NHAI holds road show for third phase of toll-operate-transfer projects

The NHAI will monetise more highway stretches on toll-operate-transfer mode as it seeks to garner funds for projects, its Chairman Narendra Nath Sinha said on Friday.

The National Highways Authority of India (NHAI) had earlier offered nine highway stretches on toll-operate-transfer (TOT) mode, under which tolling rights are awarded to a successful bidder for a certain period.

Around 6,400 kms of national highway projects have been identified under the TOT model.

Sinha was addressing investors during a road show organised by NHAI here to showcase the third phase of TOT projects to the prospective bidders.

The third phase comprises nine stretches traversing a total length of about 566 kms in Uttar Pradesh, Bihar, Jharkhand and Tamil Nadu.

"This phase has initial mandated capital works approx Rs 400 crore lower than Bundle 1 and Bundle 2 which will lead to significant savings for investors.

"Almost 43 per cent of bundle length is under annuity for almost 8-10 years which will lead to saving on at least one major maintenance cycle," the Ministry of Road Transport and Highways said in a statement.

Speaking at the event, Sinha said the government has taken initiatives to increase the investment in highways sector since 2014. The sector has been allocated enhanced outlay of Rs 83,000 crore in the Union Budget for development of roads and highways in the country.

"The remaining funding requirements to meet ambitious plans are being managed through private sector investments... several more bundles will be offered in the months to come," Sinha said.

He called upon the private investors to bid for these bundles, saying TOT is a risk-free model. He also invited investors to come up with more innovative investment models for the infrastructure sector.

Exhorting investors for qualitative improvement, he called upon the concessionaires to concentrate on improving road safety, quality of maintenance and improving toll collection methods so that waiting time at toll plazas is cut down drastically.

The first bundle of nine projects, totalling approximately 681 kms of roads in Andhra Pradesh and Gujarat, was awarded in 2018.

Huge interest was shown by foreign investors. TOT Bundle 1 was awarded to Macquarie for Rs 9,681 crore, which was 1.5 times the NHAI's estimate.

The second bundle of over 586 kms spread over four states -- Rajasthan, Gujarat, West Bengal and Bihar -- with 12 toll plazas across four highways was also offered last year but later annulled.

Bid for TOT Bundle 3 has been invited with due date of September 11, 2019.