Telangana 1st State To Start Road Monetisation
Telangana has become the first state in India to initiate asset monetisation through the toll- operate-transfer (TOT) scheme, and has appointed transaction advisors to sell the 158-km-long Nehru Outer Ring Road in state capital Hyderabad. While the Union Road Transport and Highways Ministry and the National Highways Authority are expecting bids for the first TOT bundle of national highways in February, Telangana has become the first state to start the asset-monetisation drive.
The Hyderabad Growth Corridor recently started the monetisation process under this model, and has appointed a consortium, led by LEA Associates South Asia and Crisil Risk & Infrastructure Solutions, as transaction advisors.
"The project is expected to garner significant extra-budgetary resources for Telangana that can be used for other infrastructure assets. There is no additional cost to users or taxpayers," Crisil said in a statement on January 9.
The outer ring road was constructed in three phases at a cost of Rs 6,696 crore, and comprises 13 road stretches with 19 toll plazas that would be monetised.
"TOT is an effective asset recycling model, enabling governments to raise resources for infra investment without resorting to budgetary support or debt. This project will be watched closely, as it will show other states the way forward on asset recycling," Crisil Director for Transport and Logistics Jagannarayan Padmanabhan said.
The Hyderabad Growth Corridor envisioned adding value to the outer ring road with private sector participation that would upgrade the asset on a continuous basis while efficiently taking care of its operations and maintenance needs, the release stated.
"The project is expected to generate significant interest among investors--both domestic and foreign, including sovereign wealth funds, infrastructure investment funds and road developers-due to its location, minimum construction risks, land acquisition, green clearances, and known traffic flow for the past few years," Crisil noted.
LASA Project's Avadesh Singh said, "many traffic and engineering surveys will be carried out to give investors comfort regarding the condition of the highway, and base- and horizon-year traffic levels”.
With inputs from Housing News