Govt ready to push road infra through TOT model

ToT push to road infrastructure

The Union Government is all set for a big push in the road infrastructure sector of the country with its toll-operate-transfer (TOT) model. Under the TOT model, publicly funded operational highway projects are given to domestic and foreign “patient capital” investors on a long-term lease basis. Successful bidders are required to pay the lease amount upfront and can recoup their investments by collecting toll over the lease tenure of 30 years.

The National Highway Authority of India (NHAI) in 2018 had fetched INR 9,681 crores in first batch of nine highways projects totalling 681 km of roads in Andhra Pradesh and Gujarat. However, the second batch of 586 kilometers was cancelled in February 2019 due to poor response.

NHAI has set the floor price at INR 4,995 crore for the 566-km bundle and INR 4,056 crore for the 404-km basket. According to a Financial Express report, NHAI would soon invite requests for proposal (RFPs) for two TOT tranches, measuring a total of 970 km, hoping to garner at least INR 9,000 crore through this model in FY20.

Of the two projects to be bid out under TOT model now, one is a basket of nine highway projects totalling 566 km spread across Uttar Prdesh, Gujarat, Andhra Pradesh and Jharkhand. The RFP for this, would be issued within a week. Tender for another asset comprising eight highway stretches spanning 404 km is expected to be issued in a month.

Road Transport and Highways Minister Nitin Gadkari said: “We are planning to rope in an Indian expert with experience in the kilometres global economy for advising NHAI on asset monetisation of including identified 3000 km of road.”

Plans are also afoot to make the vehicle scrapping policy more attractive, besides expediting the land acquisition process to create a network of expressways and highways. The advisor, apart from asset monetisation, will guide the National Highways Authority of India (NHAI) on innovative ways to meet funding requirements, he said.

Under TOT Public funded wherein the right of toll collection are assigned for a lease of 30 years to the investor against upfront payment of a lump sum amount to NHAI. The government now plans to offer 550 km of roads under TOT. Apart from asset monetisation, the government will attract private players into highways building and has already identified 3,000 to be bid out under the build operate and transfer (BOT) mode.

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