Australia-based capital fund manager Macquarie and joint venture partner Ashoka Buildcon secured nine operational highway projects from the National Highways Authority of India (NHAI) on a toll-operate-transfer (TOT) basis.
The nine highways are in Andhra Pradesh and Gujarat and stretch across about 680 kilometres. This is the first time that the government has auctioned completed projects under the TOT model to monetize assets.
“The TOT model is a great initiative undertaken by the central government,” said Anjan Dasgupta, senior partner and head of the finance and projects practice at HSA Advocates.
“Success of the first round of bidding under this model has proved that there is good private finance appetite for operational infrastructure projects. This paves the way for the financing of such projects by the government through the use of public finance during the construction phase, when the risk is significantly higher, and thereafter, monetizing the constructed assets for an upfront premium during the operational phase.”
NHAI received four bids for the highways from, Brookfield (₹75.1 billion, US$1.1 billion), Macquarie and Ashoka Buildcon (₹96.8 billion), IRB and Autostrade (₹69.3 billion) and Roadis and National Investment and Infrastructure Fund (₹66.1 billion). Macquarie’s offer was 54% higher than what the NHAI had predicted it would generate.
NHAI will hand over the highway projects to Macquarie for toll collection, operation and maintenance for 30 years and take over the projects after this period.
HSA Advocates advised NHAI on the deal. The team was led by Dasgupta along with partner Deepak Kumar Thakur.