Project News Detail

Project No :170129
Project Title :Road Projects In India
Company Name : National Highway Authority Of India
Project Detail :The first batch of road projects is likely to be bid out on a toll-operate-transfer (TOT) basis in October with more such packages to follow in the next six months, Nitin Gadkari, Union Minister for Road Transport and Highways, told reporters on the sidelines of an Indo-American Chamber of Commerce Convention in Mumbai

Under the TOT route, toll highways operated by the National Highways Authority of India (NHAI) for over two years will be leased out to entities, which will collect toll and operate the project for a specified duration, in return for a fee

The money raised can be used by NHAI to invest in new highway projects

Last year, the Cabinet Committee on Economic Affairs (CCEA) authorised NHAI to monetise 75 public-funded national highways through TOT route — in several packages

The first package, bidding for which was earlier expected in August, includes 10 highway projects in Andhra Pradesh and Gujarat. The winning bidders will get to maintain the toll roads for 30 years while the government is likely to raise up to 3,500 crore from the deal

According to ICRA, monetisation of all 75 operational highways identified earlier through the TOT route could help the government raise around 35,600 crore

Recycling road sector

TOT model was introduced by Indian government last year in an attempt to add liquidity to the road sector and attract new investors as potential investors expected to participate in the bidding are both domestic roads companies and international long-term investors, including pensions funds

Traffic risks and quality of assets as well as the level of maintenance provided over the previous years of operations, are considered as some of the major risks for the potential investors in TOT projects, according to industry experts

Given the wide variation in toll collections, the attractiveness of stretches with long vintage and established traffic volumes, especially the ones along the Golden Quadrilaterals (a network of highways connecting four top cities — Delhi, Mumbai, Chennai and Kolkata) is much more than ones with less operational track record and weak toll collections. In this context, it makes sense to bundle the projects so that weaker projects are not left out,” ICRA analysts said in a report

According to the agency, the median vintage in terms of toll collections for 75 projects stood at 5.22 years

Out of this, around 26 projects are built on the Build-Operate-Transfer (BOT Annuity) basis while remaining have been implemented on the EPC basis

Project Location : Not Classified - Not Classified - india
Project Industry :Roads
Project Estimation :Refer Document
Status :Announced
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