APR Constructions Limited - Saffron Capital

Central Road Fund (CRF)
The Central Government has created a dedicated fund called Central Road Fund (CRF) from collection of Cess on
Petrol and High Speed Diesel (HSD) Oil. Presently, Rs.2/- per litre is collected as cess on petrol and HSD Oil. The
fund is distributed for development and maintenance of National Highways, state roads, rural roads, and for railway
over bridges/under bridges and other safety features as provided in Central Road Fund Act, 2000. (Source:
www.morth.nic.in)
Investments
Over the last 3 years, road investments have grown at a CAGR of 24 per cent on account of the Central and State
governments‟ continued focus on improving road development.
Out of the total road investments over the last 3 years, state roads contributed 48 per cent, followed by the
national highways at around 31 per cent and rural roads accounted for the remaining 21 per cent.
Investments in national highways has slowed down over the last 3 years due to various policy issues with respect
to the Model Concession Agreement (MCA), RFQ and the economic slowdown
On account of the government‟s continued thrust on rural development, Investments in rural roads (PMGSY) has
increased at a CAGR of 44 per cent over the last 3 years.
CRISIL Research's estimates of road investments(2009-10 to 2013-14)
Road Investments
Rs. billion
Segment 2009 - 10 2010 - 11 2011 - 12 2012 - 13 2013 - 14 Total
National Highways 264 287 388 471 477 1887
State Roads 326 373 395 445 471 2010
Rural Roads 181 218 264 304 352 1319
Total 771 878 1047 1220 1300 5216
Source:CRISIL Research, Indian Infrastructure Report, November 2009)
Out of the total road investments, state roads would account for 39 per cent, followed by national highways with
a share of around 36 per cent, while rural roads would constitute the remaining 25 per cent of the total
investment.
The state governments‟ focus on improving state roads have led to an increase in state road investments since
2006-07.Consequently , the share of state roads and highways in road investments has risen
Out of the total NHDP investments, 75 percent would be contributed by phase III and Phase IV. However,
majority of the investments from Phase III and Phase IV have been deferred by 1-2 years on account of policy
issues and the overall economic slowdown. Investments from these phases are expected to scale up in the next 5
years.
Rural roads are expected to see continued investment momentum under the PMGSY.
(Source:CRISIL Research, Indian Infrastructure Report, November 2009)
Funding Sources
National highways are funded through private and public funds. Around 55 per cent of the total funding
requirement of Rs 1.9 trillion is expected to come from private sector through internal accruals, equity infusion,
private placements, sale or securitization of existing operational projects etc. The balance 45 per cent is to be
funded by NHAI through cess funds, market borrowings, budgetary support, toll revenues and external assistance
in the form of grants and loans from multi-lateral agencies like the World Bank, Asian Development Bank
(ADB) etc.
State roads are largely funded through budgetary allocations of the respective state governments. Funds from
NABARD, HUDCO, RURAL Infrastructure Development Fund (RIDF) schemes and the Central government‟s
fund (the state‟s portion of CRF) have supplemented the same. Out of the total funding requirement of Rs 2
trillion in state roads, around 16 percent of the total funding requirement is expected to come from private sector,
with the rest coming from the public sector.
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