Bid Variability in Public–Private Partnerships: Lessons from Asset Monetization through the Toll-Operate-Transfer Model in India

Public–private partnerships are an important tool for infrastructure development, but variability in bids can undermine value for money. This study investigated bid variability in India’s initial two auction road assets under the Toll-Operate-Transfer (TOT) model. A comparative case study research design was utilized involving an in-depth analysis of the TOT I and TOT II auctions. Data was gathered from project reports, guidelines, news articles, stakeholder interviews, and then thematically analyzed. The analysis revealed substantial bid variability within and between the auctions. The findings showed bid variability within the auctions depended on the information gaps owing to the timing and quality of the information released by the auctioneer, the tender conditions and tender process, potential value enhancement and securitization of assets by the bidders, heterogeneous bidder objectives across asset types, and strategic bidding assumptions. The bid variability between the TOT I and TOT II auctions depended on asset quality, declared reserve price, sociopolitical factors, and the prevailing business conditions. While TOT I road quality and growth prospects encouraged strong bidding, overpricing, shifting business scenarios, and political uncertainty in TOT II states depressed bids below expectations. Results indicated that transparency around asset characteristics and traffic forecasts enables realistic bid assessments to control variability. It can inform bid rationalization and pricing mechanisms for future auctions of public infrastructure. Setting reserve prices reflecting project specifics also helped anchor bid ranges. Attracting larger bidder pools countered the influence of overly optimistic/pessimistic valuations. Gradual expansion into new geographies allowed adaptive policy learning.