HYDERABAD: Hoping to generate Rs 8,000 crore to Rs 9,000 crore, the State government has decided to hand over the 158-km Outer Ring Road (ORR), an eight-lane access-controlled carriageway, on a long-term lease of 30 years to a private agency.
The Hyderabad Growth Corridor Limited (HGCL) has initiated the process for selection of a private entity that would operate and maintain the ORR through Public Private Partnership (PPP) on a Toll, Operate and Transfer (TOT) basis for 30 years from February, 2023.
The selected concessionaire will be responsible for operation and maintenance of the ORR project. The scope of work broadly includes tolling, operation, management, maintenance and transfer of the project road.
The HGCL has invited requests for proposals from international competitive bidding under single-stage bidding. A pre-bid event will be held on November 29, at HGCL Building, Nanakramguda. The last date for submission of bids is January 16, 2023, and the technical bids will be opened the same day.
Eligible bidders will be declared on January 23, 2023 and the financial bids will be opened on January 24, 2023, Letter of Award (LOA) will be given on January 28, 2023 and the signing of the agreement will take place on February 20, 2023.
Though TOT is proposed for the first time in the State, the National Highways Authority of India (NHAI) has been implementing this model across the country. The benefits of TOT include receipt of upfront payment from private players, which can be used for developing other greenfield projects.
It would also reduce the burden of monitoring highway assets and ensure better maintenance of highways due to private participation. Sources said that the selected agency, apart from collecting the toll fee, would ensure traffic management and safety during accidents.
The concessionaire has to perform routine or periodic inspections and identify the maintenance requirements for the ORR as well as the structures. It has to prohibit encroachments and force majeure events. The concessionaire needs to handle all operations, repair infrastructure and carries out major maintenance works as well as inspect the ORR and prevent encroachments.
Officials said that the NHAI is monetising public-funded NH projects which are operational and are generating toll revenues across the country. The HMDA can securitise the toll receivables by collecting the upfront fees. The private party (infrastructure developers, private equity, institutional investors like pension, and wealth funds) will operate and collect toll on the stretch during the concession period.
At present, HMDA offers O&M contracts on a yearly basis. This year, it received over Rs 410 crore. The job consists mainly of toll operations and management. At the same time, HMDA is utilising the services of a transaction advisors (TA). The advisor will evaluate the available data and assess the actual revenue being generated at present and forecast the future toll revenues for the duration of the agreement.