HSA Advocates (HSA) advises National Highways Authority of India (NHAI) on INR 9681 crore sale of nine operational highway projects on the toll, operate, transfer (TOT) model to Macquarie
In a first of its kind initiative by the government where Macquarie, an Australia-based capital fund manager has bagged nine completed highway projects through auction, quoting upfront payment of over INR 9,600 crore to the National Highways Authority of India (NHAI). This is 54% higher than what the highways authority had projected.
HSA Advocates was the legal advisor to NHAI and was represented by senior partner and head of finance and projects practice, Anjan Dasgupta along with partner, Deepak Kumar Thakur while KPMG was the financial advisor. The highway projects will be handed over to the company for toll collection, operation and maintenance for 30 years. After the contract period, NHAI will get back the projects. This is the first time when the government is auctioning completed projects under toll, operate and transfer (TOT) mode to monetise assets.
Four bids received for the first bundle of highway projects were from Brookfield (INR 7,511 crore), Macquarie and Ashoka Buildcon (INR 9,681 crore), IRB and Autostrade (INR 6,930 crore) and Roadis and National Investment and Infrastructure Fund (INR 6,611 crore). The nine highway stretches totalling about 680 km are in Andhra Pradesh and Gujarat. NHAI has started preparing the detailed project reports of another 1,700 km of completed stretches, which it plans to bid out through the TOT mode.
Anjan Dasgupta commented: “The TOT model is a great initiative undertaken by the central government. Success of the first round of bidding under this model has proved that there is good private finance appetite for operational infrastructure projects. This paves the way for financing of such projects by the government through use of public finance during the construction phase, when the risk is significantly higher, and thereafter, monetising the constructed assets for an upfront premium during the operational phase. We at HSA Advocates are delighted to work with NHAI and KPMG on such a significant transaction. This is an excellent outcome for future infrastructure projects in India looking at attracting long term capital providers.”