NHAI’s Toll-operate-transfer Model: More Funds, More Opportunity In Roads

NHAI’s Toll-operate-transfer Model: More Funds, More Opportunity In Roads

With roads at the centre of infrastructure development, the National Highways Authority of India’s (NHAI’s) decision to tap funds through innovative methods brings hopes of new orders for developers.

Apart from policy logjam and clearances for smooth project execution that’s being put in place, steady fund flow is another challenge in infrastructure.

Indeed, Union minister Nitin Gadkari’s statement of coming out with an initial public offering, or IPO, of NHAI would be a giant leap in providing funds to a sector that is heavily reliant on budgetary support.

But that maybe some time away.

In the near term, NHAI hopes to mop up about Rs6,000 crore (in the first round) by auctioning existing road projects under the toll-operate-transfer (TOT) model. The premise here is to collect funds upfront from interested parties against a stream of cash flows from toll revenues that would be assigned to them for a continuous period of say 30 years. Read More…

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