Home >Industry >Infrastructure >NHAI proposes changes in BOT model to lure private investors
Under BOT, which is a conventional PPP model, a private entity is responsible for building, designing and operating the road and transferring it back to the government.
Under BOT, which is a conventional PPP model, a private entity is responsible for building, designing and operating the road and transferring it back to the government.

NHAI proposes changes in BOT model to lure private investors

  • Reviving private sector interest in BOT projects in crucial owing to the government’s stressed finances
  • Under BOT, which is a conventional PPP model, a private entity is responsible for building, designing and operating the road and transferring it back to the government

The national highways authority of India (NHAI) on Wednesday proposed changes in regulatory guidelines for allocating road projects under the build-operate-transfer (BOT) model to revive private sector investment. Towards this, NHAI has invited comments from road developers, lenders, bankers, industry bodies and other stakeholders on the revised draft guidelines.

“NHAI is in the process of reviving the BOT (Toll) mode and amendments proposed in Model Concession Agreement (MCA) are in sync with this objective," the highway authority said on Wednesday.

“The major modifications proposed in the MCA are related to capping of liabilities of either party throughout the subsistence of the agreement, tightening of conditions precedent prior to declaration of appointed date, and amendment in dispute resolution mechanism," NHAI said.

Under BOT, which is a conventional public private partnership (PPP) model, a private entity is responsible for building, designing and operating the road and transferring it back to the government. The private entity or the road developer, in this case is supposed to bring in finance for the projects and collects revenue from the users.

Reviving private sector interest in BOT projects in crucial owing to the government’s stressed finances. Challenges due to financing, land acquisition, environment clearances, lower than estimated revenues, higher-risk for the private sector are some of the reasons why BOT project awards have come down in the last few years.

“The suggested modifications also aim to incorporate recent policy initiatives of the ministry of road transport and highways such as resolution of stuck national highway (NH) projects, introduction of a concept of mutual foreclosure of the agreement, harmonious substitution of the concessionaire etc," it said.

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