NHAI scraps practice of declaring estimated concession value of ToT road projects in bidding

The National Highways Authority of India (NHAI) has decided to scrap the practice of announcing the initial estimated concession value (IECV) for toll-operate and transfer (ToT) highway projects put to tender to deter private firms from indulging in cartelization.

“The estimated concession value of each project (the initial estimated concession value of NHAI) shall be disclosed after receipt of technical bids and after declaring the selected bidder. The assessment of actual concession fee, however, will have to be made by the bidders,” NHAI said in a document.

The non-disclosure of IECV was approved by the inter-ministerial committee comprising ministry of road transport and highways, department of economic affairs, department of financial services, department f legal affairs and NITI Aayog at a meeting on September 10.

The NHAI has also decided to reduce the concession period for ToT road projects to 20 years from 30 years.

ToT model for road projects

Under the ToT model, the right to collect user-fee or toll on selected national highway stretches built through public funding will be auctioned and assigned to a concessionaire for a period of 20 years against an upfront payment of a lump-sum amount (concession fee) to the government.

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