DNA Money Edit: TOT success gives NHAI an edge

National Highways Authority of India's (NHAI) maiden attempt to rake in funds for Bharatmala Project has been a runaway success, despite reservations being raised by a section of domestic infrastructure players. Earlier this month, Australian infrastructure asset management company Macquarie Group in joint venture with Nashik-based Ashoka Buildcon bagged the first Toll Operate Transfer (TOT) project for Rs 9,681.50 crore to manage 648 km of national highways. The bid is 54.70% higher than the reserved bid price of Rs 6,258 crore.

During the bidding stage, NHAI was contemplating to come up with smaller packages to allow domestic players to participate in future packages. However, after hitting the bullseye in the initial TOT attempt, it is likely to dole out packages of similar size. This means despite all the flags raised on the terms being "one-sided" towards the government, it is NHAI who will cherrypick if it wants more participation from Indian players or continue to attract investments from foreign private equity and pension funds.

The high bid amounts quoted by other bidders – Brookfield (who quoted Rs 7,511 crore), IRB-Autostrade (Rs 6,930 crore) and Roadis-NIIF (Rs 6,611 crore) – clearly indicate that there is an appetite for more such packages that will be up for grabs. One of them is scheduled to be put up on the block later this month.