NHAI woos investors for toll-operate-transfer projects

Our Bureau New Delhi | Updated on August 02, 2019 Published on August 02, 2019

The government is encouraging National Highways Authority of India (NHAI) to bid out more and more projects for toll-operate-and-transfer (ToT).

Lack of willingness of locals to pay tolls; and law and order situation, among others, are some of the issues to be taken care to increase the investor interest. This emerged in an interaction of NHAI with its potential investors, who NHAI is trying to woo to bid for ToT projects.

NHAI organised a road show on Friday for the third phase of ToT project for prospective bidders. The third bundle of ToT comprises nine stretches traversing a total length of approximately 566 km in Uttar Pradesh, Bihar, Jharkhand and Tamil Nadu.

This phase would require the investors to spend lower amount of money in developing the road stretches for tolling compared to what was required in the first two bundles that were offered for bidding. Several investors asked if the concession period could be lowered from the present level of 30 years, and some also asked if there could be smaller projects.

The Ministry’s push to make electronic tolling compulsory at all toll booths by December 1 will bolster the toll collection of several road stretches on offer as it would also prevent toll revenue leakages, indicated Nagendra Nath Sinha, Chairman, NHAI.

Citing Road Minister Nitin Gadkari’s statement in Parliament, Sinha reiterated that the projects are likely to be more attractive as the toll revenue receipts received will be higher than what is captured in say one year or so when the extent of cash-based collection is high.

At present, about 30 per cent of toll collection transaction happens electronically, Sinha said. This means nudging the remaining 70 per cent of toll road users to adopt electronic methods of paying toll.

Public issue

NHAI, which is planning an Infrastructure Investment Trust (InVIT) issue, will also have a public issue component. Investors with lower risk appetite can bid for NHAI through Infrastructure Investment Trusts (InVITs), for which NHAI has sought a Cabinet nod, said Sinha.

“Some amount of the NHAI’s InVIT issue will have a public offering, with remaining for the private,” said Asheesh Sharma, Member-Finance, NHAI, responding to another query.

Published on August 02, 2019
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