New Highway Monetisation Plan: NHAI Eyes Revenue Boost Through Toll-Operate-Transfer Model To Attract Wider Investment

In a bid to revitalise the monetisation of highway assets and generate more capital for infrastructure development, the government is set to revive the Toll Operate Transfer (ToT) model with a sharper focus on smaller, investor-friendly bundles.

These smaller highway packages, capped at Rs 1,500 crore, are expected to increase competition, diversify bidder participation, and ultimately boost revenue for the National Highways Authority of India (NHAI), according to a report by Financial Express.

The new format is designed to get more value out of India’s large highway network, helping the government raise funds more quickly for building and maintaining roads.

The ToT model saw limited use last year as concerns were raised about its returns compared to the Infrastructure Investment Trust (InVIT) model. Now, the government is taking a fresh look.

The ministry has asked for a detailed comparison of both monetisation methods, according to an official. Earlier, NHAI had offered two bundles of highways for bidding under ToT, one large and one small.

This led to one major deal in the last financial year, with Highway Infrastructure Trust (HIT), backed by KKR’s Singapore-based unit, winning a 251-km stretch for Rs 6,661 crore. Under the deal, HIT will collect tolls and maintain the roads for 20 years.

The money raised through ToT goes to the government, which then channels it back to NHAI for building new highways and maintaining existing ones. This flow of funds is key to supporting India’s growing road infrastructure.

For the current financial year (2024–25), the Ministry of Road Transport and Highways has set a target of Rs 30,000 crore from asset monetisation.

However, the government is still reviewing the plan to see if this target can be increased based on investor interest and market trends.

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