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EPFO in talks with NHAI to enhance funding for road projects

The NHAI is in talks with EPFO, which is looking to invest longterm funds in the road sector

Employees, Employees’ Provident Fund Organisation, National Highways Authority of India, EPFO, NHAI, Nitin Gadkari, LIC, Vinayak Chatterjee, Feedback Infra, State Bank of India, Toll revenue

Retirement fund body Employees’ Provident Fund Organisation (EPFO) has initiated talks with National Highways Authority of India (NHAI) to enhance funding for highways.

While EPFO has already invested around Rs 10,000 crores via NHAI bonds this year, executives from the retirement fund body met highways minister Nitin Gadkari and evinced interest in enhancing the corpus.

Given the common sources of long-term funding in the rest of the world are sovereign and pension funds, India should also depend on the likes of LIC and EPFO for meeting its long-term funding needs, said Vinayak Chatterjee, chairman, Feedback Infra. “If the loans are secured specifically against operating assets, the serviceability of the loan and the risk comes down significantly. Gradually, lending has to move towards projectisation.”

NHAI is already in talks with State Bank of India for funding against toll revenue. NHAI is looking to monetise highway projects with high traffic density to the state-owned lender. Sources said that the size of the funding could be to the tune of Rs 30,000 crore or more. NHAI is also in talks with LIC to raise funds to the tune of Rs 25,000 crore in the current financial year.

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June 2020
10 Jun 2020