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NHAI to monetise 2741 km through toll operate transfer, InvIT in FY25

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NEW DELHI : The National Highways Authority of India (NHAI) is looking to monetise 33 stretches of National Highways during the current financial year (FY25) through its toll operate transfer (TOT) and Infrastructure Investment Trust (InvIT).

These stretches include Lucknow-Aligarh, Kanpur-Ayodhya-Gorakhpur, and Bareilly-Sitapur in Uttar Pradesh, Gurugram-Kotputli-Jaipur bypass and Jaipur-Kishangarh in Rajasthan, Panikoili-Rimuli in Odisha, Chennai Bypass in Tamil Nadu, and Muzaffarpur-Darbhanga-Purnia highway in Bihar.

Cumulatively, the 33 stretches, spanning 2,741 kilometres (km) earned approximately Rs 5,000 crore revenue in FY24. 

NHAI will have discretion to review and change the list and modes of monetisation based on its own plans, going forward.

It is not immediately clear which of these assets will be part of NHAI’s TOT bundles and which will be sold to the highway authority’s InvIT.

The authority has so far issued 14 bundles of national highways in the TOT mode. This instrument gives highway players the right to collect toll for a specific period by paying the authority upfront cash. The valuation is arrived at through competitive bidding.

After having struggled with getting bids considered fair by the authority, NHAI has awarded 10 TOT bundles to raise Rs 42,000 crore since the beginning of the asset monetisation pipeline.

In InvIT, the trust which has numerous tax benefits for investors, buys the road from the authority and operates it. It distributes toll earnings in the form of return on units.

NHAI has executed three rounds of offers through its InvIT, raising close to Rs 26,000 crore.

NHAI has been among the government’s few infrastructure departments, which has achieved its monetisation targets in a timely manner. It is in accordance with the phasing provided by NITI Aayog when the national monetisation pipeline (NMP) was launched in 2021.

While monetisation figures have been subject to change based on annual reviews, experts speculate that the target for the ministry of road transport and highways will broadly be in line with the original plan. According to it, Rs 53,000 crore worth of national highways may be put up for private participation.

In FY24, the highway authority had identified 46 national highway stretches, spanning 2,612 km for monetisation through ToTs and InvIT. It finished the financial year, meeting over 90 per cent of its target of Rs 44,000 crore.

NHAI had monetised highway assets worth Rs 40,314 crore, through its three models — TOT, InvIT, and toll securitisation — for specific projects, such as the Delhi-Mumbai expressway.

Now, the highway authority also plans to secure debt for expressway projects on a standalone basis, without a comfort letter from the NHAI.

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