Mumbai: The National Highways Authority of India (NHAI) has set the base price for the second package of toll-operate-transfer rights (TOT) auction of public roads at ₹ 5,362 crore. In an e-tender published on Monday, NHAI invited private players to participate in the auction for 8 stretches of operational toll roads totaling 586.55km across Rajasthan, Gujarat, Bihar and West Bengal. The base bidding price has been set ₹ 5,362 crore and the concession period is 30 years.
The last date to submit bids is 5 November.
Mint had on July 11 reported that the auction is likely to see participation of Cube Highways (a Singapore-based joint venture between I Squared Capital and World Bank’s International Finance Corp.) and Canada Pension Plan Investment Board (CPPIB), through its holding in Larsen and Toubro Ltd’s infrastructure investment trust IndInfravit.
The first auction of TOT projects in February included five highways in Andhra Pradesh and four in Gujarat—a total length of under 700km. Australian private equity investor Macquarie Group won the auction by bidding ₹ 9,681 crore against the initial estimated concession value (or base price) of ₹ 6,258 crore.
Brookfield Asset Management, IRB Infrastructure Ltd and the National Infrastructure and Investment Fund (NIIF) had also participated in the first round.
Detailed project reports are being prepared for two more bundles that will go under the hammer this year—479km of highways in Odisha, West Bengal, Assam and Bihar, and 658km of highways in Uttar Pradesh, Bihar and Jharkhand.
In total, the three tranches are expected to net a minimum of ₹ 13,500 crore for the exchequer.
The Cabinet Committee on Economic Affairs (CCEA) had in 2016 given NHAI the green signal to monetize operational highways under the TOT model by incentivising private capital to invest in roads.
Here, a concessionaire pays an upfront fee to buy the right to operate and earn from the toll roads for a fixed period of time. The model concession agreement provides traffic variations, road expansion and other risks that concessionaires may face.
NHAI has identified 75 operational highways that will qualify for the TOT model. The new round of auctions is a continuation of this monetisation programme. The government has set a target of raising ₹ 2 trillion via this route in the next five years.