After collecting $1.6 billion from nine highway projects, the government is eyeing about $3 billion by monetising 25 more National Highways stretches in three tranches beginning next month, a top official said.
The maiden tranche comprising nine projects under toll-operate-transfer (TOT) model was oversubscribed, fetching about $1.6 billion cash to National Highways Authority of India (NHAI) recently.
"Detailed project reports (DPRs) are being formulated for about 25 more highway projects. These will be auctioned in three tranches," an NHAI official told PTI.
To make the projects more lucrative, the government is assessing the asset condition through drone videos and network survey vehicles and will provide detailed database to the investors.
On a cumulative basis about 1,640 km of highway projects will be bid out under TOT beginning next month, the official said.
Of these 1,640 km projects, NH stretches totalling about 1,000 km will be bid out in the second and third tranches in May while the remaining about 640 km is planned to be put under hammer in the fourth tranche likely in June or July, the official added.
"Given the huge success of the maiden tranche, we expect to garner close to $3 billion from these three tranches -- $1 billion each from the second and third tranche respectively while about 750 million from fourth one," the official said.
The projects are scattered in nine states and highway stretches in Odisha and West Bengal are being prepared to be put for auction in the second tranche, followed by stretches in Rajasthan, Gujarat, Tamil Nadu and Telangana in third phase.
The fourth tranche projects will be from Uttar Pradesh, Bihar and Jharkhand, the official said.
Road Transport and Highways Minister Nitin Gadkari had said earlier that government will monetise 105 highway projects in phases that could fetch about Rs 1.5 trillion.
The government's bid for monetisation of highway projects had started on a strong note as Australia's Macquarie had clinched the maiden bundle of projects on offer for Rs 96.81 billion on February 28 while the total cash flow will be more than Rs 105 billion.
The first bundle for monetisation, released by NHAI in October 2017 covered 9 stretches five highways running across Andhra Pradesh and four in Gujarat.
The Cabinet in 2016 had authorised NHAI to monetise public funded National Highway projects. 75 operational NH projects completed under public funding had been identified for potential monetisation using the TOT Model.
TOT model in India has been developed to encourage private participation in the highways sector.
The TOT model has the concessionaire paying a one-time concession fee upfront (lump sum), which then enables the concessionaire to operate and toll the project stretch for the pre-determined 30 year concession period. This model is applicable to EPC and BOT (Annuity) highway projects, which have completed at least 2 years since date of completion.
The model, as per officials, addresses the risks associated with such a long concession contract and there are multiple provisions in the model concession agreement, which are designed to take care of eventualities like roadway expansion, high toll traffic variation etc to ensure that concessionaires are not exposed to undue risks.
As per the Economic Survey, India will need about $4.5 trillion in the next 25 years for infrastructure development, of which it will be able to garner only about $3.9 trillion.