The government will allow collection of public funded highway projects by leasing out to private players for toll collection, in order to achieve economies of scale, synergy in operations and it is expected to create a framework for attracting long term institutional investment on the strength of future toll receivables. The fund generated from such monetization shall be utilized for development of national highways in the country, which would benefit highway users throughout the country.
The development comes in the wake of the Cabinet earlier this month giving nod to a proposal from the Road Transport and Highways Ministry to monetize public funded national highway projects that could gather funds in the range of Rs 80,000- 1 lakh crore initially. This approval would ensure better operations and maintenance (O&M) of public funded NH stretches resulting in enhanced quality of service for national highway users across the country.
The portfolio of this projects would be prepared on the basis of geographical proximity that would be leased out to institutional investors under toll operate transfer (TOT) model. Around 75 operational NH projects completed under public funding have been preliminarily identified for potential monetization using the TOT Model.
Under the policy, infrastructure developers, private equity firms and institutional investors like pension and wealth funds along with the local operation and management partners can take up completed highway stretches. The government has lined up around 104 highway projects to be leased out. These national highways have been constructed by the National Highways Authority of India (NHAI). Road transport and highways ministry expects a minimum investment of around Rs 75,000 crore in these projects.