In a bid to put the government's asset monetisation plan on fast track, the govt has decided to offer 550 km of roads to private firms to operate and collect toll charges. The National Highways Authority of India (NHAI) will invite bids for the roads under the toll-operate-transfer (TOT) plan in Tamil Nadu, Uttar Pradesh, Bihar and Jharkhand next month, expecting to fetch about Rs 5,000 crore.
"Details of the third round of auctions are expected to be finalised soon and bids will be invited in a month," an official told The Economic Times.
The Modi government introduced the TOT model in 2016 to monetise publicly funded highways. Under the programme, the long-term toll collection rights are sold to investors in return for one-time lump sum payment.
The current TOT offers a 30-year lease. The government has adopted the TOT model to help raise resources in the sector and attract private funding, which has remained subdued. The first round of TOT auctions for 680 km of highways ended in February 2018, which fetched the government over Rs 9,000 crore.
The Macquarie Group won the auction with a bid of Rs 9,681 crore against NHAI's estimated value of Rs 6,258 crore. Brookfield Asset Management, IRB Infrastructure and Roadis-National Investment and Infrastructure Fund were among the other bidders.
However, the second auction was cancelled in February 2019 after it drew a lukewarm response. Cube Highways, a toll road operator backed by I Squared Capital and International Finance Corporation, bid Rs 4,612 crore against the base price of Rs 5,362 crore. Bids were also received from Adani Infrastructure and IRB Infrastructure in the auction.
The expectations of bidders and the government in the second round did not match, the official said. The NHAI, which has made changes to the TOT framework, expects the third round to succeed after to make it lucrative for the private sector.
It had initially planned to re-bundle the 586 km stretches offered in Rajasthan, Gujarat, West Bengal and Bihar in the second round, but decided to offer fresh assets in the third round. "We are coming out with new stretches. A decision will be taken later as to how to re-bundle TOT round 2," the official said.
Edited by Aseem Thapliyal