Macquarie JV wins first toll-operate-transfer contract with Rs9,681.5-cr bid

Australian firm Macquarie has emerged the highest bidder for nine highway projects that are being offered under the toll-operate-transfer (TOT) model, with a Rs9,681-crore bid.

A joint venture of Macquarie and Ashoka Buildcon has emerged as the highest bidder for the first batch of toll-operate-transfer (TOT) projects from NHAI.

Of the nine projects, five are in Andhra Pradesh while the remaining four are in Gujarat. Besides Macquaire, Brookfield, IRB Infrastructure and Roadis-NIIF were in the final round of bidding for these assets on long-term contracts.

Macquarie's winning bid is around 29 per cent higher than the second-highest bid placed by Canada's Brookfield and exceeds National Highway Authority of India's own expectation of Rs6,258 crore by one-and-a-half times.

The cabinet had in 2016 authorised National Highways Authority of India (NHAI) to monetise operational national highway projects using the toll-operate-transfer (TOT) model so as to monetise public funded roads.

With the successful auction of the first bundle of nine projects totalling 648 km, the government is in a better positioned to bridge the infrastructure investment gap, which the latest Economic Survey pegs at $526 billion in the next two decades.

"Against NHAI's expectations of Rs 6,258 crore, the winning bid is Rs 9681.5 crore. We are happy that market has valued our assets one and a half times higher than our expectations. This bodes well for asset recycling to be used as a key resource generator for financing infrastructure in India," said Member Finance NHAI, Rohit Kumar Singh. No wonder Road Transport and Highways Minister Nitin Gadkari felt emboldened to claim that the monetisation of 105 road projects can easily fetch Rs1.25 lakh crore and that there is no dearth of funds for building highways.

Apart from Macquarie, three other companies had thrown their hats in the ring for the first TOT bundle - Brookfield (with a bid of Rs 7,511 crore), Indian firm IRB Infrastructure (Rs 6,930 crore), and a joint venture between Roadis Infrastructure Holding and National Investment and Infrastructure Fund (Rs 6,611 crore).

The tranche covers 9 stretches in total - 5 highways running across Andhra Pradesh and 4 highways in Gujarat - and was released last October after the government assessed asset condition through drone videos and network survey vehicles. Singh added that the funds generated from monetisation of highways will be used for new infrastructure programmes like Bharatmala, the government's ambitious Rs7,00,000 crore road building initiative.