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The National Highways Authority of India (NHAI) has postponed the deadline for submitting bids for the second bundle of Toll-Operate-Transfer (TOT) projects for the second time due to a tepid response to the offered road stretches, according to sources.
The new deadline for bid submission is December 19. NHAI had invited bids for the second TOT batch in August with a November 5 deadline for submitting bids, which was postponed to December 5 as the agency wanted to have better responses from the industry.
“The current package is not as attractive as the first one while in terms of valuation NHAI has kept it the same. Therefore it remains to be seen whether it will generate the same kind of interest,” Shubham Jain, Vice President, ICRA, told BusinessLine .
The second TOT batch consists of eight stretches of national highways in Rajasthan, Gujarat, Bihar and West Bengal with total length of 586 km. The package has 12 toll plazas across four highways. NHAI has set a base price ₹5,362 crore for the second batch.
The base price for the first batch comprising nine road stretched with total length of 648 km — won by Macquarie earlier this year — was around ₹6,258 crore. Macquarie had quoted ₹9,681 crore, which was 1.5 times more than the NHAI ’s initial estimate.
Industry watchers believe it is unlikely that the second TOT batch will see considerable inflation of the base price.
Poor choice
An industry player told BusinessLine NHAI has not selected the packages for the second TOT batch very well. For example, one of the stretches lies in so-called “chicken neck” — a narrow strip of land between Bangladesh and Assam, which is a highly secured area, and one that can at any point of time face security concerns.
Considering that under TOT the government gives 30-year concessions, and considering that the foreign long-term investors such as pensions funds or sovereign funds are most likely to bid for TOT, including areas of strategic importance is not a great idea, the person said.
Industry analysts note that the companies likely to bid for the new TOT batch include Cube Highways, Global Infrastructure Partners, and Brookfield Asset Management as well as domestic players such as IRB Infrastructure and L&T IDPL.
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