All completed projects would be put up for monetisation after two years of operation and all the BoT (toll) projects will be considered for monetisation immediately on completion of the existing concessions, the minister said.

On the Prime Minister’s Office (PMO) recently flagging concerns on the operational performance of the NHAI, Gadkari said, “They (PMO) have forwarded to us certain suggestions received by them, and asked for our views on the same. We do have plans to reorganize the NHAI and take a relook at our financing models to further innovate and improve.”

The need to construct national highways would come down after the completion of the Bharatmala programme, according to the minister. “The NHAI would then be more focused on road asset management and include asset monetisation, contract management, operation and maintenance of existing highways with capacity augmentation wherever required.”

The NHAI has already taken up asset monetisation through toll operate transfer mode. After receiving a favourable response in the first bundle that was secured by Macquaire for Rs 9,700 crore, Gadkari expects it to be the main funding source in the coming years.

The NHAI is working on plans to raise at least Rs 85,000 crore through asset monetisation till 2024-25 through ToT and InvITs (infrastructure investment trusts), he said.

InvITs are innovative vehicles that allow developers to monetise revenue-generating real estate and infrastructure assets, while enabling investors or unit holders to invest in these assets without actually owning them. InvITs will be for monetizing projects and mobilise additional resources through capital markets. The highways ministry will require Cabinet approvals for these plans.

Another innovative model of financing for the NHAI is through the National Investment and Infrastructure Fund (NIIF). It would form a special purpose vehicle with equity contribution from institutional financial investors. The SPV will raise debt to ensure off-budget funding of projects. Construction risk will be borne by the NHAI.

Saudi Arabia has offered to invest $100 billion in infrastructure. "We are in the process of gathering market feedback for this model," Gadkari added. Analysts have raised concerns on NHAI becoming highly leveraged with its debt expected to touch Rs 2.5 trillion by the end of current financial year. The government support has not matched the pace of investment requirement in the sector. This year it marginally fell to Rs 36,691 crore over last year, while borrowings are expected to rise by about 21 per cent to Rs 72,000 crore. The authority is also looking at developing a system for capturing returns on appreciation in land value along developed national highway projects.

“If NHAI could get a certain percentage of this value, it could be ploughed back for maintaining and upgrading the road assets. Right now, the only returns to NHAI are through user fee (toll),” the minister added.

NHAI is also working to raise long-term finance from banks by securitising the user fee receipts from fee plazas as alternate mode of asset monetisation.

Funding from multilateral agencies such as JICA, JBIC (Japan Bank for International Cooperation) and World Bank are being explored for specific SPVs to develop greenfield corridors on a case to case basis. The Union Road Ministry has suggested that part of the planned funding could be invested in the SPV being set up by NHAI and NIIF and the funds could be utilized for construction of expressways under the Bharatmala scheme, which aims to construct 20,000 km of highways connecting western and eastern parts of the country at an estimated investment of Rs 7 trillion.