NITI Aayog seeks consultant for evaluation of road projects and functioning of NHAI

New Delhi:¬†With the debt of National Highway Authority of India (NHAI) surpassing Rs 3 lakh crore and its dependance on government’s budgetary support increasing, the NITI Aayog has decided to go in for an institutional evaluation of the highway construction body.

The government think tank’s Development Monitoring and Evaluation Office (DMEO) has floated a tender for selection of a technical consultant for conducting an evaluation study of road projects and the functioning of NHAI.

“In the context of its (NHAI’s) increasing debt servicing burden, contingent liabilities, dependence on government budgetary support, and ambitious highway and infrastructure development plan, there is a need to better understand the performance of NHAI and evaluate its existing practices and finances in order to provide inputs in improving its functioning,” the DMEO said in it’s report.

NHAI’s debt has seen an increase from Rs 23,797 crore in March 2014 to Rs 3.48 lakh crore in March 2022.

NHAI’s spending in FY22 was met partly by the government’s budgetary allocation which was Rs 57,350 crore and the rest through borrowings from the market, which was to the tune of Rs 65,000 crore.

”Therefore, NITI Aayog plans to conduct an institutional evaluation of NHAI with the focus on its operations, relevance, effectiveness, efficiency and finances, as well as existing policies and decision making processes,” it added.

According DMEO report, the evaluation of NHAI will be conducted using the capacity, motivation and external environment (CME)- relevance, effectiveness, efficiency, financial viability and sustainability (REEFS) framework.

The objective of the study is to assess key performance pillars such as relevance, effectiveness, efficiency, financial viability and sustainability of NHAI in the context of the external environment, internal motivation and capacities of the institution, DMEO explained.

The study will also assess financial viability of NHAI to meet short- and long-term liabilities, raise funds efficiently, existence of diversified streams of revenue, mechanisms in place to mitigate financial risk and having processes and practices in place for planning and forecasting.

Consultants will also assess the asset monetisation strategy of NHAI with regards to the per cent of revenue from asset monetisation, strategy for bundling stretches, reasons for successful and unsuccessful bundles and assessment of InvITS.

To service it’s debt, NHAI had to spend Rs 31,735 crore in FY23, which was one-fifth of its total spending. The FY23 budget saw an equity infusion into NHAI, where budgetary support to NHAI rose by 134 per cent to Rs 1,99,108 crore.

As of March 31, 2020, NHAI had contingent liabilities of Rs 71,765 crore.

Key functions of NHAI is to develop and maintain national highways and advise the central government on matters relating to highways.

The National Highways have a total length of 1,41,190 kilometres. Though they comprise only 2.2 per cent of the total road length in the country, they carry over 40 per cent of the road traffic.