Kerala infuses funds into 565-km highway project

The Kerala Infrastructure Investment Fund Board (KIIFB) disbursed ₹390 crore to NHAI as a part of the first installment of a ₹5,200 crore grant to NHAI to part finance the four and six-laning of 565 km of national highways in the state. This model is likely to be used by NHAI with other state governments to part-fund the highway development program. NHAI estimates a funding requirement of ₹48,000 crore to convert 500 km of two-lane highways into four-lanes, close to half of which will be used to acquire land. NHAI needs around ₹22,000 crore to acquire 1,176 ha of additional land to build four/six lane highways as acquiring one ha of land, including structures built on it, currently costs as much as ₹20 crore. The state government has directed KIIFB to extend the money as grant to NHAI. The state government cannot support KIIFB directly but advised the agency to borrow ₹50,000 crore from the market over the next five years against future cash flows. The state government, in turn, will give a portion of the motor vehicles tax collections over the next 30 years to help KIIFB repay the loans, said an official spokesperson.