NHAI to offer 32 projects in next round of toll-operate-transfer bids

The National Highways Authority of India (NHAI) would offer 1,500 km — 32 projects — under the Toll-Operate-Transfer (TOT) model this financial year as it chalks out a fresh monetisation plan.

Keeping in mind the imp­act of the second wave of Covid-19, the projects on offer would be decided on a case-by-case basis. “It is not advisable to receive bids when the traffic is fluctuating due to Covid-related restricted movement. We will wait for the traffic to stabilise before the next bundle of TOT bids,” a senior NHAI official told Business Standard.

The authority has so far generated over Rs 17,000 crore through the TOT model. For the most recent fifth bundle of TOT auctions, the NHAI got bids of over Rs 600 crore more than the reserve price. 

“We have identified 32 projects of the length of 1,574 km for monetisation. The wo­rk of carrying out the technical due diligence and traffic survey is in process. Based on tec­hnical and traffic survey re­p­orts and considering the ma­­r­ket conditions, the priority and mode of monetisation will be decided to invite bids, on a case-by-case basis,” the official said.

Experts feel there has been continued interest in the roads sector even during the pandemic. The government’s push in implementation of FASTag has given the additional comfort to toll road companies as it improves efficiency in toll operations and ease of doing business.

“Considering the past transactions, there is a lead time of about four to six months between the time a request for proposal is floated and final closure is received,” said Jagannarayan Padmanabhan, director and practice leader for transport and logistics at CRISIL Infrastructure Advisory.

“Also the bidders will take comfort in the fact that the impact on toll collections has been minimal and a good rebound in traffic has been observed in the last three quarters. Given all this, there is still an appetite for TOT projects in the market — the structure and packaging/location of these assets would be the key metric to look out for.”

Although many states have been in and out of lockdowns, toll collections haven’t suffered much as the main toll-generating traffic is the freight segment, which hasn’t been affected. Besides the TOT model, the NHAI is also exploring the InvIT route to monetise assets. The authority has firmed up a pipeline of 19 projects worth Rs 35,000 crore under the InvIT model.

In December 2019, the Union Cabinet approved the proposal of the Ministry of Road Transport and Highways to authorise the NHAI to set up InvITs to monetise highways that have a toll collection track record of at least one year.