E-Paper
NHAI’s TOT 5 bundle set to see many bids
NHAI had put up two road assets on sale at the end of September under the latest round of the toll-operate-transfer (TOT) mechanism. Both toll roads are located in Gujarat.
Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ), I Squared Capital’s roads platform Cube Highways and Edelweiss Yield Plus Infra Fund are among investors weighing bids for the fifth bundle of road assets put up for sale by the National Highways Authority of India (NHAI), two people aware of the development said.
NHAI had put up two road assets on sale at the end of September under the latest round of the toll-operate-transfer (TOT) mechanism. Both toll roads are located in Gujarat.
The roads would be offered for 20 years during which the concessionaire would need to operate and maintain them while having the right to collect user fees as per the prescribed rates.
“While the initial deadline for bids was set for December 23, it has been extended to January 18 as the interested bidders had sought for more data. Cube, CDPQ and Edelweiss are evaluating the bundle and are likely to put in bids for the same,” said one of the two people cited above, requesting anonymity.
“This bundle is smaller than the ones that have been sold so far under the TOT process; so, many bidders are expected to turn up for these projects. The last bundle had struggled to find enough takers even after its size was reduced by half. They are still working out the best model for TOT, and hence they are now trying smaller batch sizes,” the person said.
In September, NHAI withdrew the sale of the TOT 4 bundle, which was first put up for bids in November 2019 with a concession value of ₹4,200 crore but was later almost halved to ₹2,200 crore.
CDPQ declined to comment. Emails sent to Edelweiss and I Squared Capital did not elicit a response. Through the TOT programme, NHAI offers already operational national highways to private entities on long-term concession basis. This model was introduced to encourage private participation in the roads sector and garner more resources for the construction of highways.
So far, two bundles of operational toll roads have been sold under the TOT programme.
For TOT 5, NHAI has not disclosed a reserve price for the bids, a practice which it has adopted recently.
