National Highway Authority of India (NHAI) is undertaking the establishment of India’s first government or semi government promoted Infrastructure Investment Trust (InvIT) under the Indian Trust Act, 1882 and Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 to facilitate investment in the highway sector.
- In this regard, a new company will also be set up to act as the Investment Manager to the proposed NHAI InvIT for mobilising resources from the market for monetizing completed highway projects of NHAI that have a toll collection track record of at least one year.
- The decision for setting up the NHAI InvIT is backed by Cabinet’s approval in December 2019 to the proposal of the Ministry of Road Transport and Highways (MoRTH), authorising NHAI to set up an InvIT.
Dr Sukhbir Singh Sandhu is the convener of Search-cum-selection committee
To have a professional management structure, NHAI has constituted a search-cum-selection committee for the appointment of two independent Directors and one Chairman for the Investment Manager Board.
- Dr Sukhbir Singh Sandhu (Chairman of NHAI)is the convener of the Committee and other members include Deepak Parekh, Chairman, Housing Development Finance Corporation (HDFC); Girish Chandra Chaturvedi, Chairman, ICICI (Industrial Credit and Investment Corporation of India) Bank; and Sanjay Mitra, Ex-Secretary, MoRTH.
InvITs are instruments designed to pool small sums of money from a number of investors to invest in infrastructure projects that generate cash flows over a period of time. These are regulated by SEBI.
- Benefit: InvIT enables the infrastructure company to fulfil its debt obligations quickly as Infrastructure projects such as roads or highways take some time to generate steady cash flows
About National Highway Authority of India (NHAI):
Administrator– Ministry of Road Transport and Highways
Headquarter– New Delhi
About Securities and Exchange Board of India:
Chairman– Ajay Tyagi