MoRTH conference propels revival of BOT projects

19 Jan 2024 CW Team

During the conference, Nitin Gadkari expressed the commitment to revitalise the BOT model, aiming to make it more investment-friendly and enticing for private partnerships. He emphasised that this revitalisation would not only fortify road infrastructure but also have a positive impact on the economy by creating employment opportunities and reducing logistical costs.

The conference featured presentations by senior officials of the National Highways Authority of India (NHAI) regarding proposed modifications to the Model Concession Agreement (MCA) of BOT (Toll). These modifications aimed to address concerns raised by stakeholders and eliminate discrepancies in various aspects, including termination payments, Concession Period adjustments based on actual traffic, reconsideration of actual traffic exceeding design capacity, and defining termination payments related to delays and force majeure causes. A new provision for Buy Back in case of Additional Tollway/Competing Road was also introduced.

Currently, due to implementation challenges in BOT Projects, projects are predominantly awarded on Engineering Procurement Construction (EPC) or Hybrid Annuity Mode (HAM). To revive BOT projects, several initiatives such as Harmonious Substitution, One Time Fund Infusion, Rationalised Compensation, Premium Deferment, and allowing refinancing have been implemented. Looking ahead, 53 BOT (Toll) Projects covering a length of 5200 km and valued at Rs. 2.1 trillion have been identified, with bids for 7 projects covering a length of 387 km and worth Rs 270 billion already invited.

Aligning with the Government of India?s 'Vision 2047' Plan, numerous high-speed corridors are envisioned for development. The robust Public-Private Partnership in the road sector is considered pivotal to realising this vision, contributing significantly to the development, operation, and maintenance of a world-class National Highway Network in the country.

In a bid to promote Public-Private Partnerships (PPP) for Build-Operate-Transfer (BOT) projects and streamline business operations, the Ministry of Road Transport and Highways (MoRTH) orchestrated a conference in New Delhi. This gathering included key industry players such as Concessionaires/Contractors, Highway Operators, Investment Trusts, and representatives from Bankers/Financial Institutions, as well as Technical and Financial Consultants from the road sector. The inaugural session was graced by Nitin Gadkari, the Union Minister for Road Transport and Highways, alongside dignitaries like Anurag Jain, Secretary, MoRTH, Santosh Kumar Yadav, Chairman NHAI, and senior officials from various departments and authorities related to road infrastructure. During the conference, Nitin Gadkari expressed the commitment to revitalise the BOT model, aiming to make it more investment-friendly and enticing for private partnerships. He emphasised that this revitalisation would not only fortify road infrastructure but also have a positive impact on the economy by creating employment opportunities and reducing logistical costs. The conference featured presentations by senior officials of the National Highways Authority of India (NHAI) regarding proposed modifications to the Model Concession Agreement (MCA) of BOT (Toll). These modifications aimed to address concerns raised by stakeholders and eliminate discrepancies in various aspects, including termination payments, Concession Period adjustments based on actual traffic, reconsideration of actual traffic exceeding design capacity, and defining termination payments related to delays and force majeure causes. A new provision for Buy Back in case of Additional Tollway/Competing Road was also introduced. Currently, due to implementation challenges in BOT Projects, projects are predominantly awarded on Engineering Procurement Construction (EPC) or Hybrid Annuity Mode (HAM). To revive BOT projects, several initiatives such as Harmonious Substitution, One Time Fund Infusion, Rationalised Compensation, Premium Deferment, and allowing refinancing have been implemented. Looking ahead, 53 BOT (Toll) Projects covering a length of 5200 km and valued at Rs. 2.1 trillion have been identified, with bids for 7 projects covering a length of 387 km and worth Rs 270 billion already invited. Aligning with the Government of India?s 'Vision 2047' Plan, numerous high-speed corridors are envisioned for development. The robust Public-Private Partnership in the road sector is considered pivotal to realising this vision, contributing significantly to the development, operation, and maintenance of a world-class National Highway Network in the country.