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Investments to double in road business

THE ASIAN AGE.
Published : Sep 14, 2017, 2:56 am IST
Updated : Sep 14, 2017, 2:57 am IST

The First 75 projects that are expected to be offered under this model aggregate a length of 4,500 km.

The TOT model involves leasing out of operational NH for long  periods to collect toll revenue in return for a one-time upfront payment to the government. 
 The TOT model involves leasing out of operational NH for long  periods to collect toll revenue in return for a one-time upfront payment to the government. 

Mumbai: Investments in road projects are expected to double over the next five years to Rs 10 lakh crore with investments in national highways (NH) likely to grow the fastest at about three times following the government’s focus on the sector through several new initiatives. 

While the investments would largely be driven by public funds through the Engineering, Procurement, Construction (EPC) and Hybrid Annuity Model, Crisil said that toll-operate-transfer (TOT), the new PPP model introduced by the government if implemented successfully could attract investment worth Rs 40,000 crore until FY19 from new as well as existing investors.    

Over next five years, the NHAI’s funding through cess is expected to remain low at 18 per cent compared to 35 per cent in the previous corresponding period. In this scenario, the ability of NHAI to consistently raise debt through external sources is a key monitorable, the Crisil said.

The TOT model involves leasing out of operational NH for long  periods to collect toll revenue in return for a one-time upfront payment to the government. 

“Operation and maintenance players in the country are shying away from existing models for maintenance as a result of problems faced in the past. TOT hence targets a new category of investors who are averse towards construction risk but are interested in making long-term investment in infrastructure,” Crisil said. 

Tags: road projects, nhai
Location: India, Maharashtra, Mumbai (Bombay)