NHAI to garner Rs 4,200 crore from two TOT projects

NIIF is a collaborative investment platform for international and Indian investors anchored by the government.

NHAI to garner Rs 4,200 crore from two TOT projects
The financial bids for the two TOT bundles were opened on Monday.

The National Highways Authority of India (NHAI) will get Rs 4,200 crore as upfront payment from monetisation of two operational highway stretches with a combined length of 200 km under the toll-operate-transfer (TOT) model.

Sources said National Investment and Infrastructure Trust (NIIF) has offered to pay the highest Rs 3,011 crore for a 72-km stretch on NH-19 in Uttar Pradesh for the ninth TOT bundle. Sekura Roads has offered Rs 1,711 crore for the tenth bundle, which consists of a 125-km stretch on NH-36 in Madhya Pradesh. The financial bids for the two TOT bundles were opened on Monday.

NIIF is a collaborative investment platform for international and Indian investors anchored by the government. Sekura Roads is a portfolio company of Edelweiss Infrastructure Yield Plus fund.

Under the TOT model, operators collect user fee on the stretches following the prescribed rates by the NHAI to recoup their investments; but they have to operate and maintain the stretches during the entire concession period — 15 years each for the ninth and tenth bundles.

However, NHAI sources said, the highest quote for a TOT bundle does not mean winning of the bid. The NHAI Board will meet soon to evaluate the highest bids for the two stretches. If found not matching with its expectations, it may also annul the bids, like it did for the sixth and seventh bundles.

Sources said Adani Enterprises (Rs 2,610 crore), Cube Highways (Rs 2,500 crore), IRB Infrastructure Trust (Rs 2,421) and PNC Infratech (Rs 1,345 crore) were among the seven companies competing for the ninth bundle. There were five bidders in all for the tenth bundle, which also included Adani (Rs 814 crore), IRB (Rs 756 crore), Oriental Structural (Rs 699 crore) and PNC Infratech (Rs 405 crore).

From the fifth bundle onwards, the government decided not to disclose the reserve price for the TOT bundles at the time of inviting bids, leaving it to the market to discover the price. It was also decided that the reserve price would be announced after opening the financial bids.

Using the TOT model, the NHAI has been monetising highway stretches since 2018. However, apart from TOT, it has the permission to raise funds through Infrastructure investment trust (InvIT) and toll securitisation. So far, the TOT mode has fetched the authority Rs 31,200 crore. Its maiden InvIT has fetched Rs 8,000 crore. The authority has also received Rs 21,000 crore by way of toll securitisation.

The monetisation proceeds are used to lay newer highway stretches and retire debt that mounted to Rs 3.5 trillion at the end of 2021-22. The authority has drawn up a plan to monetise 21,700-km stretch in the next three years, starting from 2022-23.

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