The highway sector appears to once again witness investors’ interest in pure public-private-partnership (PPP) projects, the share of which in new awards has declined precipitously for almost a decade and drawn a blank in the final two monetary years.
The National Highways Authority of India (NHAI) had not too long ago invited bids beneath the revised, investor-friendly develop-operate-transfer (toll) model for six-laning of the two stretches in West Bengal – Panagarh to Palsit (67.75 km) and Palsit to Dankuni (63.83 km) – on the NH-19. Private investors have provided to spend a premium for each projects.
Sources stated Adani Group has provided to spend the highest 11.5% premium of the capital price of the Panagarh -Palshit stretch even though IRB Infrastructure has provided to spend the highest 10.8% premium for the Palsit to Dankuni stretch. Bids have been opened a couple of days back.
Four bidders have been there for each projects. GR Infra projects and PNC Infratech have been the two other bidders. NHAI is unlikely to announce the letter of agreement (LoA) quickly simply because the model code of conduct is in location in the state.
NHAI had final year attempted to bid these two stretches beneath the BOT (Toll) model final year, but annulled the strategy subsequently for want of an sufficient quantity of bidders.
The two projects for which bids have been invited are component of the Bharatmala project, beneath which the NHAI is mandated to develop 34,800 km national highway stretches.
From a higher of 96% of its all-project awards in 2011-12, NHAI’s project awards by way of the BOT (toll) route came to nought in the final two fiscals. Coupled with greater project awards, this resulted in greater reliance on traditional totally state-funded EPC projects and greater accumulation of debt for NHAI which stood at `2.7 lakh crore as of November 2020.
The government not too long ago revised model concession agreement (MCA) for develop-operate-transfer (BOT-toll) projects, beneath which the income possible of a project would be reassessed just about every 5 years in the course of the concession period as against just about every 10 years now. Therefore, the concession period will be extended early in the tenure of the contract, adding to the certainty of money flows.
To defend investor interest in BOT-toll projects, the development of which will enable curtail NHAI’s increasing debt and come across non-government, non-debt sources for highway improvement, the government will also assure to the developers that a BOT-toll project will be awarded only following NHAI taking possession of 90% of the requisite land, equivalent to HAM projects. In the case of totally government-funded EPC projects, the award is executed, only following 90% of the land is acquired.