Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
11,858.10-79.4
Stock Analysis, IPO, Mutual Funds, Bonds & More

Government plans to tweak highway auction norms

While the proposal to tweak conditions for auctioning of completed highway stretches to make them attractive for investors and allowing NHAI to securitise the future flow of toll revenue of already operational stretches with banks and financial in...

, TNN|
Updated: Nov 19, 2019, 11.25 AM IST
0Comments
traffic
(Representative image)
(This story originally appeared in on Nov 19, 2019)
NEW DELHI: The government is likely to approve three proposals this week to improve NHAI’s fund flow for taking up highway stretches. While the proposal to tweak conditions for auctioning of completed highway stretches to make them attractive for investors and allowing NHAI to securitise the future flow of toll revenue of already operational stretches with banks and financial institutions to get upfront lump sum amount would be considered by the cabinet, sources said the government is also likely to allow NHAI to float its infrastructure investment trust (InvIT).

TOI has learnt that the highways ministry has sought approval to amend two conditions for auctioning the operational NH stretches under the Toll-Operate-Transfer (TOT) model. It has proposed to fix the tenure of the auction period from 15 to 30 years instead of 30 years at present. The second proposed change is to allow bundling of projects, which have been completed and are operational for more than a year. Currently, only projects completed before two years are put together for auction in a region under TOT.

NHAI has so far auctioned only one bundle of projects under TOT and bids for another bundle are under evaluation. Sources said though TOT was aimed at getting more foreign fund, NHAI had found that there was greater participation from Indian investors than foreign players during auction of the first bundle. Macquarie which had bagged the first TOT bundle could get loans for 20 years only, sources said.

“It’s proposed that the concession period should be flexible. We have set the target to auction about 25,000 km in the next fiveto-six years to raise nearly Rs 90,000 to Rs 1 lakh crore,” said a source. In case of the TOT projects, the private player gives an upfront amount after assessing the future toll revenue to NHAI and it collects the toll to recover the investment.

So far as the proposal for floating InvIT is concerned, the highways ministry has sought approval for authorising NHAI to monetise completed and operational NHs though InVITs where toll collection record is available for at least one year. It has proposed authorising NHAI to incorporate SPVs and authorise NHAI chairman to select projects to be put under each SPV.

Also Read

Government eyes Rs 1 lakh crore in highway auction

Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service