The Cabinet Committee on Economic Affairs on Wednesday gave approval to the National Highways Authority of India (NHAI) to monetise public funded-National Highway (NH) projects, which are currently operational and are generating toll revenues, for at least two years through the Toll-Operate-Transfer model.
This move is expected to garner about Rs. 1 lakh crore.
"The Cabinet Committee on Economic Affairs has authorised National Highways Authority of India to monetise the public funded highway projects, which could result in funds in the range of Rs. 80,000 to Rs. 1 lakh crore initially," Nitin Gadkari, road transport and highway minister, was quoted as saying by Press Trust of India.
Around 75 operational national highway projects completed under public funding have been primarily identified.
The road transport and highway ministry in its statement said the corpus generated from the proceeds of such projects could be utilised by the government to meet its fund requirements for future development, operation and maintenance of highways in the country and could address development or strengthening of highways in unsuitable geographies.
"The model would provide an efficient operation and maintenance (O&M) framework requiring reduced involvement of NHAI in projects post construction completion," the ministry said.
It would facilitate efficient toll realisation through private sector and would create business opportunities for the following:
- A new business vertical of developers who specialise in operation and maintenance of highways.
- A category of investors such as institutional investors including pension and insurance funds, sovereign funds, which is averse to taking construction risks but is adequately, equipped for making long term investments in road infrastructure.
The approval would ensure better O&M of public funded national highway stretches resulting in enhanced quality of service for highway users across the country. The funds generated would be utilised for development of highways in the country, which would benefit highway users.