NHAI asset monetisation: Cabinet approves TOT model for national highways

The government on Wednesday approved amendments proposed to the toll-operate-transfer (TOT) model for national highways. The Cabinet Committee on Economic Affairs (CCEA) has given its approval to the amendments proposed in the TOT model by the National Highways Authority of India (NHAI), Finance Minister Nirmala Sitharaman said.
 
Public-funded national highway projects that are operational and have toll revenue generation history of one year after the commercial operations date (COD) will be monetised through the TOT model, Sitharaman said after the CCEA meeting. The monetisation will be subject to approval of the competent authority in the Ministry of Road Transport and Highways or NHAI on a case-to-case basis, she said.

 
The corpus generated from proceeds of such project monetisation will be used by the government to meet its fund requirements regarding future development and O&M (operations and maintenance) of highways in the country.
 

The model would facilitate efficient toll realisation through private sector.
 
Around 75 operational national highway projects have been identified for potential monetisation using the TOT model, and bundled into 10 separate bids to attract economics of scale for the private sector. This approval would ensure a wider set of assets for monetisation and providing a more attractive model for the investors. Further, the fund generated from such monetisation will be utilised for development/O&M of highways.

 
The approved TOT model authorised NHAI to monetise public-funded national highway projects, such as EPC/BOT (annuity) projects, which are operational and have a proven toll collection history of at least two years.
 
The approved TOT model provides for a fixed 30-year concession period, she said.
 
NHAI has already monetised one bundle of projects under TOT model, generating a revenue of ~9,681.50 crore for the government. However, the second bundle saw deviation in the market valuation of assets from NHAI’s valuation.