12 bundles of highway stretches up for TOT by NHAI
14 May 2024 CW Team
In order to increase the monetization of highways through the Toll Operate Transfer (ToT) model, the National Highways Authority of India (NHAI) has decided to offer twelve bundles of stretches for bidding, an increase over the four bundles provided last year.
KKR supported Highways Infrastructure Trust, Cube Highways, IRB Infrastructure Trust, funds backed by the Abu Dhabi Investment Authority, the National Investment and Infrastructure Trust (NIIF), and Adani Group were among the bidders for bundles 11, 12, 13, and 14 last year. It was mentioned that the monetization of four asset bundles the year before had brought in Rs 159.68 billion for the NHAI.
According to an official, there would be a change in the usual practice, with the NHAI planning to offer three highway bundles for bidding in each round instead of the previous two. The official further stated that this decision was made due to the high demand from investors, and as a result, three bundles would be available for bidding in every quarter.
33 highway segments totaling 2,741 km have already been recognised by the highway constructor as being offered this time. Across Uttar Pradesh, Rajasthan, Maharashtra, Andhra Pradesh, Telangana, Jharkhand, Orissa, Tamil Nadu, and Bihar, these routes are dispersed. There will also be a 4.4 Km stretch of the elevated corridor in Badarpur available.
The aggressiveness on ToT coincides with NHAI's pursuit of a monetization target of Rs 540 billion for this fiscal year, far more than the Rs 402 billion achieved the previous year. Analysts estimate that the revenue generated from the monetisation of each km of roadway is around Rs 0.2 billion. But the quantity varies according to the user base, i.e., whether personal or commercial cars use it more frequently. It also depends on the traffic density.
For two ToT bundles, 15 and 16, the tendering process has already begun. One 124 km length of the four-lane Trichy-Tovrankurichi-Madurai section is available in Bundle 15, while two 251 km segments of the Telangana Hyderabad-Nagpur corridor are bundled together in Bundle 16.
According to the official, the process of monetising these routes will be finished in the next few weeks, and the next round of bidding for the three bundles will take place in June. This fiscal year, instead of the big and small bundles from the previous year, three bundles?big, medium, and tiny?will be put up for simultaneous bids.
In place of an upfront payment, the top bidder for roadways along the ToT route is permitted to collect the toll on the affected segments for 20 years. These sections must likewise be kept up and run by them. 2018 saw the first roadways awarded under the ToT paradigm. Since then, 2287 km of roadways have been transferred to overseas investors, raising Rs 423 billion through this route.