The Centre is likely to float its first bid for management of projects under the toll-operate-transfer (TOT) route within the next three months.
The TOT route – often called asset recycling – is a unique asset monetisation exercise. Around 75 operational projects (or roads) set up with public funds will be handed over to private players. The Centre is looking to raise close to Rs. 50,000 crore through this monetisation model.
According to Rohit Kumar Singh, Joint Secretary, Ministry of Road Transport & Highways, the Centre will target global funds with patient capital, including pension funds and sovereign funds from West Asia, among others.
Contracts will come in bundle form – a number of road projects – being clubbed together. Around Rs. 1,200 crore may be raised in the first tranche.
“Within the next three months the first such bid is likely to be floated. We expect around Rs. 1,200 crore; but this is a rough estimate,” he said on the sidelines of an infrastructure seminar organised by the Bengal Chamber of Commerce and Industry (BCC&I)
Singh, however, said the “bundles” and draft guidelines have not yet been finalised. The monetisation programme has been cleared by the Cabinet. The model concession agreement and RPF documents are being finalised and will soon be taken up by the Ministry of Finance for clearances.
Under the TOT model, roads will be given for a 30-year lease period. They will include projects which have been operational and generating toll revenues for at least two years. The payment for the lease will have to be made “upfront”.
The bidders will recoup their investments by collecting toll over the lease tenure.
According to Singh, around 20 global funds, including Nomura, Macquarie and Abu Dhabi Investment Authority, are expected to participate in the bidding process. Ron Hextall JerseyShare This