Govt seeks bids for 8 projects under 2nd round of NHAI’s toll-operate-transfer scheme

The ministry of road transport and highways has invited bids from private companies to hand over eight projects of National Highways Authority of India under the toll-operate-transfer mechanism. The projects collectively carry a base price of Rs 5,362 crore and cover a stretch of 586.55 km. The bids have to be submitted by November 5.

This is the second round of the scheme. The first, under which the government auctioned nine roads covering 681 km, fetched the government Rs 9,681 crore, 1.5 times the base price. The ministry has so far identified 75 highways for monetization.

Of the eight projects on offer in round 2, two are in Rajasthan, one in Gujarat, one shared between Rajasthan and Gujarat, one in Bihar and three in West Bengal.

Under the scheme, the government gets a lump-sum upfront while the private concessionaire gets an-already operating asset for 30 years. It has to fulfil the operation and maintenance obligations but is free from the hassle of any capacity expansion that may be needed later — a job that will be executed by NHAI.

A long-term concession period of 30 years and an operating asset were the twin factors that attracted Macquarie, Suresh Goyal, its India Head and Senior Managing Director told Moneycontrol. He said the bank had an appetite for more such projects as well as other infrastructure assets in India.

The 9-road bundle under the first round has been handed to a consortium of Macquarie-Ashoka Buildcon-Yes Bank. Macquarie has invested Rs 4,181 crore as equity in the project. The investment by the Australian bank has come through its Macquarie Asia Infrastructure Fund II, a $3.3 billion fund that invests in roads, airports and other infrastructure projects.

Yes Bank is the lead arranger and has committed Rs 5,500 crore to the projects. It also did the pre-bid underwriting and may downsell some exposure to other banks at a later date, Vinod Bahety, Group President and National Head of Corporate Finance Infrastructure Banking at the Rana Kapoor-promoted bank told Moneycontrol.