At least half a dozen firms, including Canadian institutional investor CDPQ and Singapore-based Cube Highways, have submitted bids to take on the long-term lease around 160-km highway stretch offered by the National Highways Authority of India (NHAI) against upfront payment through the toll-operate-transfer (TOT) route.
Among the domestic firms which have submitted technical as well as financial bids are IRB Infrastructure, Adani, Prakash Asphalting & Toll Highways (PATH) and the Nagpur-based D P Jain. While the technical bids were opened on Tuesday, the financial bods of the technically-qualified bidders will be opened in a fortnight, a source in the authority said.
Under the TOT model, operational highway projects are given on a long-term lease (15-30 years) to private entities on a long-term concession basis against an upfront payment. During the concession period, the TOT operator collects user fee on the stretches following the prescribed rates by the NHAI to recoup their investments; but the operator has to operate and maintain the stretches.
Under the fifth round of TOT, NHAI is offering a 20-year lease period for two bundles with a total length of 159.5 km. The last date for submission of the bids for both the bundles was January 18.
Just a few days ahead of inviting bids for the fifth bundle, the NHAI decided not to disclose floor price for highway bundles under the TOT model at the time of inviting bids; it would rather leave it for the potential bidders to discover the price. The floor price or the initial estimated concession value (IECV) will be disclosed only “after receipt of technical bids and after declaring the selected bidder”. The highest bidder will take the bundle on a long-term lease.
NHAI’s first public-funded highway asset monetisation programme through the TOT model fetched the authority Rs 9,681 crore — 1.5 times higher than the base price set by it in 2018. None of the bidders matched up the floor price of Rs 5,632 for 586.55-km length in the second bundle, forcing NHAI to abandon the plan. Cube Highways quoted just a little above the IECV to emerge as the highest bidder for the third bundle. The fourth bundle was annulled.
The proceeds from the asset monetisation programme are used to repay NHAI’s debt, which mounted to Rs 2.72 lakh crore, as on November 2020, and to develop highways.
