Health check for highways before sell-off

The National Highways Authority of India (NHAI), currently tendering road monetisation projects, has started a unique data sharing plan with prospective bidders. It is undertaking the task of conducting due diligence for contracts prior to their bidding.

The NHAI will ascertain the health of the toll-operate-transfer (TOT) projects, which would then be offered to international investors for their operations and maintenance (O&M).

The NHAI-appointed consultant would establish a data bank of road assets that would be tendered. These O&M contracts are usually for 20-25 years and hence, the prospective bidders require a detailed blueprint of the contract before submitting bids.

“Three consultants have been appointed — CRISIL, Deloitte, and Mazars — for conducting the pre-bid due diligence of the nine stretches that would be tendered by the NHAI this month,” said an

industry executive. As part of the due diligence process, the consultants would establish how good the asset is, the age of the asset, and the material used in the construction of the road. The data created would then be placed in public domain by the NHAI for the prospective bidders to study.

Three bundles of highway stretches would be tendered by the NHAI this month. A batch of nine stretches across Odisha, West Bengal, Assam, and Bihar, a bunch of seven stretches across Tamil Nadu, Telangana, Rajasthan, and Gujarat and another bundle of 10 stretches across Uttar Pradesh, Bihar, and Jharkhand. This is the second round of bidding for TOT projects, when a joint venture of Macquarie and Ashoka Buildcon bagged the first bundle of road monetisation projects for ~96.8 billion.

These projects were offered to the global players after the Cabinet Committee on Economic Affairs, in August 2016, authorised the NHAI to monetise public funded national highway projects.