NHAI cancels fourth TOT bundle; invites bids for fifth set of projects

The govt had to earlier cancel the second package of TOT because of tepid response while the third package ran into funding troubles for the Singapore-based operator Cube Highways

With the National Highways Authority of India (NHAI) inviting bids for the fifth round of road monetisation projects, the previous bundle that was to open on September 30 has been cancelled by the authority.

It is learnt that the order for annulment of the fourth bundle was issued by NHAI on Monday, September 28.

The Request for Proposal (RFP) for projects comprising seven stretches (Bundle-4) on Toll-Operate-Transfer mode has been annulled, sources said without divulging the reason for the cancellation.

NHAI has invited bids for the fifth bundle of National Highway Projects under the TOT mode in Gujarat. Separate bids have been invited for the two Bundles each consisting of one National Highway stretch as per the following. The last date of submission of bids is December 23, 2020.

The total contract period of the TOT is 20 years in which the Concessionaire would be required to maintain and operate the stretch.  

In lieu of this, Concessionaire will get the right to collect and retain user fee for these stretches for 20 years in accordance with prescribed fee rates under NH Fee Rules, an official statement said. 

TOT is an Asset Recycle program wherein, already operational National Highways are being provided to private entities on long term concession basis. The TOT operator has a right to collect user fee and has an obligation to Operate and Maintain, on the international standards, the respective stretches during the concession period.

The TOT model has been developed to encourage private participation in the highway sector and generate more resources for construction of future highways. 

The government had to earlier cancel the second package of TOT because of tepid response while the third package ran into funding troubles for the Singapore-based operator Cube Highways. The company had to make an upfront payment of Rs 5,011 crore for nine highway stretches, which it had won under auctions held last November. The due date for making the payment was mid-April but it invoked force majeure clause to get an extension. Earlier this month, the company announced financial closure after it signed an agreement with State Bank of India for a Rs 3,500 crore term loan facility to part fund the upfront fee. 

In 2016, the Cabinet Committee on Economic Affairs had authorised NHAI to monetise publicly funded national highway projects. Currently, 75 operational national highway projects completed via public funding have been identified for monetisation using the TOT model.

The first TOT bundle, which was bagged by a joint venture between Macquarie and Ashoka Buildcon for Rs 9,680 crore. The company’s bid was 1.5 times higher than the base price of Rs 6,260 crore.