The Union Cabinet on Wednesday approved amendments in the Toll-Operate-Transfer road monetisation model of National Highways Authority of India. The Cabinet has now allowed NHAI to monetise under TOT all those public-funded national highway projects which are operational and have toll revenue generation history of one year after the Commercial Operations Date. Earlier, the highways had to be operational for at least two years to enable participation in TOT.

CNBC-TV18 exclusively reported this on September 13.

The Cabinet has also decided to allow NHAI to bring flexibility in the concession period in order to woo more investors. As against a concession period of 30 years, the Cabinet has decided to allow NHAI board to decide on a period in the range of 15-30 years on a case by case basis.

"NHAI also gets authorised to carry the concession period from 15 to 30 years depending on how it is convenient. A detailed proposal of every TOT bundle including the proposed project stretches, estimated concession value, proposed concession period to be approved by NHAI board," finance minister Nirmala Sitharaman told reporters while briefing on the decisions of the Union Cabinet.

NHAI has also been allowed to raise long-term finance from banks by securitizing user fees-received from plazas as alternate modes of asset monetisation, Sitharaman added.

The government has identified around 75 operational highway projects for potential monetization using the TOT Model. These have been bundled into 10 separate bids.

While the first TOT bundle comprising nine project stretches aggregating to a length of 680 km exceeded the expectations of the government with Macquarie winning the bid at Rs 9,691 crore as against the expectation of Rs 6,258 crore, the second TOT bundle of 584 km failed as the bids received were lower than the reserve price.

The third round of TOT for road length totalling 566 km garnered bids from three players. CNBC-TV18 reported exclusively on Wednesday that Singapore-based Cube Highways and Infrastructure emerged as the highest bidder on TOT-3 with bid of Rs 5,011 crore. The highest bid is 0.3% higher than the reserve price of Rs 4,995.48 crore.

First Published:Nov 21, 2019 7:41 AM IST