The government plans to invite bids to lease out another 10 public-funded national highways to private operators soon to raise money to build more roads.
The road transport and highways ministry expects to rake in almost Rs 6,600 crore through this second round of leasing out government-owned operational national highways under the tolloperate-transfer (TOT) model, Rohit Kumar Singh, member finance, National Highways Authority of India (NHAI) told ET.
“The bids for the second tranche will be invited in April. The market has shown great appetite for investing in national highways. We are hopeful of attracting top global private equity and pension funds,” Singh said. “The packages that will be bid out are being identified.”
The government recently concluded the auction process for leasing out nine national highways in Gujarat and Andhra Pradesh. Sydney-headquartered Macquarie Group won the TOT bid of nine national highways with a total length of just under 700 km. The company placed the bid of Rs 9,681 crore, as against the government’s expectations of Rs 6,258 crore.
The TOT model has been developed to encourage private participation in the highways sector. Under the model, the concessionaire pays a one-time concession fee upfront, which in turn allows him to operate and toll the project stretch for the predetermined 30-year concession period. The model also includes the risks associated with such a long concession contract.
Funds generated from monetisation of highways will be used for new infrastructure programmes such as Bharatmala.