NHAI Invites Private Sector Bids For 375 km Highway Stretches Through Toll Operate Transfer (TOT)
The National Highways Authority of India (NHAI) has launched another round of asset monetisation, inviting bids for three highway stretches covering a total of 375 km in the states of Telangana and Tamil Nadu.
The monetisation will be executed through the Toll Operate Transfer (ToT) model, with two highway stretches in Telangana grouped in ToT Bundle 16 and one highway in ToT Bundle 15.
In ToT Bundle 16, private bidders are invited for two highway stretches totaling 251 km on the Hyderabad-Nagpur corridor in Telangana. Bundle 15 comprises a 124 km stretch on the four-lane Trichy-Tovrankurichi-Madurai section in Tamil Nadu.
The bidding process for both bundles is set to conclude on 28 February. Given the technical evaluation involved, the completion of this round of monetisation is anticipated in the next financial year.
Asset monetisation is a strategic initiative for NHAI to generate additional resources for its extensive highway development program. This approach is crucial for reducing NHAI's dependence on the general budget, as it is restricted from raising additional debt.
In the current fiscal year, NHAI has surpassed its budget target by raising Rs 15,968 crore through monetisation via ToT, exceeding the initial goal of Rs 10,000 crore. However, NHAI had internally aimed for even higher proceeds, ranging from Rs 10,000 to Rs 15,000 crore through this avenue.
Under the ToT model, the highest bidder receives the right to collect toll on the stretches for 20 years in exchange for an upfront payment. The bidder is also responsible for the maintenance and operation of the highway stretches.
The first ToT awards were made in 2018, and since then, Rs 42,334 crore has been raised through this route by transferring 2,287 km of highways to external investors.
This method of monetisation has attracted significant interest from major investors, including IRB Infrastructure Trust, KKR, funds backed by the Abu Dhabi Investment Authority, National Investment and Infrastructure Trust (NIIF), and the Adani Group.
The overall budget target for monetisation this year is Rs 35,000 crore, with other monetisation modes being Infrastructure Investment Trust (InvIT) and asset-backed securitisation.
Monetisation through InvIT is conducted via the National Highways Infra Trust (NHIT), sponsored by NHAI. Currently, the process to monetise 11 highway stretches in the third round of InvIT is underway, with other shareholders including Ontario Teachers' Pension Plan and Canada Pension Plan Investment Board holding 25 per cent each, NHAI holding 15.86 per cent, and SBI Balanced Advantage Fund holding 9.86 per cent.
