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Cube Highways is highest bidder for TOT Bundle-3

The government is banking on the TOT model for monetisation of completed road stretches

Cube Highways, ToT, NHAI, Road projects, National highways

Cube Highways and Infrastructure has emerged as the highest bidder for Bundle-3 of toll-operate-transfer (TOT) projects offered by the National Highways Authority of India (NHAI) by quoting Rs 5,011 crore.

The National investment and Infrastructure Fund (NIIF) quoted Rs 4,230 crore while Mumbai-based IRB Infrastructure Developers quoted Rs 3,510 crore.

The authority had estimated around Rs 4,995 crore from monetisation of this tranche of 566 km of highways under the TOT model. Bundle-1 of the monetisation programme gave NHAI Rs 9,682 crore. Bundle-2 was cancelled in 2018 after the response was lukewarm and bids were below the base price.

The bids for Bundle-3 were invited on 13 June 2019, and the last date for submission of bids was 11 September 2019. Nine highway stretches of 566.27 km in Uttar Pradesh, Bihar, Jharkhand, and Tamil Nadu are on offer in this bundle. NHAI intends to offer several more bundles in coming months. Crisil Infrastructure Advisory were transaction advisors for this tranche.

The government is banking on the TOT model for monetisation of completed road stretches. These contracts require private operators to manage and maintain roads while collecting toll on them. Since these are constructed projects, there is no construction or road acquisition risks involved in the contracts.

Bundle-1 of nine projects -- totalling about 680 km roads in Andhra Pradesh and Gujarat -- was awarded in 2018. A huge interest was shown by foreign investors. TOT Bundle-I was awarded to Macquarie for Rs 9,681 crore, which was 1.5 times the estimate.

Bundle-2 of over 586 km spread over four states — Rajasthan, Gujarat, West Bengal, Bihar with 12 toll plazas across four highways -- was also offered in 2018.

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