Telangana govt to lease out ORR, raise Rs 5K crore revenue

HYDERABAD: The cash-strapped State government has decided to generate additional revenue by monetising the 158-km access controlled expressway Outer Ring Road (ORR) to private players on lease of up to 20 years on a Toll Operate Transfer (TOT) basis. Through the TOT model, the government is expecting to get an upfront payment of around Rs 5,000 crore.

The Hyderabad Growth Corridor Limited (HGCL), a wing of Hyderabad Metropolitan Development Authority (HMDA) will monetise the ORR stretch on TOT model. In this connection, it is in the process of appointing a Transaction Advisor.  Though the TOT model is proposed for the first time in the State, the National Highways Authority of India (NHAI) has been implementing this model on its NH roads across the country.

Under this model, the private concessionaire would offer an upfront lump sum amount to the State government in lieu of the right to collect user fee and maintain the project highway for a period of around 20 years. 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 agreement.

Officials told TNIE that benefits of TOT include receipt of upfront payment from private players, which can be used for developing other green field projects. It would also reduce the burden in monitoring highway assets and ensure better maintenance of highways due to private participation. 

While the concessionaire will be responsible for all operations and maintenance of the ORR section, the concessionaire’s obligation will be toll collection, regular maintenance (prompt repair of potholes, cracks, drains, joints), major maintenance (relaying of the road, strengthening and rehabilitation, refurbishing of the tolling system as and when required).

The officials also said that HMDA securitises the toll receivables by collecting upfront amounts. 
The TOT model has been designed to create an opportunity for the private sector to invest in low-risk assets and at the same time ensure efficient operations and maintenance of highways by the private sector, check pilferage of toll revenue and channelise capital inflows for creating new road infrastructure, officials added.

The concessionaire performs routine or periodic inspections and identifies the maintenance requirements for the ORR as well as the structures. It has to prohibit encroachments, ensure traffic management and safety during accidents. 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.