Rs 5,000-crore TOT package: NHAI extends bid deadline for third bundle of highway projects again

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Published: October 31, 2019 12:53:04 PM

Under the TOT model, publicly funded operational highway projects are given on a long-term lease basis to domestic and foreign “patient capital” investors.

From the originally set deadline of September 11, the period for bidding was first extended to September 30 and then to October 30. (Representational image)From the originally set deadline of September 11, the period for bidding was first extended to September 30 and then to October 30. (Representative image)

The NHAI has extended the deadline to bid for the third bundle of highway projects under the toll-operate-transfer (TOT) model to November 11. This is the third time the potential bidders are given more time, via the transfers of which the NHAI aims to garner close to Rs 5,000 crore as one-time, upfront payment by the investors.

The nine road assets on offer for the investors for 30 years to maintain and earn revenue under TOT have a total length of 566.27 km. “The third bundle is on track. One serious bidder requested us to extend the timeline for 10 more days which we have obliged. There are others in the fray,” NHAI’s member (finance) Asheesh Sharma told FE.

From the originally set deadline of September 11, the period for bidding was first extended to September 30 and then to October 30.

NHAI had invited requests for proposals (RFPs) to monetise the stretches in a bundle on June 13. As per the original plan, financial bids were to be opened in the first week of October. LoA would be issued within December 11.

Previous extensions were done on potential bidders’ requests to complete proper due diligence. Facing fund crunch, a lot of NHAI’s present and future highway building roadmap hinges on the success of TOT.

Around a dozen firms, both domestic and foreign, including Macquarie, Brookfield, Roadis, Adani and IRB Infrastructure, had initially evinced interests to take on long-term lease of nine highways stretches spread across Uttar Pradesh, Bihar, Jharkhand and Tamil Nadu.

Sources said Cube Highway, L&T, NIIF, MEP Infrastructure and Autostarde had also RFP documents and attended pre-bid meetings with the authority.

Under the TOT model, publicly funded operational highway projects are given on a long-term lease basis to domestic and foreign “patient capital” investors.

Successful bidders are required to pay the lease amount upfront and can recoup their investments and returns by collecting toll over the lease tenure of 30 years.

For the first time in October 2017, NHAI had invited bids for such public-funded highway projects. In the first tranche, nine highway projects were offered and Australia-based Macquarie bagged them quoting Rs 9,681.5 crore for the total length of 680.5 km against the floor price of Rs 6,258 crore.

NHAI’s second TOT attempt, however, failed. Against its floor price of Rs 5,632 crore from eight highway projects with a total length of 586.55 km, the highest bidder (Cube Highways) quoted only Rs 4,612 crore, forcing the authority to abandon the plan. Asset recycling of this kind is being tested in India, following many global precedents.

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