TOT AS LONG-TERM RELEASE

Yes, Toll Operate Transfer (TOT) models can be looked at as a form of long-term lease,
particularly in the context of infrastructure projects in India. The TOT model is a mechanism
through which the government or a public authority leases out existing toll road projects to
private entities for a specified period, typically around 20-30 years.1
Under the TOT model, the private entity (often a company or consortium) pays a lump sum
amount upfront to the government in exchange for the right to collect toll revenue from the
road users for the duration of the lease. The private entity assumes the responsibility of
operating and maintaining the toll road during this period.2
The lump sum payment made by the private entity acts as a lease premium or consideration
for the long-term rights to operate and collect toll revenue from the road. The government, in
turn, receives immediate funds that can be utilized for other infrastructure development
purposes.
The TOT model in India was introduced as a means to monetize existing public-funded road
projects and attract private investment into the infrastructure sector. It allows the government
to transfer the operational risks associated with toll collection and maintenance to the private
entity while maintaining ultimate ownership of the road.
While the TOT model can be seen as a form of long-term lease, 3 it is important to note that
the exact terms and conditions of each TOT arrangement can vary. The specific lease period,
payment structure, and other contractual provisions can be subject to negotiation and may
differ from one project to another.

1
https://economictimes.indiatimes.com/news/economy/infrastructure/lease-period-for-road-projects-under-
tot-may-be-cut-to-20-years/articleshow/69682072.cms?from=mdr.
2
https://economictimes.indiatimes.com/news/economy/infrastructure/auction-to-lease-out-11-nhs-under-toll-
operate-transfer-in-mid-september/articleshow/60092707.cms.
3

https://www.niti.gov.in/sites/default/files/2021-08/Vol_I_NATIONAL_MONETISATION_PIPELINE_23_Aug_2021.
pdf.