The minister met bankers, foreign investors
and road developers as part of a road show for the NHAI’s monetisation of a third bundle of roads under the TOT model. The model involves investors bidding for the tolling rights of a bundle of the NHAI projects for a period of time. It involves an upfront payment to the NHAI.
Jayant Mhaiskar, chairman and managing director, MEP Infrastructure Developers, said: “We do not have details and it is difficult to comment on foreign interest, but the NHAI’s version of an InvIT may be very different from that what companies have offered as InvIT so far.”
Mhaiskar described the meeting as an interactive one, where various concerns were discussed. “Members from my team were there, and it was an interactive meeting. I understand amongst other things discussed was the new BOT model,” he added.
The BOT model requires road developers to fully finance and build the road asset, collect toll for a pre-decided period and return it to the NHAI at the end of the period. The last few years have seen the NHAI move away from BOT and towards the hybrid annuity model (HAM) model. Road companies had earlier faced heavy losses owing to the aggressive BOT bidding.
“Road developers are comfortable with a combination of TOT and HAM. Finance is a big issue and not many are keen on the BOT model,” said the official quoted earlier.
Under the HAM model, road developers are paid 40 per cent of the construction cost upfront and they need to finance the residual component.
The central government has envisaged an investment of Rs 100 trillion in the infrastructure space. Industry experts agree the government will need more private investment to be able to meet this ambitious target