NHs await Rs.40,000-cr from TOT model

Under the recently cleared toll-operate-transfer (TOT) model, the Transport ministry has targeted a whopping sum of Rs. 40,000cr, claimed Crisil Research in its recent report. It may be recalled that India had in November, approved the TOT model under which toll highways operated by the National Highways Authority of India (NHAI) for over two years will be leased out to entities for collecting toll by operating the project for a specified duration. NHAI has decided to lease upto 75 national highway projects which are fetching tolls for at least two years to various entities on the TOT model. Crisil Research further revealed that its calculation assumes annual toll revenue growth of 7-8 percent and return on equity of 14-16%. Theoretically, the targeted amount can fund the construction of 2,800 km of four-lane national highways, which would be equal to the execution expected in fiscal 2017. The research agency estimates that between fiscals 2018 and 2020, construction of highways would require investments of Rs. 2.2 trillion, or more than twice the Rs. 1 trillion projected to be spent between fiscals 2015 and 2017.