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Telangana first State to monetise roads

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Hyderabad: Telangana has become the first State in the country to go for asset monetisation through toll, operate and transfer (TOT) by appointing transaction advisers for the Outer Ring Road circling the city.

The Ministry of Road Transport and Highways and the National Highways Authority of India (NHAI) have floated tenders for national highways and facilities in the country, and the first lot of bids for TOT for them are expected in February.

By appointing transaction advisers, the Telangana government stayed a step ahead and became the first State to launch the asset monetisation exercise in public-private partnership (PPP) as recommended by the Kelkar Committee.

The project is expected to garner significant extra-budgetary resources for the State that can be used for other infrastructure assets. Importantly, there will be no additional cost either for users or taxpayers.

This will go a long way for Hyderabad Growth Corridor Limited (HGCL) in generating more revenues from the ORR, besides asset monetisation.

The government has appointed a consortium of LEA Associates South Asia Private Limited (LASA) and CRISIL Risk & Infrastructure Solutions Limited (CRIS) as transaction advisers.

CRIS Transport and Logistics Practice Lead and Director Jagannarayan Padmanabhan described TOT as an effective asset recycling model, which would enable governments to raise resources for investment in infrastructure without resorting to budgetary support or debt. “The Nehru ORR TOT project will be watched closely as it will set an example for other States on asset recycling,” he stated in a press release.

The 158 km-long ORR, constructed in three phases at a cost of Rs 6,696 crore, comprises 13 road stretches – dotted with 19 toll plazas – that would be monetised. The HGCL plans value-addition to ORR through private sector participation, which would upgrade the asset on a continuous basis without compromising on operation and maintenance.

The project is likely to attract investors, including sovereign wealth funds, infrastructure investment funds and road developers.

LASA Project Team Leader Avadesh Singh said traffic and engineering surveys would be carried out for investors to know the condition of the highway and horizon-year traffic levels.

HMDA Commissioner T Chiranjeevulu said the consortium would submit a report on the probable prospects for investors in about 45 days.

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