CCEA authorises NHAI to monetise national highway projects

The CCEA has authorised the National Highways Authority of India (NHAI) to monetise public-funded national highway projects. Only those projects which have been operational and generating toll revenues for at least two years after commercial operation date are eligible for monetisation through the toll-operate-transfer (TOT) model. Around 75 operational national highway projects completed under public funding have been identified for potential monetisation using the TOT model. Under this model, the right of collection of user fee (toll) on select operational highway stretches constructed through public funding is proposed to be assigned to developers/investors for a specific time period, against an upfront payment of a lump sum amount to the government. Further, during the tenure of the contract, the operation and maintenance (O&M) responsibility would remain with the assigned developer/investor. The move is expected to provide an efficient O&M framework requiring reduced involvement of NHAI in projects post construction. It will also create business opportunities for developers that specialise in O&M of highways, institutional investors including pension and insurance funds, sovereign funds, etc., which are averse to taking construction risks but are adequately equipped for making long-term investments in road infrastructure.

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