

Strategic Investment Fund

The Strategic Investment Fund is registered as an Alternative Investment Fund II under SEBI. The objective of the National Investment and Infrastructure Fund II is to invest in equity and equity-linked instruments. The strategic fund will focus on greenfield and brownfield investments in core infrastructure sectors.