The deadline has been extended from September 11 to September 30 for parties to bid for the National Highways Authority of India’s (NHAI) third bundle of highway projects under the toll-operate-transfer (TOT) mode. The authorities are aiming to gain a straight Rs 4,995 crores from nine stretches measuring 566.27km, on offer.
NHAI had initiated requests for proposals (RFPs) on June 13, 2019. On the request from the potential bidders who claimed that to complete proper due diligence, would stretch the indicative timelines proposed earlier and thus the deadline got extended. Under the previous timeline, NHAI was supposed to declare qualified bidders by October 11. Financial bids were to be opened in the first week of October. LoA would be issued within December 11, 2019.
Around a dozen firms, both domestic and foreign, including Macquarie, Brookfield, Roadis, Adani and IRB Infrastructure, had initially evinced interests to take on long-term lease nine highways stretches spread across Uttar Pradesh, Bihar, Jharkhand and Tamil Nadu. NHAI will hold a roadshow for these stretches on September 9 in Mumbai.
Sources said Cube Highways, L&T, NIIF, MEP Infrastructure and Autostarde had also given RFP documents and attended pre-bid meetings with the authority.
Under the TOT model, publicly-funded operational highway projects are given on a long-term lease basis to domestic and foreign “patient capital” investors. Successful bidders are required to pay the lease amount upfront and can recoup their investments and returns by collecting toll over the lease tenure of 30 years.
For the first time in October 2017, NHAI had invited bids for such public-funded highway projects. In the first tranche, nine highway projects were offered and Australia-based Macquarie bagged them quoting Rs 9,681.5 crores for the total length of 680.5 km against the floor price of Rs 6,258 crores.
NHAI’s second TOT attempt, however, failed. Against its floor price of Rs 5,632 crores from eight highway projects with a total length of 586.55 km, the highest bidder (Cube Highways) quoted only Rs 4,612 crores, forcing the authority to abandon the plan. Asset recycling of this kind is being tested in India, following many global precedents.
In the first tranche, Macquarie and Ashoka Buildcon had bid together while Brookfield bid it solo. IRB Infrastructure and Autostarde bid in a consortium. Roadis and NIIF also joined hands in the first tranche.
A fourth tranche is also likely to come in the current fiscal. In the fourth tranche, 404 km is on offer and the authority is likely to keep the reserve price at Rs 4,056 crores. RFP for the fourth tranche is likely to be issued by September-end. Tolls are currently being collected by NHAI in all these stretches.
The Cabinet Committee on Economic Affairs had in 2016 allowed NHAI to monetise 75 highway projects through the TOT model.
Crisil had earlier estimated that NHAI can raise about Rs 60,000 crores through monetisation of these highway stretches.
Source: Financial Express
