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NHAI may cut bond rates

New Delhi, Sept. 20 (PTI): Having raised over Rs 2,000 crore from market borrowings this fiscal, National Highway Authority of India (NHAI) may now cut interest rate on its tax-free bonds issue by 50 basis points.

NHAI’s capital gains exemption bonds under 54ED of the IT Act currently carries a coupon rate of 7.5 per cent.

“We are thinking of aligning the interest rate on our bonds issue with market offerings,” NHAI chairman Deepak Dasgupta said.

NHAI had cut interest rate on the bonds issue from 8.0 per cent to 7.5 per cent after raising Rs 2,232.43 crore in first four months of 2002-03 to part fund the Rs 58,000 crore National Highway Development Project (NHDP).

NHAI, which raised Rs 656 crore in 2000-01 and Rs 804 crore in 2001-02 through tax-exempt bonds, aims to raise another Rs 1,000 crore this fiscal. It opened yet another bonds issue on August 5, carrying a coupon rate of 7.5 per cent.

The earlier bonds issue carried an interest rate of 8 per cent, he said, adding a total of Rs 10,000 crore is being raised through market borrowings to fund NHDP. Dasgupta said funds for the first phase of NHDP, comprising golden quadrilateral (GQ) connecting four metros of Delhi, Mumbai, Chennai and Calcutta, have been tied up.

The Re 1 per litre cess on petrol and diesel accrues Rs 2,000 crore annually to the project while NHAI has tied up external assistance equivalent to Rs 7,967 crore. The remainder of the Rs 32,999 crore tied up would come from BOT projects.

Negotiations are underway for financing phase two, comprising four/six lane highways connecting Srinagar to Kanyakumari and Silchar to Porbandar, by World Bank and Asian Development Bank at $ 500 million and $ 300-400 million per year respectively.

Dasgupta said NHAI has also finalised a Rs 6,000 crore line of credit from Life Insurance Corporation (LIC), which would carry interest rate equivalent to government securities plus 100 basis points.

The 25-year loan from LIC would have a moratorium of 15 years, he said, adding the bonds issue have a moratorium of three years and are repayable in seven years.

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