Govt's Rs7,00,000-cr highway pitch boosts infrastructure stocks

The centre's proposal to invest Rs6,92,000 crore for developing about 83,000 km of roads in the country has given a big boost to shares of most infrastructure companies in the morning trade today with shares of companies in the road sector zooming up to 7 per cent.

The union cabinet on Tuesday approved plans to build 83,677 km of highways over the next five years, at an estimated cost of Rs6,92,000 crore, which includes the ambitious Bharatmala project.

Ashoka Buildcon surged 5 per cent in early trade, while IRB Infrastructure climbed 2.40 per cent in early trade at around 9.25 am (IST). Others, including Sadbhav Engineering, ITD Cementation, Ahluwalia Contracts, KNR Constructions and Dilip Buildcon, also gained riding by 7 per cent, 0.86 per cent, 1.15 per cent, 1.54 per cent and 5.20 per cent, respectively.

The Rs6,92,000 crore highway projects, which also include the Bharatmala project, an umbrella programme for roads under which 34,800 km of highways will be constructed at a cost of Rs5.35 lakh crore, will generate 14.2 crore mandays, the government said.

Taking forward its commitment to providing more efficient transportation, the government has debottlenecked the roads sector and significantly stepped up the highway development and road building programme. The new umbrella programme seeks to further optimise the efficiency of movement of goods and people across the country.

Out of the Rs6,92,000 crore umbrella programme, Bharatmala Pariyojana will get an outlay of Rs5,35,000 crore. The BMP programme involves building 34,800 km roads of various categories, which include:

•      Economic corridors (9,000 km)

•      Inter corridor and feeder routes (6,000 km)

•      National corridors efficiency improvement (5,000 km)

•      Border roads and international connectivity (2,000 km)

•      Coastal roads and port connectivity (2,000 km)

•      Greenfield expressways (800 km)

•      Balance NHDP works (10,000 km)

Bharatmala works are proposed to be completed in 5 years by 2021-22 through NHAI, NHIDCL, MoRTH and State PWDs.

For early completion and speedy implementation of projects, substantial delegation of powers has been provided to NHAI, NHIDCL and ministry of road transport and highways.

For funding of BMP, Rs.2,09,000 crore will be raised as debt from the market, Rs1,06,000 crore of private investments would be mobilized through PPP and Rs2,19,000 crore will be provided out of accruals to the Central Road Fund (CRF), toll-oparate-maintain-transfer monetisation proceeds and toll collections of NHAI.

In addition to 34,800 km under Bharatmala, balance works of 48,877 km of works under other current schemes will be implemented by NHAI/MoRTH with an outlay of Rs1,57,000 crore. This will be financed by providing Rs97,000 crore from CRF and Rs59,000 crore as gross budgetary support.

For the first time ever, monetisation of 82 operating highways under a low risk ToT model has been initiated with a private investment potential of Rs34,000 crore. The first bundle of 9 NH stretches of 680.64 Km has been put to tender by NHAI with potential monetisation value of Rs6,258 crore.