#1सत्यमेव जयते सड़क परिवहन और राजमार्ग मंत्रालय MINISTRY OF ROAD TRANSPORT & HIGHWAYS भारत सरकार Government of India ( आईएसओ 9001:2008 प्रमाणित मंत्रालय ) ( An ISO 9001:2008 Certified Ministry) Monetization of Public Funded NH Projects through Toll Operate Transfer (TOT) Model Investor Presentation September 2018 भाराराप्रा NHAI#2Agenda Section 1 Importance of Road Sector in India Section 2 National Highways Authority of India Section 3 Transitioning towards the next phase Section 4 Asset Recycling through Toll Operate Transfer (TOT) mode Section 5 $ The TOT Bundle II#3Importance of Road Sector in India BRIDGE OVER RIVER NARMADA ON NH-8 VARUNA#4Transport Sector in India GDP Contribution of transport sub-sectors 0 28.57% 11.43% ■Railways 1.43% 1.43% 11.43% 45.71% द Indian Roads Sector 2nd largest Road Network in the world with 5.23 million kilometers Ω National Highways comprise 1,22,000 km of the road network, carry 40% of the traffic Road Transport Air Transport Transport sector is a significant contributor to the Indian GDP, and 45.71% of its contribution is through Road Sector It is evident that its development is the mainstay focus of the Government Water Transport Services Incidental to transport Others#5Commitment of Government to the Road Sector Expenditure in Road Sector as a percentage of other Infrastructure Sectors 25000 60% 50% 20000 Growth of Expenditure in the Road Sector 40% 15000 30% CAGR: 48.13% 10000 20% 50% 37% 5000 25% 10% 0% 2014-15 2015-16 2016-17 ■Roads and Bridges (USD m) ווה. 2017-18 2015-16 2016-17 ■Roads and Bridges (USD m) 0 2014-15 The Roads Sector has witnessed exponential growth in terms of government expenditure compared to other infrastructure sectors It has evidenced a 4x increase in the spending by the Government in 4 years, reaffirms their commitment to its development#6Awareness Legislation Offline Online Growth of Electronic Toll Collection in India Easy to Cruise ETC. LANE り SHOP •My FASTag mobile App •NHAI Website •Banks Website •Common Services Centres across India •1300 RTO across India •200 toll Plaza Across India Government of India notification for all M & N class of vehicles with FASTag -1st Dec 2017 Mandate. •Social Media Marketing •FM, Bill Boards, New Paper Ad Total FASTags issued 2,065,809 Average Daily ETC transactions USD 0.2 billion Dec 2016 0.1 million ETC penetration 22.4% Dec 2017 Growth % million 900 ~ 3 million ~12 million 300 Amount of transactions (monthly) USD 0.13 billion USD 0.5 billion 285 Electronic Tags (FASTags) affixed on vehicles No. of transactions (monthly)#7National Highways Authority of India 非 CHAMBAL BRIDGE ON NH-76#8- an Autonomous body National Highways Authority of India under the Ministry of Road Transport and Highways 1988 Establishment under the NHAI Act Magnitude Implementing Agency for world's largest road development programs (Bharatmala Pariyojana & National Highways Development Program (NHDP)) 2018 Credentials/Ratings Domestic Rating AAA by CRISIL, ICRA, CARE & India International: At par with Sovereign (As rated by S&P and Moody's) Expenditure on National Highway development more than INR 85,000 crores (USD 13.07 billion) in FY 2017-18#9NHAI's current growth and future plans Physical progress of projects 16000 14000 CAGR for length constructed: 16.69% CAGR for length awarded: 27.45% 12000 34,800 km to be constructed 10000 8000 6000 4000 2000 0 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Constructed Awarded in NHAI is executing three marquee programs investing $100 billion infrastructure development between FY 2017 - FY 2023 for the Bharatmala initiative The funding for the projects to be executed in future has already been closed by NHAI through budgetary support, market borrowing and private sector investments#10Transitioning to next phase CHENANI-NASHARI TUNNEL#11Asset Recycling in Indian Context Asset Recycling in this context refers to leveraging of existing infrastructure assets that have been created in the past, and utilizing the proceeds so created, to fund new infrastructure creation. Unlocking The advantages of the model include: ✓ Utilization of funds for priority development to serve social service and economic needs ✓ Low Concessionaire risk ✓ Long-term investment opportunity potential of existing assets Investing proceeds Leveraging new assets for creation of new assets Roads sector in India is ready for Asset Recycling#12Primary Procurement modes in India 1 Engineering Procurement