NHAI inks pact with Macquarie

The National Highways Authority of India (NHAI) today entered into a pact with Macquarie for road projects under the highway monetisation drive, according to an official.

"Agreement (has been signed) with Macquarie for the first bundle (of highway projects) -- USD 1.5 billion -- one of the highest FDI in highways," a top NHAI official said.

Last month, Macquarie won the maiden bundle of 9 highway projects under toll-operate-transfer (TOT) model that will bring Rs 10,500 crore cash to NHAI's kitty under the first tranche of monetisation drive.

Against NHAI's expectations of Rs 6,258 crore, the winning bid was for Rs 9,681.5 crore. The total funds that will accumulate in government kitty will be about Rs 10,500 crore.

"We are happy that market has valued our assets one and a half times higher than our expectations. This bodes well for asset recycling to be used as a key resource generator for financing infrastructure in India," Member Finance NHAI, Rohit Kumar Singh had said earlier.

The funds generated from monetisation of highways will be used for new infrastructure programmes like Bharatmala, a Rs 7 lakh crore ambitious road building imitative announced by the government recently.

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 government had assessed the asset condition through drone videos and network survey vehicles.

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.