Adani Road Transport, IRB Infrastructure, Cube Highways and Highways Infrastructure Trust have placed bids for two stretches of highways of National Highways Authority of India (NHAI) that have recently been offered for monetisation through Toll Operate Transfer (ToT) mode.

The two stretches totalling 251 km on the Hyderabad-Nagpur corridor in Telangana are part of the ToT Bundle 16. This would mark the first road monetisation in the current financial year.

Along with the technical bids, financial bids have also been received for these roads. The financial bids will be opened after finalising the Initial Estimated Concession Value (IECV).

ICEV is the discounted value of the free cash flow expected to be generated by a project road from a valuation date. In the ToT model, the bidder makes an upfront payment based on their estimate of the IECV.

In September 2020, the NHAI decided to stop announcing the IECV for ToT highway projects to prevent private firms from cartelizing. Instead, it discloses IECV after receiving technical bids.

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Bids for highways in ToT bundles 15, 17, 18 and 19 are still open. The concession period of ToT bundles is 20 years in which concessionaires are required to maintain and operate the stretches. In lieu of upfront payment, concessionaires are allowed to collect and retain the user fee.

This year the highway builder expects to raise Rs 54.000 crore from monetisation of operational roads, which is much higher than Rs 40,227 achieved last year. Of the FY 25 target, Rs 8,000 will come from project based financing and Rs 46,000 crore from ToT and National Highways Infra Trust (NHIT).

The highway builder has already identified 33 highway stretches of 2741 km that will be offered in the monetisation drive. Of the 33 highways, 12 have been offered to NHIT which is promoted by NHAI. Monetisation through NHAI is expected to bring in Rs 15,000 to Rs 20,000 crore. The remaining 21 will be monetised through ToT.

These 33 roads identified for monetisation this FY are spread over Uttar Pradesh, Rajasthan, Maharashtra, Andhra Pradesh, Telangana, Jharkhand, Orissa, Tamil Nadu and Bihar.