Monetisation: NHAI targets to raise Rs 2 lakh crore in three years

While more stretches are to be added to the InvIT in future, the authority exercised the third option of toll securitisation for raising Rs 9,731 crore to part-fund the Delhi-Mumbai greenfield expressway project in March this year.

None of the bidders matched up the floor price of Rs 5,632 for 586.55-km length in the second TOT bundle, forcing NHAI to abandon the plan. Cube Highways bagged the third bundle of 566 km for an upfront consideration of Rs 5,011 crore. The fourth round of auction was cancelled.
None of the bidders matched up the floor price of Rs 5,632 for 586.55-km length in the second TOT bundle, forcing NHAI to abandon the plan. Cube Highways bagged the third bundle of 566 km for an upfront consideration of Rs 5,011 crore. The fourth round of auction was cancelled.

The National Highways Authority of India (NHAI) has set an ambitious target to monetise 21,700 km operational highway stretches in three years starting 2022-23, a plan that could help it raise around Rs 2 lakh crore. Monetisation of the existing assets will be carried out through three routes: toll operate transfer (TOT), toll securitisation and infrastructure investment trusts (InvITs)

Replying to a written question in the Lok Sabha, minister for road transport and highways Nitin Gadkari on Thursday said NHAI has identified highways with combined length of 5,500 km for monetisation in 2022-23, 7,300 km in 2023-24 and 8,900 km in 2024-25.

NHAI will use the funds to build new highways and cut its debt, which was Rs 3.17 lakh crore at the end of 2020-21. The authority has been monetising government-funded highway projects since 2018. The first TOT bundle of 680 km fetched the authority Rs 9,681 crore — 1.5 times the base price. Under TOT, NHAI gives the stretches to the highest bidder on long-term lease, generally for 15-30 years. After the lease period is over, the asset comes back to the NHAI fold.

None of the bidders matched up the floor price of Rs 5,632 for 586.55-km length in the second TOT bundle, forcing NHAI to abandon the plan. Cube Highways bagged the third bundle of 566 km for an upfront consideration of Rs 5,011 crore. The fourth round of auction was cancelled.

Bids are already out for fifth, sixth and seventh bundles, which together will handle 450 km of highway assets. The government has recently decided not to disclose the reserve price for the TOT bundles, leaving it to the market to discover the price.

Depending upon the traffic flow, each kilometre of the NHAI stretch could fetch the authority between Rs 8-10 crore, analysts say.
In early November, NHAI launched its maiden InvIT, another mode of asset monetisation, to mop up Rs 5,100 crore by monetising 390 km highway stretches.
While more stretches are to be added to the InvIT in future, the authority exercised the third option of toll securitisation for raising Rs 9,731 crore to part-fund the Delhi-Mumbai greenfield expressway project in March this year.

For the current fiscal, NHAI has identified 86 stretches with an aggregate length of around 4,912 km for monetisation. “The priority, mode of monetisation, expected upfront realisation amount and capital cost involved, shall be determined in accordance with the government norms, on the basis of project viability and market appetite prevalent at the time of bidding,” Gadkari said.

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