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TOT: MONETIZATION OF PUBLIC FUNDED, OPERATIONAL NATIONAL HIGHWAY PROJECTS.
Government has approved the proposal to authorize NHAI to monetize public funded NH projects which are operational and are generating toll revenues for at least two years after the COD through the Toll Operate Transfer (ToT) Model subject to, approval of the Competent Authority in MoRTH/NHAI on a case to case basis.
In TOT Model, the right of collection and appropriation of Fees for selected operational National Highway (NH) projects constructed through public funding shall be assigned for a pre-determined concession period to concessionaires (developers/investors) against upfront payment of a lump-sum amount to NHAI. Such assignment of rights shall be based on toll revenue potential of the identified NH projects. Operation & Maintenance (O&M) obligations of such projects shall be with the concessionaire till the completion of concession period. The concessionaires for such projects shall be appointed through a transparent and uniform procurement process within the ambit of a pre-defined and approved implementation framework.
Hybrid Annuity Model for implementation of Highway Projects.
Ministry of Road Transport & Highways has adopted Hybrid Annuity model for implementation of highway projects in order to encourage private sector participation through adequate incentives. The objective is to maximize the quantum of implemented highway projects within available financial resources of the Government. As per this model, 40% the Project Cost is to be provided by the Government as 'Construction Support' to the private developer during the construction period and the balance 60% as annuity payments over the concession period along with interest on outstanding amount to the concessionaire. There is separate provision for O&M payments by the Government to the concessionaire. The private party does not have to bear the traffic risk. All the payments have been inflation indexed by a Price Multiple Index which is a weighted average of WPI and CPI (IW) on 70:30 bases. This mitigates the inflation risk for the developer.