The National Highways Authority of India (NHAI) has announced to release its second bundle under the highways’ toll-operate-transfer (TOT) scheme to effectively monetize 586.55 kilometers of national highways. In fact, the authority has decided to select eight stretches of national highways across different states – Gujarat, Rajasthan, West Bengal and Bihar to put on auction. NHAI is ready to acknowledge the bids till November 5 for various selected highways.
TOT is one of those few mechanisms that has been adopted by NHAI where the authority auctions operational assets. The important point to note is that the top bidder would require to pay the money (bid amount) upfront with NHAI and the authority can make use of this capital to further invest in the creation of newer highways. However, against the money, the bidder has got the right to work and preserve the highways via toll collection.
Recently, this year in the month of March, NHAI has auctioned the first package of 648 kilometers. The Authority mopped up Rs 9,681.5 crore from joint ventures of Macquarie and Ashoka Buildcon, who took the right to run and keep up nine stretches. Apart from all these, NHAI had also fixed the initial projected concession worth at Rs 6,260 crore. In the second round of bidding, the initial estimated concession cost was decided at Rs 5,362 crore.
The Cabinet Committee on Economic Affairs had approved and gave permission to NHAI in 2016 to further raise the funds via asset monetization program. The authority has also recognized 75 selective highway projects that could be put up from auction.