The government is ready with its first bundle of completed public-funded highway projects worth approximately Rs 60,000 crore that it plans to auction in December to domestic as well as international sovereign wealth funds for operation and maintenance.
Commerce minister Nirmala Sitharaman will be attending India-UAE Buisness Forum meet in Abu Dhabi on Monday with a delegation of officials from infrastructure ministries, where these completed highway projects would be showcased before investors.
Scouting for funds to finance its ambitious highway expansion plan, the road ministry has finalised a list of 104 projects that would be auctioned for 30 years. “We plan to bid completed projects in bundles of five-six. The length of the first such bundle of highway project is around 6,000 km,” said a highways ministry official.
The highest bidder would have to pay the project cost upfront to the government, while the buyer would be given the toll collection rights on the highway stretch that will be auctioned. The highways ministry is planning to fix 8-10 times the toll collected now from such projects as the upfront payment.
“This is not a distress sale, only a way to leverage funds for future expansion of highways,” the official added. The ministry plans to invest Rs 5 lakh crore to expand its highways network in the next five years.
Sovereign pension funds, including those from UAE and Singapore, are looking at assured returns from long-term investment. Completed highway projects fit their bill as they are risk free, said the official.