 "Adani top bidder for 124-km NH stretch in Tamil Nadu, offers Rs 1,692 cr")
Adani Road Transport has become the highest bidder to manage a 124-km stretch of National Highway 38 in Tamil Nadu. The company offered Rs 1,692 crore under the toll-operate-transfer (TOT) model, according to a report by The Economic Times.
Other bidders included IRB Infrastructure Developers who offered Rs 1,485 crore, Epic Concessions offered Rs 1,152 crore, and Prakash Asphaltings & Toll Highways offered Rs 876 crore. The stretch includes the four-lane Trichy-Thuvarankurichi-Madurai section.
According to the news report, the National Highways Authority of India (NHAI) opened the financial bids on Tuesday. A senior government official mentioned that the contract will likely be awarded to Adani Road Transport after NHAI’s board approves the bid. NHAI had put this highway stretch up for auction as part of TOT Bundle 15 in mid-2024.
What is the TOT model for highways?
The TOT model allows private companies to operate, maintain, and collect tolls on highways for 15-30 years in exchange for a one-time fee paid to the government.
TOT is a public-private partnership strategy used to enhance road maintenance and management. Through this model, the government identifies national highway projects funded by public investment and deems them eligible for monetisation. These projects are then put up for competitive bidding, allowing developers and investors, known as concessionaires, to bid for the right to collect tolls over a specified concession period.
The winning concessionaire pays the government a lump sum upfront and takes on the responsibility of operating and maintaining the highway during the concession period. This approach ensures better upkeep of the roads while providing a revenue source for the government to fund new infrastructure projects. Once the concession period ends, ownership of the highway reverts to the government.
NHAI plans to monetise 86 highways
According to the report, the authority further plans to monetise 86 highway stretches, covering 4,912 km. It has already awarded contracts for five stretches (Bundles 11, 12, 13, 14, and 16) and aims to finalise three more by the end of the financial year 2025.
NHAI has set a target to raise Rs 54,000 crore in 2025 through road asset monetisation. The funds will be used for new infrastructure projects and to reduce its debt, which stood at Rs 2.76 trillion in December 2024. In September 2024, Highways Infrastructure Trust secured the contract for TOT Bundle 16.