President Aramane – The New Indian Express

Express news service

NEW DELHI: The chairman of the National Highway Authority of India (NHAI) has refuted doubts about the sustainability of the growing debt incurred by the government agency responsible for the construction of roads and highways. President Giridhar Aramane, who is also the secretary of the Ministry of Road Transport and Highways (MoRTH), says the doubts over NHAI’s debt are a scarecrow created by certain vested interests.

“We typically take routes that are commercially viable, where the cost of funds is lower than the internal rate of return (IRR) of new projects. 80% of the projects supported by NHAI are like the one where the rate of return is greater than the cost of funds, ”explains Aramane speaking to the New Indian Express. He says there is no question of the unsustainability of the debt contracted by NHAI. However, he stresses that NHAI must maintain its policy of only supporting commercially viable projects.

“Typically NHAI is looking for an IRR of 6.5-8%, if this (condition) is met we will go ahead with the project,” the president said. NHAI’s debt reached Rs 3.07 lakh crore on March 31, 2021, up 23% from Rs 2.49 lakh crore a year ago, the Minister of Road Transport and Nitin Highway informed Gadkari. NHAI’s debt has quadrupled in the past 4 years from Rs 75,000 crore as of March 31, 2017. It paid rupee 18,840 crore in interest in 2020-2021.

Aramane, however, says the road authority supports road projects which may not be commercially viable in themselves but which have the potential for high economic returns. “Suppose the road’s economic return is 25% and the internal rate of return is 7-8%, then some of these roads should be used by NHAI,” Aramane explains.


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