India seeks $719m road toll bids buoyed by PM Modi's second term

National Highways Authority to open auction to toll-operate-transfer roads as optimism around BJP's re-election expected

India's PM Narendra Modi has been re-elected.
India's PM Narendra Modi has been re-elected.

India's National Highways Authority is offering 550km of roads to private companies to operate and collect tolls, with the process expected to fetch the newly re-elected Prime Minister Narendra Modi government approximately $719m. 

Bids are being sought to run roads under the toll-operate-transfer (TOT) model in the Indian states of Tamil Nadu, Uttar Pradesh, Bihar, and Jharkhand.

Details of the third round of auctions will be finalised soon, with bids to invited a month later, according to Construction Week's sister title Construction Week India.

Introduced in 2016 to monetise publicly funded highways, the TOT model is being pursued by the Indian Government to help raise resources and attract private funding, which has remained subdued thus far, according to CWI's report.

With the country’s Bharatiya Janata Party (BJP) winning a second term in power, long-term investors are expected to sense stability in the market.

The first round of TOT auctions were held in February 2018, raising $1bn for the government.

The second auction, however, drawing a lukewarm response, was canceled in February 2019.

An official cited by CWI said that the expectations of bidders and the government didn’t match in the round, but National Highways Authority expects Round 3 to succeed after making some changes to the TOT framework.

“We’re coming coming out with new stretches, and a decision will be taken later as to how to re-bundle the TOT round 2 in the currently round,” the official reportedly said.

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