WORLD NEWS
India ’ s ambitious plan to monetise publicly funded , commercially operational national highway projects , has received a boost . Four companies have put in bids for nine national highways on offer in the first round . The National Highways Authority of India ( NHAI ), which invited bids for these highways , hopes to generate more than Rs 6 000 crores by leasing out the roads under the ‘ toll-operatetransfer ’ ( TOT ) model . The auction will involve five highways running across Andhra Pradesh and four in Gujarat . The total length of these highways is just under 700km . The Cabinet Committee on Economic Affairs in 2016 had authorised NHAI to monetise 75 publicly funded national highways that are operational and have been generating toll revenues for at least two years . The revenue will provide NHAI funds to build more highways , filling in for the private sector that is reluctant to invest in new highways . A second batch of around five national highways with a total length of 500km would be considered later in the year . Under the TOT model , pension funds and PE firms can lease government-owned national highways for 30 years , by making an upfront payment . The lessee , in turn , gets the smartcity . eletsonline . com right to collect the toll and operate , manage , and maintain the highway stretch . The government can also increase the concession period in later stages , if the concessionaire wants it . “ Once it is successful in the highways sector , other sectors such as power transmission , oil , and natural gas could replicate the same model , thereby unlocking the huge off-budget funding ,” said NHAI member-finance Rohit Kumar Singh . The government will line up more such projects for bidding early next year .
Under the TOT model , pension funds and PE firms can lease government-owned national highways for 30 years , by making an upfront payment .
Paraguayan consortium Rutas del Este SA has secured a USD50-million financing package for ‘ Section Zero ’ of the project to upgrade National Routes 2 and 7 in Paraguay . Route 2 links Asunción , the capital city , to Coronel Oviedo to the east . Route 7 connects Coronel Oviedo to Ciudad del Este , the second-largest city in the country . The financing has been provided by a consortium of local banks , comprising Sudameris Bank , Banco Atlas , Banco Regional , Banco Continental , and Visión Banco . It will fund the rehabilitation of the section of Route 2 that links San Lorenzo and Ypacaraí , around 25km , and the temporary operation and maintenance of Route 2 and a section of Route 7 . This work commenced in November 2017 and is expected to take 11 months . The loan was structured by Goldman Sachs . This participation of international leading financial institutions has no precedent in Paraguay , making it the first loan of its kind . This is the first project to be developed through a public-private partnership ( PPP ) since the government passed a PPP law in 2013 . Rutas del Este SA consists of internationally renowned developers Sacyr and Mota Engil , and Paraguayan firm Ocho A . The consortium was awarded the project in October 2016 and secured commercial close in March 2017 .
The estimated total investment required is USD527-million . Once the works are completed , the six-hour journey from Asunción to Ciudad del Este will be reduced to three and a half hours . Some 70 % of all economic activity in Paraguay is concentrated around the roads in question , highlighting the importance of these upgrades .
Route 2 links Asunción , the capital city ( pictured ), to Coronel Oviedo to the east .
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CEC April 2018 - 11