Putting in a Rs 9,681.5-crore bid, Australian firm Macquarie has emerged as the winner for the first bunch of nine highway projects under the toll-operate-transfer (TOT) model. Macquarie ‘s winning bid is around 29% higher than the second-highest bid placed by Canada’s Brookfield and exceeds National Highway Authority of India’s own expectation of Rs 6,258 crore by one-and-a-half times. “We are happy that market has valued our assets one-and-a-half times higher than our expectations. This bodes well for asset recycling to be used as a key resource generator for financing infrastructure in India,” said NHAI’s member finance Rohit Kumar Singh. The NHAI had in October last year had put in nine projects with a total length of 680 km for giving on a 30-year lease under the TOT model, following the approval of the Cabinet Committee on Economic Affairs to monetise 75 operational public-funded highway projects in 2016. Crisil estimates that the NHAI can raise about Rs 60,000 crore over the next two to three years by monetising these 75 road stretches. Of the nine projects, five are running across Andhra Pradesh and four in Gujarat. Apart from Macquaire and Brookfield, IRB Infrastructure and Roadis-NIIF were there in the final run to get these assets on long-term contracts.
Sources said while Canada’s Brookfield put in rs 7,511-crore bid, IRB Infrastructure’s bid was Rs 6,930 crore. Netherlands-based Roadis Transportation Holding, which has tied up with India’s quasi-sovereign National Investment and Infrastructure Fund, placed Rs 6,611-crore bid. The NHAI would use upfront receivables exclusively for funding construction of highways. Bidders will recoup their investments — and returns — by collecting toll over the lease tenure of 30 years. The model is applicable to EPC and BOT (annuity) highway projects, which have completed at least two years since the commercial operational date. Asset recycling of this kind is going to be tested for the first time in India, though internationally there have been many precedents. The US, for example, did it during the subprime crisis of 2008 to bolster cash flows to the exchequer; the practice is also prevalent in Australia. Sources said the the NHAI is likely to invite bids for the second bunch of projects involving five to six operational highways under the TOT model by next month.
