New concession model introduced to monetise existing Government/SOE infrastructure assets
Key features are outlined as below:
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 de-risking the concession from development and construction risks.
Social and Environmental Checks in Asset Selection
Social and Environmental Checks must likewise be considered in assessing potential asset recycling transactions.
Early-Stage Market Testing
Early-stage market interest should also be conducted to shape the potential transaction and assess the level of market interest in asset recycling transactions while testing broader issues:
Legal and Regulatory Checks in Asset Selection
Check the following legal and regulatory parameters to consider in assessing the suitability of an asset for recycling.
Financial/Commercial Checks in Asset Selection
The following commercial and financial reviews should be considered to determine if an asset has the potential to be recycled.
Operational Checks in Asset Selection
Find operational criteria in selecting an appropriate asset as the subject of an asset recycling transaction.