Providing traffic & revenue forecasting for India's toll-operate-transfer model

For the first time, the National Highway Authority of India (NHAI) introduced a Toll-Operate-Transfer contract for highway projects with the aim of monetising its own assets and releasing funding for investment into traditional contract-based development. As part of this process, NHAI identified over 100 road projects across the country to be tendered in phases.

The first phase introduced a total of ten such highway assets spread across the states of Gujarat and Andhra Pradesh.

The second phase included eight assets located across the states of Rajasthan, Gujarat, Bihar, and West Bengal.

The third phase included nine highways across Uttar Pradesh, Bihar, Jharkhand and Tamil Nadu.

We’ve been involved in both the traffic and revenue and technical due diligence advisory services to the clients in different phases, to support in bidding and potential acquisition of the highway assets.

To deliver the separate streams of expertise required, we split our teams into two groups: traffic and technical. The traffic team was responsible for collecting details of traffic like existing volume, vehicle classes, frequency, etc. analysing it and providing forecasts for both traffic and revenue.

The technical team was responsible for analysing the existing condition of the assets and their structures, estimating the operation and maintenance costs based on forecast movement, and providing a risk rating for each asset.

Successes and outcomes

Our client in one of the three phases already executed and emerged as the L1 (highest) bidder in the whole process. We continue to be involved in the TOT process and expect to do so in the future.