NHAI invites bids for third round of TOT auctions
Bids were invited on Thursday for a cumulative 566 kms of highway stretches in Bihar, Jharkhand, Tamil Nadu and Uttar Pradesh
Bids were invited for nine national highway stretches for a cumulative length of 566 km on Thursday.
The projects are spread across Bihar, Jharkhand, Tamil Nadu and Uttar Pradesh. EThad reported on May 25 that NHAI was looking to raise around Rs 5,000 crore under TOT round three in these states.
The government introduced the TOT model in 2016 to monetise publicly funded highways. Under the programme, investors make a onetime lump sum payment in return for long-term toll collection rights.
The concession period of the bids invited on Thursday is 30 years. The government, however, is looking to bring down the lease period under TOT projects to 15-20 years.
“For the current bid, the lease period is 30 years. But most likely, the next bundle onwards, we will offer packages in a mix of 15 and 30 years of lease period,” a government official told ET. The government is mulling the change to attract both long-term institutional investors as well as smaller developers who rely on bank funding, the official said.
The first round of TOT auctions garnered Rs 9,681 crore, against the initial estimated concession value (IECV) of Rs 6,258 crore set by the government.
The second round of auctions, however, was cancelled in February this year due to tepid response. “We have tried to keep the IECV realistic this time. We are hoping a good response on this bundle,” the official quoted above said. The government is pursuing the TOT model to attract private investment in the sector, which has hitherto remained subdued.