Highway ministry asset monetisation peaks at ₹61,000 cr in 2 years

Innovative financing mechanisms by the ministry of road transport and highways, including asset monetisation through various routes, has helped the government realise ₹61,037 crore from the road sector in the past two years. The government hopes to raise an additional ₹9,600 crore by March 2023 to supplement the public resources deployed for highways construction in the country.

According to the ministry of finance, the highway ministry has realised a total of ₹14,268 crore till October in the current financial year. A total of ₹7,518 crore has been realised by monetising 241 km via toll operation and transfer (ToT) model of asset monetisation of the road projects.

Under the toll operate and transfer model, the concessionaire bags the tolling rights of a highway stretch by making a lump sum payment upfront to the government. Thereafter the investor earns the revenues and is also responsible for the upkeep of the stretch, while the incremental toll revenue serves as the return on investment.

Sources in the ministry of road transport and highways have pointed out the ministry is working on a large bunch of projects that will be offered under the ToT model of monetisation in FY24.

On the other models and the funds raised, the ministry of finance said ₹2,850 crore (248 km) has been raised via infrastructure investment trust. Additionally, ₹3,800 crore has been raised through project based financing for the Delhi-Mumbai expressway, an eight-lane Greenfield expressway having a total length of 1,386 km. The capital cost of building the expressway is ₹1,01,420 crore.

Sharing the construction update of the expressway, the ministry of finance said the construction work of 1,368 km has been awarded to various construction agencies and 724 km of the project has be completed by October 2022. The ministry said the balance of 18 km will be awarded by March 2023. The ministry said a substantial portion of the expressway will be completed in FY24.