NHAI floats third TOT bid after tepid second

National Highways Authority of India (NHAI) is looking to raise around Rs 5,000 crore as it has floated a global bid for the third bundle of Toll-Operate-Transfer (TOT).

Starting Thursday, the bids have been invited by the national highways developing, operating and maintaining agency. Under NHAI's TOT model, road assets are monetised by way of investors making one-time lumpsum payment in return for long-term toll collection rights. The highest bidder bags the bundle of road assets.

In all, nine road assets have been put in the third TOT package with a cumulative total of 566.27 km. These nine highways stretches are spread in Uttar Pradesh, Bihar, Jharkhand and Tamil Nadu.

The nine road assets are Jhansi-Lalitpur (Package-1), Jhansi-Lalitpur (Package-2), Lucknow-Raibareli, Kotwa- Muzaffarpur, Hazaribagh-Ranchi, Madurai to Kanyakumari (0 km to 52.3 km), Madurai to Kanyakumari (52.300 km to 116.5 km, Madurai to Kanyakumari (116.5 km to 180) and Madurai to Kanyakumari (180 km to 243.470 km).

As per the tender document, the estimated concession value has been put at Rs 4,995.48 crore.

NHAI "has decided to undertake Tolling, Operations and Maintenance of the 'National Highways' project bundle through Public Private Partnership on Toll, Operate and Transfer basis..." read the bid document.

Once again the package's concession period will be 30 years. The authorities were contemplating to reduce the concession period to 15 years, but it was not put into effect in this third round of bidding. Likewise, there were also plans to come up with smaller packages, but that too hasn't got reflected.

The tender bid submission deadline is September 11. Bids will be opened the next day, on September 12.

In April, Canada's pension fund subsidiary and highway concessions manager Roadis had partnered with India's infrastructure fund manager National Investment and Infrastructure Fund (NIIF) to create a platform for investments in the Indian road sector. The platform intends to invest $2 billion (over Rs 13,800 crore) to build the largest Indian road platform and are also looking participating in TOT auctions apart from acquiring concessions from the road developers.

In February 2018, the maiden TOT bid had helped NHAI raise Rs 9,681 crore, about 55% more than the reserve price of Rs 6,258 crore. It was bagged by the joint venture of Macquarie and Ashoka Buildcon. The other three participants included Brookfield, Roadis-NIIF and IRB Infrastructure Developers-Atlantia.

This maiden tender was a bundle of nine highway stretches (648 km in total) in Andhra Pradesh, Gujarat and Odisha.

The subsequent bid floated in August 2018, after several deadline extensions, received three bids in December. All of which were below the reserve price of Rs 5,362 crore. The highest quote of these three by Cube Highways was Rs 4,612 crore, which was 14% less than the reserve price.

Due to this 'undesired' response, the bids were scrapped. The second package included eight road assets with a cumulative total of 586.55 km in Rajasthan, Gujarat, Bihar and West Bengal.