While the marque toll-operate-transfer (TOT) highways will form a large portion of the exercise, a third of this money is likely to come from the NHAI InvIT, and private InvITs that may be directly offered road projects for the first time this year, one of the two persons quoted above said.

The higher monetization in FY25 is expected to maintain the momentum gained in last fiscal when for the first time a sum of ₹38,334 crore was mobilised from ToT, InvIT and project-based financing. This was a growth of over 64% over the FY23 figure of ₹23,336 crore.

Under the national monetization pipeline, road and highways have been given the highest target of monetizing core assets worth ₹1.6 trillion by FY25. MoRTH had already monetized assets worth ₹1.08 trillion since FY19 and is looking at adding another over ₹60,000 in FY25 to achieve its target.

“While MoRTH may achieve ₹1.6 trillion monetization target, its achievement should be viewed from FY22 onwards when the national monetization pipeline was created and targets were set for the next four years upto FY25 for all infra-focused ministries. Since FY22, the monetization of MoRTH is worth ₹84,000 crore. So, more would be needs this fiscal to achieve the target,” said a former official of the National Highway Authority of India (NHAI) on condition of anonymity.

MoRTH officials said that the monetization target would be achieved, as the NHAI has a large bank of completed projects that could be offered to the private sector for operation and maintenance. In addition, after years of viability concerns of private highway projects, the NHAI proposes to revive the ‘Build, Operate, Transfer (BOT)’ model of highway development by issuing tenders for 53 projects of 5,200 km worth ₹2 trillion in the coming months. This will allow the NHAI to secure funds for highways directly from the private sector.

There is also a plan to draw larger participation of global investors in the country’s infrastructure development programme by auctioning completed road and highway bundles directly to private sector InvITs.

This will be first time that completed and revenue-generating highways under the ‘toll operate transfer (ToT)’ mechanism will be directly and exclusively offered to private InvITs, who could then mobilize global investments by offering subscription of InvIT units. So far, the government has been offering road projects by nomination only to state-owned NHAI’s InviT, the National Highways Infra Trust (NHIT), while monetization of assets in other cases is being done by offering ToT projects to private highway developers.

An NHIT official said that they do have any guidance from the NHAI yet on how many projects would be offered to the InvIT. But, MoRTH officials said the NHIT may mobilize more than the ₹15,700 crore it raised last month. This could be ₹20,000 crore or more in FY25, the official said.

The NHAI also looks at mobilizing funds by securitizing future toll revenue in certain projects under the monetizathe    tion exercise.

Questions sent to the MoRTH remained unanswered till press time.

Since FY19, the NHAI has monetised ₹42,334 crore worth of projects under the ToT route, while monetization has garnered ₹25,900 crore through the NHAI InvIT since FY22. The NHAI has also raised ₹40,227 crore through project-based financing since FY21.

A factor in going in favour of the ministry’s monetization drive is a revival in private sector interest in road and highway projects. Out of total capital investment of ₹3.01 trillion in the sector in FY24, ₹34,805 crore has come from the private sector, the highest ever.

Milestone Alert!
Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!

Published: 14 Apr 2024, 06:04 PM IST