Construction (EPC) 2 Government Participation in Procurement Modes Engineering Procurement Construction (EPC) 100% during construction 3 Built Operate Transfer (Annuity) Built Operate Transfer (Toll) Upto 40% Built Operate Transfer (Toll) 4 Hybrid Annuity Mode (HAM) Built Operate Transfer (Annuity) Hybrid Annuity Mode (HAM) 100% during operation 40% during construction 60% during operation Currently there are four primary procurement models being followed in the Indian Roads Sector#13Delivering value in the operational phase • NHAI's assets in operational stage Asset Monetization through Toll, Operate and Transfer (TOT) mode 48% 9,538 KM 10,532 KM 52% Secondary Market Transactions ■ BOT (Toll) ■ Public Funded (EPC, HAM, etc.) Substantial road assets in operational stage and sector ready for monetization of tolled assets Shift in investor profile from traditional road developer to specialized firms such as O&M agencies, tolling agencies and financial investors looking at stable returns over a long horizon#14Some key international investors CUBEHIGHWAYS CIDB H MALAYSIA ISOLUX CORSÁN I SQUARED CAPITAL Brookfield Atlantia Allianz ⑪ Ivanhoé Cambridge Caisse de dépôt et placement du Québec abertis GLOBAL INFRASTRUCTURE PARTNERS MACQUARIE#15Private sector participation through secondary deals Landmark secondary deals GLOBAL INFRASTRUCTURE PARTNERS Brookfield CUBEHIGHWAYS abertiş IDFC Alternatives (India Rayalaseema Expressway Infrastructure Fund I and II) Private Limited; Simhapuri Expressway Private Limited Acquirer: Andhra Pradesh Expressways Limited Farukhnagar-Jadcherla highway; Trichy Tollways project Acquirer: Global Infrastructure Partners Brookfield Asset Management Inc. Acquirer: Acquirer: Cube Highways and Infrastructure Pte. Ltd Abertis Infraestructuras SA Seller: IDFC Alternatives Seller: Seller: BSCPL Infrastructure Ltd; KMC Constructions Ltd. IL&FS Transportation Network Ltd. Seller: Macquarie Group Ltd April 2018 September 2017 March 2017 December 2016#16Empty#17it NE-II NE ईस्टर्न पेरीफेरल एक्सप्रेसवे पर आपका स्वागत है IIWELCOME TO EASTERN PERIPHERAL EXPRESSWAY Asset Recycling through Toll Operate Transfer (TOT) mode ~ NE II सड़कें ही नहीं, BUILDING AN#18NHAI's Asset Recycling Programme Asset Recycling of operational projects through Toll, Operate, and Transfer (TOT) mode Operationally Stable Selection of Projects Proven Tolling History Geographical Proximity TOT Program so far... TOT Bundle I successfully awarded in 2018 for 1.5 times NHAI's assessed value I Phase-1 of TOT Programme Bundling Around 75 projects in 7 bundles selected initially for Asset Recycling TOT programme for Public Funded assets - Phase-1: • Bundles to be bid out in a phased manner over the next 2-3 years. Average Bundle size ~ $ 1 bn, average length ~ 500 km Appropriate Size I TOT Bundle II comprising 12 toll plazas across 8 project | stretches aggregating project | length of 586.55 km is being offered for bidding#19Response to the TOT Bundle I Gujarat: 3 Projects Total Bundle length (km) Number of Toll Plazas Andhra Pradesh: 6 Projects 681 10 Authority's Estimate: Rs. 6,258 crores ($1 billion approx.) Huge interest shown by investors More than 2000 queries received by more than 40 bidders Macquarie - Ashoka IRB Infrastructure Brookfield Asset Management Bid Received ROADIS - NIIF Consortium Rs. 9681 crores ($1.50 billion) Rs. 6930 crores ($1.06 billion) Rs. 7511 crores ($ 1.15 billion) Rs. 6611 crores ($ 1.01 billion)#20n Response to the TOT Bundle I THE ECONOMIC TIMES Intrastructure H = SECTIONS FINANCIAL EXPRESS NEAR TO LEAS TOFNEWS How contrarian measures are better suited to kick-start Industrial revival 60.02-034 MARKET STATS - 50.995 +153010: 29.451 Macquarie wins road projects under TOT for Rs 9,681 crore NEW DELHI: In a bio boost to govern wwwmodulio programme, Sydney 口 hoodquartered Macquarie group has won the Toll Oporate Transfor (TOT) bid of mine national highway with a soraal ionath of jus under 700 km. The company has placed the DE at 1 aroma ac agantz governments axpectations of Moro tras is the tot un acsat moyong pooce that nas on undertakan by the goverment Business Today ECONOMY CORPORATE MARKETS MONEY INDUSTRY TECH OPNUN PHOTOS TOT Bundle I has resulted in Total Cash Flow of more than Rs. 10,500 crores ($1.61 billion) into the Indian Roads sector Home Infrastructure Roadways Aumale firm Macquarie puts in Rs 9,681-crore winning bid for TDT Aussie firm Macquarie puts in Rs 9,681-crore winning