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New Delhi: The 135-km Eastern Peripheral Expressway, Chenani-Nashri, the longest highway tunnel in Jammu and Kashmir and the 326-km Hyderabad-Bengaluru stretch are among the 104 national highways that the government has approved to decongest Delhi by 2022 and beyond. Beach is recognized for monetization. Under the 2025 National Monetization Pipeline.
Spanning 26,700 km, they make up about 22 per cent of the total National Highways (NH) – estimated to be around 1,21,155 km – excluding networks operated by the private sector under build-operate-transfer (toll)-based PPP concessions .
According to the asset pipeline prepared by the federal think tank NITI Aayog, the total nominal monetization value of listed road properties is estimated at Rs 1.6 lakh crore. The road ministry will monetize the entire NH stretch through two modes – Toll Operate Transfer (TOT), which is in use since 2018, and Infrastructure Investment Fund (InvIT).
However, the monetization exercise carried out by the ministry so far through the TOT mode – where completed, publicly funded road projects are auctioned for a period of 30 years in lieu of advance payment to a private developer – has been undertaken by the private sector. There has been mixed response from investors.
Under the TOT model, in lieu of upfront payment, the private investor gets the right on the toll and operates and maintains the NH for the entire period of the concession period.
As per the asset pipeline for the road sector prepared by NITI Aayog, both existing operational NH assets and new NH roads, which will be constructed and operationalized before 2025, have been considered.
A senior NHAI official told ThePrint, “All road properties selected by the Union Ministry of Road Transport and Highways are of four lanes and above and are publicly funded, where NHAI reserves tolling rights.”
Read also: Despite lockdown, National Highway construction reaches all-time high of 36.4 km/day in 2020-21
TOT model
The National Highways Authority of India (NHAI) has so far brought out five ‘packages’ of completed highway projects for monetization through TOT mode.
NHAI had received Rs 9,681 crore for the first package, which included nine projects totaling 681 km. This was 1.5 times the base price fixed by him. However, NHAI had to withdraw the second and fourth packages due to weak investor response.
The base price fixed for the second tranche of 586 km long projects was Rs 5,632 crore, while for the fourth package totaling 341.6 km, the concession price was Rs 4,200 crore. Failing to receive a response, NHAI reduced the concession price for the fourth tranche to Rs 2,200 crore, but ultimately had to scrap the bid.
The third package of TOT was awarded to Singapore-based bidder Cube Highways. It had placed a bid of Rs 5,011 crore.
The fifth package of highway projects auctioned in February through ToT also received bids worth Rs 2,252 crore against the reserve price of Rs 1,621 crore. Adani Enterprises and DP Jain & Company Infrastructure were the highest bidders for the fifth package, which was divided into two parts.
First tranche of NHAI InvIT expected by 2022
NHAI InvIT has been set up with the objective of monetizing completed and operational NH projects through alternative sources like capital markets and diversification of its investor base.
A new entity, National Highway Infra Investment Managers Pvt Ltd, wholly owned by NHAI, has been incorporated to act as the investment manager under the proposed InvIT transaction.
The Road Ministry expects the first tranche of NHAI InvIT transactions to be completed by the second or third quarter of the 2022 financial year, subject to market conditions and stabilization of toll revenue in the wake of the COVID pandemic. This installment is expected to cover 586 km of NH properties in Rajasthan, Gujarat, West Bengal and Bihar.
The nominal value of NHAI InvIT Fund raised from the current tranche is around Rs 5,000 crore.
(Edited by Mansa Mohan)
Read also: NHAI is a gold mine, it will never fall into debt trap: Highways Minister Nitin Gadkari
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