The government's bid for monetisation of highway projects started on a strong note as Singapore's Macquarie clinched the maiden bundle of projects on offer for Rs 9,681.5 crore, a top official said today.
The amount offered is 1.5 times higher than the estimates of NHAI.
The Road Transport and Highways Minister Nitin Gadkari has yesterday said that monetisation of 105 road projects can easily fetch Rs 1.25 lakh crore and there is no dearth of funds for building highways.
"MAIF Investment of Singapore (Macquarie) has won the ToT bid. Against NHAI s expectations of Rs 6,258 crore, the winning bid is Rs 9681.5 crore. We are happy that market has valued our assets one and a half times higher than our expectations. This bodes well for asset recycling to be used as a key resource generator for financing infrastructure in India," Member Finance NHAI, Rohit Kumar Singh said.
The National Highways Authority of India (NHAI) had received four bids for the first bundle of nine projects to be monetised under the toll-operate-transfer (TOT) model from -Brookfield, Roadis NIIF (National Infrastructure Investment Fund) and IRB Infrastructure.
Singh said the bidding process has been completed for the first round of monetisation of public funded national highway projects under TOT model.
Brookfield had quoted a sum of Rs 7,511 crore, IRB an amount of Rs 6,930 crore and Roadies-NIIF JV Rs 6,611 crore, Singh said.
He said the funds generated from monetisation of highways to be used for new infrastructure programmes like Bharatmala, a Rs 7 lakh crore ambitious road building imitative announced by the government recently.
The first bundle for monetisation, released by NHAI in Oct 2017 covers 9 stretches five highways running across Andhra Pradesh and four in Gujarat. The government had assessed the asset condition through drone videos and network survey vehicles.
The Cabinet in 2016 had authorised NHAI to monetise public funded National Highway projects. 75 operational NH projects completed under public funding had been identified for potential monetisation using the TOT Model.
TOT model in India has been developed to encourage private participation in the highways sector.
The TOT model has the concessionaire paying a one-time concession fee upfront (lump sum), which then enables the concessionaire to operate and toll the project stretch for the pre-determined 30 year concession period. This model is applicable to EPC and BOT (Annuity) highway projects, which have completed at least 2 years since date of completion.
The model, as per officials, addresses the risks associated with such a long concession contract and there are multiple provisions in the model concession agreement, which are designed to take care of eventualities like roadway expansion, high toll traffic variation etc to ensure that concessionaires are not exposed to undue risks.
Around 75 operational NH projects completed under public funding have been preliminarily identified for monetisation using TOT model.
As per the Economic Survey, India will need about USD 4.5 trillion in the next 25 years for infrastructure development, of which it will be able to garner only about USD 3.9 trillion.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)