Adani Group has quoted the highest bid of Rs 1,011 crore for the first bundle of 53.6 km national highway stretch under the fifth round of toll-operate-transfer (TOT) mode while Nagpur-based DP Jain has offered to pay `1,251 crore, the highest by any bidder, to take on long-term lease the second bundle of 106 km.
The National Highways Authority of India (NHAI) had invited bids for the two bundles last September. Financial bids were opened on Friday.
Indian Highways Concessions Trust, Cube Highways, PATH and IRB are the other bidders who participated in the current round of auction.
Under the TOT model, the NHAI offers operational highway projects to private entities on a long-term concession (15-30 years) basis against an upfront payment. During the concession period, the TOT operator collects user fee on the stretches in line with the prescribed rates set by the NHAI to recoup their investments; but the operator has to operate and maintain the stretches.
Exercising flexibility bestowed upon it by the government, NHAI set the lease period to 20 years for the two bundles on offer under fifth round of TOT. Both the bundles are part of NH-27 in Gujarat.
Just a few days ahead of inviting bids for the fifth bundle, NHAI had decided not to disclose the floor price of the highway bundles under the TOT model at the time of inviting bids. The floor price or the initial estimated concession value (IECV) would rather be disclosed only after selecting the bidder.
Sources said the NHAI Board will meet in the first week of March to decide on the floor price. The winning bid should be higher than the floor price set by the NHAI. Thus, placing the highest bid does not guarantee the bidder of getting the stretches on long-term lease.
Exercising the TOT route, NHAI has already monetised two bundles totaling 1,247 km that fetched the authority Rs 14,692 crore; but, at the same time, it had to annul two other monetisation attempts (the second and the fourth rounds) previously as investors did not match up the floor price.
The proceeds from the asset monetisation programme are used to repay NHAI’s debt, which mounted to Rs 2.72 lakh crore, as on November 2020, and to develop highways.