NEW DELHI: The lull in the use of Toll Operate Transfer (ToT) mode of monetisation of highway assets could end soon, with a change in approach for future bids. The new bids will offer smaller bundles of highways of up to Rs 1,500 crore for bidding to private investors, which will increase competition and proceeds of the National Highways Authority of India (NHAI) and the government, a senior official said.
A virtual pause was put on ToT mode of monetisation by the ministry of road transport and highways, as it felt that the yield per km of highways monetised through ToT, was less than those given to investors through Infrastructure Investment Trust (InVIT). The ministry has sought a comparative review of both modes of monetisation.
As monetisation targets are high and the government cannot depend on just InVIT for results, ToT would continue, the official added. Since 2023-24 the NHAI has been offering two bundles at one for bidding through ToT – a smaller one and a larger one. The smaller bundle typically had assets valued at around Rs 1500 crore while the bigger bundle had roads which in some instances saw winning bids of over Rs 6,500 crore.
Because of the pause only one monetisation through ToT was made possible in the last financial year. Highway Infrastructure Trust (HIT) sponsored by a Singapore-based arm of global investment firm KKR was awarded two stretches of highways of 251 km length by NHAI after emerging as the highest bidder with an offer of Rs 6661 crore.
The money raised through ToT is collected by NHAI and transferred to the government. These funds then come back to NHAI for capital spending. The company who bids the highest gets the right to collect toll fees on those stretches for 20 years. During that period the concessionaire also has to maintain and operate the stretch.
Another round of monetization of 124 km of highways through ToT was put on hold even after the financial bids were opened. Then there is another bundle for which bids have come but no action has been taken pending the review.
The official did not say anything about the fate of the bundles for which bids are already in and two bundles for which bids are open even now.
Due to the pause in ToT the NHAI could raise only Rs 6,661 crore through ToT last year against the target of Rs 15,000 crore. Through National Highways Infrastructure Trust (NHIT) Rs 17738 crore was raised last year.
For this financial year the monetisation target has been set at Rs 30,000 crore by the ministry in the Union Budget, but the detailed review is on between NHAI and the government on whether it can be pegged higher.
Source: The Financial Express
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