Vol 4, No 1 (2021) > Articles >

Spatial Distribution of Road Assets in Indian TOT Auctions

Ravi Shankar, Willie Tan



In March and December 2018, the Indian government auctioned two bundles of roads to monetize its assets using the Toll-Operate-Transfer (TOT) model. This paper focuses on understanding spatial distribution of monetized road assets for TOT I and II. Our hypothesis is that there are likely to be strategic reasons for the spatial distribution. The research design consists of comparative case studies of these two auctions. The data sources include in-depth interviews with bidders, government officials, and analysts as well as documentary analyses of concession agreements, bid documents, and other secondary data. It is found that road assets for TOT I were in “politically friendly” states with better asset quality to make them bankable and encourage private participation in future auctions. The bids were well above the reserve price. For TOT II, the assets were of lower quality and three highways out of eight in the auction bundle were in left-leaning opposition-controlled states. The reserve price was also higher, and unfortunately, the bids were too low, and the contract was not awarded.

Keywords: Asset Monetization; Asset Recycling; Auctions; Toll-Operate-Transfer Model

Full PDF Download
Article Tools
   Citation Format


Akerlof, G. A. (1970). The Market for "Lemons": Quality Uncertainty and the Market Mechanism. The Quarterly journal of economics, 84(3), 488-500. doi:10.2307/1879431

Annamalai, T. R., & Hari, S. (2016). Innovative financial intermediation and long term capital pools for infrastructure: A case study of infrastructure debt funds. Journal of financial management of property and construction, 21(3), 231-252. doi:10.1108/JFMPC-07-2015-0024

Asensio, A. M. (2009). A duration model analysis of privatization of municipal water services. Revista de economía aplicada, 17(50), 47.

Bloomberg. (2018). This Indian Minister Can't Get Bankers to Lend for Road Projects. Retrieved from https://www.bloomberg.com/news/articles/2018-09-18/risk-averse-bankers-shying-away-from-india-road-investments

CRISIL. (2019). Future of TOT. Retrieved from Mumbai, India: https://www.crisil.com/content/dam/crisil/events-tiles/infra-intelligence/2019/future-of-tot/future-of-tot.pdf

Economic Survey of India. (2018). India needs $ 4.5 trillion by 2040 to develop Infra. Retrieved from New Delhi, India: https://www.indiabudget.gov.in/budget2017-2018/survey.asp

Economic Survey of India. (2020). Retrieved from New Delhi, India: https://www.indiabudget.gov.in/budget2020-21/economicsurvey/index.php

Economictimes. (2021). NHAI plans to monetise projects worth Rs 3 lakh crore. Retrieved from https://economictimes.indiatimes.com/industry/services/property-/-cstruction/nhai-plans-to-monetise-projects-worth-rs-3-lakh-crore/articleshow/80957962.cms?from=mdr

Evans, A. (2017). Patriarchal unions = weaker unions? Industrial relations in the Asian garment industry. Third world quarterly, 38(7), 1619-1638. doi:10.1080/01436597.2017.1294981

Gollerkeri, G. S., A; Pandey, S; Kabbur, M; Venkatesh, A. (2020). Public Affairs Index (2020): Governance in the States of India. Retrieved from Bangalore, India: https://pacindia.org/wp-content/uploads/2020/10/pai2020sr.pdf

Khemani, S. (2012). Political Economy of Infrastructure Spending in India. In C. e. Ghate (Ed.), (pp. 526-550).

Kitschelt, H., & Wilkinson, S. (2007). Patrons, clients, and policies: patterns of democratic accountability and political competition. Cambridge: Cambridge University Press.

Kollock, P. (1994). The emergence of exchange structures: An experimental study of uncertainty, commitment, and trust. American Journal of sociology, 100(2), 313-345.

Krueger, A. O. (1974). The Political Economy of the Rent-Seeking Society. The American economic review, 64(3), 291-303.

Kumari, A., & Kumar Sharma, A. (2017). Infrastructure financing and development: A bibliometric review. International journal of critical infrastructure protection, 16, 49-65. doi:10.1016/j.ijcip.2016.11.005

Mei, J., & Moses, M. (2005). Vested Interest and Biased Price Estimates: Evidence from an Auction Market. The Journal of finance (New York), 60(5), 2409-2435. doi:10.1111/j.1540-6261.2005.00803.x

Ministry of Road Transport & Highways. (2018). Toll Collection on National Highways on the Rise. Retrieved from New Delhi, India: https://pib.gov.in/Pressreleaseshare.aspx?PRID=1539341

MoRTH. (2016). Ministry of Road Transport and Highways: Standard tender documents for TOT Model. Retrieved from https://morth.nic.in/standard-document

MoRTH Annual Report. (2020). Annual Report of the Ministry of Road Transport and Highways. Retrieved from New Delhi, India: https://morth.nic.in/sites/default/files/Ministry%20Annual%20Report_2019-20.pdf

Munnell, A. H. (1992). Policy Watch: Infrastructure Investment and Economic Growth. The Journal of economic perspectives, 6(4), 189-198. doi:10.1257/jep.6.4.189

Ortiz, I. N., & Buxbaum, J. N. (2008). Protecting the Public Interest in Long-Term Concession Agreements for Transportation Infrastructure. Public works management & policy, 13(2), 126-137. doi:10.1177/1087724X08326175

Queiroz, C., Haas, R., & Cai, Y. (1994). National economic development and prosperity related to paved road infrastructure. (1455).

Ramaswamy, E. A. (1976). Trade Unionism and Caste in South India. Modern Asian studies, 10(3), 361-373. doi:10.1017/S0026749X00013020

Reserve Bank of India. (2020). Annual Report. Retrieved from New Delhi, India: https://www.rbi.org.in/Scripts/Publications.aspx

Singh, P., & Kathuria, R. (2016). Infrastructure and Connectivity in India: Getting the Basics Right: Infrastructure and Connectivity in India. Asian economic policy review, 11(2), 266-285. doi:10.1111/aepr.12144

Solheim-Kile, E., & Wald, A. (2019). Extending the Transactional View on Public–Private Partnership Projects: Role of Relational and Motivational Aspects in Goal Alignment. Journal of construction engineering and management, 145(5), 4019030. doi:10.1061/(ASCE)CO.1943-7862.0001643

Solheim-Kile, E., & Wald, A. (2020). Public–private joint ventures in the healthcare sector: enlarging the shadow of the future through social and economic incentives. The International journal of public sector management, 33(6/7), 647-662. doi:10.1108/IJPSM-12-2019-0318

Solomon, L. (2009). The Promise and Perils of Infrastructure Privatization: The Macquarie Model (1st 2009. ed.). New York: Palgrave Macmillan US.

Villani, E., Greco, L., & Phillips, N. (2017). Understanding Value Creation in Public‐Private Partnerships: A Comparative Case Study. Journal of management studies, 54(6), 876-905. doi:10.1111/joms.12270

World Bank. (2018). Logistics Performance Index Retrieved from Washington, D.C., United States: https://lpi.worldbank.org/international/global

World Bank. (2019). Ease of doing business in India. Retrieved from Washington, D.C., United States: https://www.doingbusiness.org/en/data/exploreeconomies/india

World Bank. (2020). Private Participation in Infrastructure Database Retrieved from Washington, D.C., United States: https://ppi.worldbank.org/en/ppi

World Economic Forum. (2019). The Global Competitiveness Report. Retrieved from Cologny, Switzerland: http://www3.weforum.org/docs/WEF_TheGlobalCompetitivenessReport2019.pdf

Copyright © CSID - JID