The government was planning to raise Rs 1 lakh crore in the next five years through monetisation of state-funded highway stretches through the toll-operate-transfer (TOT) route, minister of road transport and highways Nitin Gadkari said on Thursday.
Under the TOT model, the NHAI transfers operational highway projects to private entities under long-term lease (15-30 years) against upfront payments. During the concession period, the TOT operator collects user fee on the stretches in line with the rates set by the NHAI to recoup investments. The entity, of course, is required to operate and maintain the stretches.
Addressing a CII event, the minister said the monetisation programme is a win-win situation for both the private sector and the government. While it offers very exciting business and investment opportunities for the private sectors to invest in operating infrastructure that yield returns right from the very start, it also helps the government to unlock the value of investment made, repay debt and re-invest.
Through the TOT route, NHAI has already monetised two highway bundles totaling 1,247 km that fetched the authority Rs 14,692 crore. It, however, had to annul two other monetisation attempts (the second and the fourth rounds) as investors failed to match the floor prices set.
NHAI had invited bids for the two bundles under the fifth round of TOT last September. Adani Group has quoted the highest Rs 1,011-crore bid for the first bundle of 53.6 km national highway stretch under the fifth TOT round, while Nagpur-based DP Jain has offered to pay the highest Rs 1,251 crore to take on a long-term lease for the second bundle of 106 km.
The proceeds from the asset monetisation programme are also used to repay NHAI’s debt, which mounted to Rs 2.72 lakh crore, as on November 2020, and to develop highways.
Talking about the National Infrastructure Pipeline, Gadkari said that it has been expanded to cover more than 7,300 projects with a revised investment of Rs 111 lakh crore by 2025. Out of this, projects worth Rs 44 lakh crore are under implementation and projects worth Rs 34 lakh crore are at conceptualisation stage and projects worth Rs 22 lakh crore are under development.