bid for 9 TOT projects Of the nine projects, five are running across Andhra Pradesh and four in Gujarat. Apart from Macquaire and Bmokfield. IKB Infrastructure and Roadis-NIII were there in the final run to get these assets on long-term contracts. My New live it Macquarie Group wins India's first ToT project with a bid of Rs9,681.5 crore the car broke destis beng sees as one of the ages og mennture in where Hore 82 WRAP Excery and Politics Story Macquarie bags first project under toll- operate-transfer with Rs 9681.5 crore bid Callalilalkal gysually of balk (NIA) tsuzy the tal-operate() 0 0 0 0 0 0 што носат avice#21TOT model overview • Upfront payment of lump-sum amount $ Long term Toll Collection rights backed by a sound policy framework O&M obligations with the Concessionaire. Capacity Augmentation by the Authority, if required Q Appointment through competitive bids#22Key provisions of Concession Agreement Development and Operations Financial Covenants The Concession The Concession • The Concession Period of 30 years • Upto 49% divestment is allowed till two years of the Concession Period • Upto 100% Change in Ownership allowed after two years Force Majeure • and Termination Other Provisions Development and Operations • The investor would be de-risked from undertaking any construction Capacity Augmentation conducted by the Authority at its own cost, if required Financial Covenants • User Fee collection shall be governed by pre-determined "Fee Rules" • Traffic sampling shall be done at the 10th and the 20th year to assess toll variation Termination Termination Payments based on Unexpired Cash Flows Other Provisions • Well defined and mature Dispute Resolution Procedure#23TOT Bundle II - Details of projects Stretches NH State Number of Toll Plazas Length (Km) Chittorgarh Kota & - 27 Rajasthan 3 160.50 Chittorgarh Bypass Swaroopganj - Pindwara & 27 Rajasthan 2 120.02 Pindwara Udaipur Palanpur Khemana - Abu Rajasthan/ 27 1 45.00 Road Gujarat Jetpur Somnath 151 Gujarat 2 102.26 Purnea Dalkhola 31 Bihar 1 36.30 West Dalkhola Islampur 31 1 51.97 Bengal - Islampur Sonapur - West 31 1 44.00 Ghoshpukur Bengal Rajasthan - Salsalabari West Bengal Assam Border Section West 31C 1 26.50 Bengal Gujarat Total 12 586.55 Bihar West Bengal Initial Estimated Concession Value of Authority: INR 5362 crores (USD 0.80 bn)#24Comprehensive technical studies conducted Mobile LIDAR Survey 1 360 Degree Evaluation of Asset Parameters 2 3 Technology-Driven Investigations Systematic Approach to Analyze Data and Evaluate Highway Assets Traffic Volume Count Survey Pavement Investigation using Network Survey Vehicle Drone Videography Pavement Investigation using Falling Weight Deflectometer NHAI has conducted comprehensive technical studies. Raw data is being made available to the prospective bidders#25Qualification Criteria - RFP . Technical Qualification [Clause 2.2.2 (A) of RFP] To be considered as qualified Bidder, the entity either itself or through its O&M partner, shall have expended a minimum of Rs. 299.97 crores ($0.05 billion approx.) and; shall have, as an O&M Contractor individually or through Joint Venture, handled for a minimum period of 2 (two) years at least 2 (two) road projects, each of which is at least 58.65 km in length Financial Qualification [Clause 2.2.2 (B) of RFP] The financial qualification criteria is based on: • Net worth: Rs. 2,144.80 crores ($0.33 billion approx.) or Assets Under Management: Rs. 26,810 crore ($4.12 billion approx.)#26Timelines of Bidding Process Event Description Invitation of RFP (NIT) Date 06/08/2018 Last date for receiving queries 27/08/2018 Pre-Bid meeting at venue mentioned at Clause 2.11.4 31/08/2018 Authority response to queries latest by 14/09/2018 Last date for submission of Bids Physical Submission of Bid Security/POA etc. Opening of Technical Bids at venue provided in Clause 2.11.4 Declaration of eligible / qualified bidders Opening of Financial Bid Letter of Award (LOA) Validity of Bid Signing of Agreement 05/11/2018 05/11/2018 till 11.00 Hrs IST on Bid Due Date 06/11/2018 at 11.30 Hrs. on Bid Due Date within 30 days from Bid Due Date within 45 days from Bid Due Date Within 90 days of Bid Due Date 120 days from Bid Due Date Within 30 days of award of LOA#27TOT Bundle 2 - Address by Hon'ble Minister tte Mr. Nitin Gadkari, Hon'ble Minister of Road Transport and Highways, Government of India Manetization of National Highway rojects through Toll Opera Mone#28Thank You ~