Following tepid response, NHAI scraps second round of TOT bids

National Highways Authority of India (NHAI) may merge highway stretches bid under second round of toll-operate-transfer (TOT) with other rounds of bidding after it decided to scrap the second round after tepid response from investors, sources told Moneycontrol.

According to sources, NHAI decided to reject bids received under second round of bidding after investors placed bids lower than their expectations.

For the eight highway stretches, Cuba Infrastructure had submitted highest bid of Rs 4,612 crore, lower than initial estimated concession (IEC) value of Rs 5,362 crore. Apart from Cube Highway and Infrastructure, Adani Infrastructure bid at Rs 3,675 crore and IRB Infra bid at Rs 2,718 crore.

Sources told Moneycontrol that NHAI could merge these stretches with highway stretches under other rounds of bids.

While one senior official refused to comment on the matter, member finance, Ashish Sharma, could not be reached for comment.

NHAI had invited bids for the eight stretches in August 2018 to be submitted by November 5, 2018. The period for submission was later extended twice till December 5 and December 19. These stretches include-

TOT is a mechanism adopted by NHAI where the authority auctions its operational assets (highways). The highest bidder deposits the money (bid amount) upfront with NHAI which is used as capital for construction of new highways. Against the money, the bidder acquires the right to operate and maintain the highways via toll collection for 30 years.

The Cabinet Committee on Economic Affairs gave green signal to NHAI in 2016 to raise funds through asset monetisation programme. NHAI has identified 75 highway projects that could be put up for auction.