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

You can switch off notifications anytime using browser settings.
The Economic Times
Stock Analysis, IPO, Mutual Funds, Bonds & More

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

, ET Bureau|
Updated: Jun 14, 2019, 06.38 AM IST
Under the TOT mode of the asset monetization plan, investors make a one-time lump sum payment in return for long-term toll collection rights.
New Delhi: The National Highways Authority of India (NHAI) has invited bids for the third bundle of toll-operate-transfer (TOT) auctions, looking to raise a minimum of Rs 4,995 crore as it gets cracking on the asset monetisation programme of the Indian government.

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.



Also Read

NHAI plans land appreciation taxes to finance projects

NHAI in talks to make BOT projects attractive

NHAI appeal in SC for highway land sparks furore

NHAI in talks with LIC to raise Rs 25,000 crore

Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for Live Elections News & Results, Latest News in Business, Share Market & 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