NHAI plans fifth TOT auction in Feb to raise Rs 3,000 crore

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Published: January 22, 2020 1:17 PM

The fifth package would consist of three to four road projects valued at around Rs 3,000 crore and will be followed up with small packages of two to three road projects after every two to three months, the source added.

NHAI, TOT auction, highways ministry, TOT packages,  road projects, Cube HighwaysThe highways ministry has been working aggressively on its asset monetisation program, as it creates a pipeline of projects that can be monetised over the coming years.

As part of its asset monetisation plan, the National Highways Authority of India (NHAI) is putting up the fifth bundle of road projects under the toll-operate-transfer (TOT) model in February, a source close to the development told FE.

The fifth package would consist of three to four road projects valued at around Rs 3,000 crore and will be followed up with small packages of two to three road projects after every two to three months, the source added. However, he declined to name the projects.

“Going ahead, the Indian roads authority will offer smaller bundles of road projects under TOT to attract small investors. These bundles may include just two to three road projects with a package size of Rs2,000 crore making it easier for domestic investors to participate and win,” sources said.

An email query and messages to member finance did not elicit any response till the time of going to press. The highways ministry has been working aggressively on its asset monetisation program, as it creates a pipeline of projects that can be monetised over the coming years. “We have identified around 80 projects to be auctioned under various TOT packages over the coming years. Eighteen projects have already been awarded out of 80 in the two projects that have been auctioned till now,” sources said.

TOT was introduced in 2016 to monetise publicly-funded highways. Under the model, investors make a one-time payment in return for long-term toll collection rights. The authority has now downsized the package, reducing the initial estimated concession value (IECV)—the base price of the bid—to Rs2,000 crore. The concession period of the bundle has been reduced to 20 years.

Since the launch, NHAI has raised around Rs15,000 crore from two TOT auctions. While the second auction was cancelled for drawing lower bids than the minimum concession value estimated by NHAI, the fourth bundle put up for auction in October last year to raise Rs4,200 crore was extended till February this year. The first auction in 2018 was won by Macquarie who bid Rs9,682 crore while Cube Highways won the third auction in November last year with a bid of Rs5,011 crore.

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