Toll operate Transfer (TOT) model

Toll operate Transfer (TOT) model

News: Recently, The National Highways Authority of India (NHAI) recently awarded two highway monetisation projects worth Rs 6,584 in the toll, operate, and transfer(TOT) mode.

What is TOT model? How does it work?
• The Toll Operate Transfer (TOT) Model is a for monetizing public-funded highway projects.
• Public-funded projects that have been operational for at least two years are put up for bidding.
• The right to collect and appropriate toll fees is assigned to concessionaires (developers or investors) for a predetermined concession period, typically 30 years. This assignment is made against the upfront payment of a lump sum amount to the National Highways Authority of India (NHAI).
• The toll revenue potential of the identified National Highway (NH) projects forms the basis for this assignment.
• The operation and maintenance (O&M) obligations of these projects rest with the concessionaire until the end of the concession period.
• Concessionaires are appointed through a transparent and uniform procurement process within a predefined and approved implementation framework.

Significance:
• This model helps in utilizing the corpus generated from the proceeds of project monetization. The government can use these funds to meet requirements for future development and O&M of highways in the country, including in unviable geographies. The TOT model has been developed to encourage private participation in the Highway sector.