NHAI mulls Toll-Operate-Transfer rebid after poor response

NHAI mulls Toll-Operate-Transfer rebid after poor response

National Highways Authority of India (NHAI) is considering putting the second package of Toll-Operate-Transfer (TOT) for rebid after tepid response, which may impact the sale of subsequent TOT packages.

"Undesired" response from the industry has prompted the authorities to discuss whether the second TOT package should be put through the entire auction process.

The process would take a few months from start to finish.

"We haven't taken a decision if we should put the second TOT bundle with eight highway assets for re-auctioning or not. However, the response to this package hasn't been as per our expectations," a NHAI official told DNA Money.

The second package of eight road assets spanning 586 kilometre of national highways in Rajasthan, Gujarat, Bihar and West Bengal had a base bid price of Rs 5,362 crore for the toll collection period of 30 years.

Singapore-based Cube Highways, IRB Infrastructure Developers and Adani Group-Prakash Asphaltings & Toll Highways India Ltd had submitted their quote of Rs 4,612 crore, Rs 3,675 crore and Rs 2,718 crore, respectively. The highest bid by Cube Highways turned out to be even below the base price set by the NHAI, which is in contrast to the huge response received by the first bundle.

"In the next couple of weeks, we may decide if we want to rebid the same package or accept Cube Highways's offer and start working towards putting the third bundle for auction," said an official requesting anonymity.

In February 2018, NHAI had received four quotes for the maiden TOT package from Ashoka Buildcon-Macquarie, Brookfield, Roads-National Infrastructure Investment Fund and IRB Infrastructure Developers-Atlantia. Ashoka Buildcon-Macquarie had emerged as the highest bidder with their bid of Rs 9,681 crore as against the reserve price of Rs 6,258 crore, which was around 55% higher than NHAI's expectations.

As reported by DNA Money, industry observers were of the view about the possibility of poor response to the second TOT package. The main reasons included a liquidity crunch due to non-banking finance company (NBFC) crisis and low toll collection fears.

The government had extended the deadline for this package twice, from November 5 to December 5 and later to December 19. The bid was floated in August 2018.