The National Highways Authority of India signed their very first toll operate transfer concession agreement on April 27th 2018 with the Australian company, Macquarie. They signed the pact with the organisation for road projects under the highway monetisation drive. Under this signed agreement, all the rights for toll tax collection across nine of the primary national highways in India will be with Macquarie Group.
In a recently issued statement, an National Highways Authority of India official stated that this agreement is one of the highest budgeting projects amounting to USD 1.5 billion for the first bundle of highway projects. This signed project is under the agreement that Macquarie will have all the rights of the toll tax payments handed over to them only with the upfront payment of Rs. 10,500 crore to the NHAI fund. Irrespective of the expected amount to be just about Rs. 6,000 crore, the bidding was raised for Rs. 9,681 crore. The total expenditure will cumulatively amount to Rs. 10,500 crore.
The Member Finance of NHAI, Mr Rohit Kumar Singh expressed his gratitude stating that the raised amount was one and a half times higher than what they had expected to generate. They are delighted that the market recognised the value of their assets and the bids were generated way past the expectations. The spare amount can be a great aid in funding the prospect of asset recycling which in turn can be a beneficial contributor to the development of the financing infrastructure in India.
Mr Rohit Kumar Singh further claimed that this signed agreement between NHAI and Macquarie is one of the largest foreign investments with respect to India’s public infrastructure and will contribute around 700km of national highways. The primary stretch of these national highways is located around Andhra Pradesh and Gujarat. Apart from the expedited funds, the one generated from the highway monetisation will be used for the Bharatmala projects which are the ambitious road and highway building initiative which was announced by the government recently.
The introduction of the TOT model is a recent addition by the National Highways Authority of India to encourage private participation in the roads and highway sector. Under this model, the concessionaire is the one who pays a onetime upfront amount in exchange for complete rights to a road or highway project for a span of 30 years straight.
The Government is working to improve the overall infrastructure of the roads and highways around India and the Bharatmala project is the much-awaited step. This will ensure the construction of over 10,000 km of roads and highways across the country which is expected to promote seamless travel and improve connectivity.
Apart from acquiring an international investor, NHAI also recently signed their very first international road project in Myanmar for the construction of a highway in the country. They have claimed that this project will not just ensure a smoother commute for the highway users there but also promote an effortless trade and travel between India, Myanmar and Thailand.
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