Box 2: Case Studies from India and Indonesia
Asset selection for toll-operate-transfer (TOT) model of road asset monetization, India
The selection of assets is based on asset’s track record of exhibiting certainty in toll generation. As the assets are operating, concessionaires do not bear any developmental and construction risks.
Accordingly, the assets should (i) be operational with observable traffic demand and be supported by (ii) reliable traffic forecast with (iii) substantial capital expenditure already incurred thereby de-risking the concession from development and construction risks.
As per the latest guidelines, the public funded highway projects which are operational and have toll revenue generation history of one (1) year after the commercial operations date shall be monetized through TOT model.
Asset selection for Limited Concession Scheme (LCS), Indonesia
As per the regulation on LCS, assets belonging to the State, and assets belonging to State-owned enterprises (SOEs) are eligible for monetization. These include infrastructure assets such as transportation assets (seaports, airports, railways and bus terminals), toll roads, water/drinking water, sewerage and waste management systems, telecommunications assets and energy (power/renewables, oil and gas).
The LCS Assets must satisfy criteria set out in the regulation:
The assets have operated for at least two years
The assets require operational efficiency.
The life of the assets is at least ten years.
The assets have a track record of positive cash flow for at least two (2) consecutive years.