MoRTH revises BOT and TOT agreements to boost private sector investment

26 Mar 2024 CW Team

The Ministry of Road Transport and Highways (MoRTH) has introduced a number of revisions to the model concession agreements (MCA) for build-operate-transfer (BOT) and tolling, operation, maintenance, and transfer (TOT) projects. These changes aim to encourage private sector investment in road infrastructure and clarify existing agreements. Key amendments for BOT projects include providing construction support to ensure timely project completion and extending tolling periods to offset losses due to competing roads. The updated MCA also specifies compensation for force majeure events and termination payments if 40% of the project is complete during construction. Additionally, debt and equity provisions aim to align project costs with government projections. Furthermore, the authority will continuously access escrow account statements to prevent funding shortages and project delays. The road ministry notified that these amendments were made following extensive consultations with stakeholders and implementing agencies. Changes in TOT agreements include increasing the frequency of checks to three times and lowering the threshold for variation in toll collection to 5%. These adjustments ensure upfront modifications to the concession period based on toll collection variations. Akshay Purkayastha, Director of Consulting at CRISIL Market Intelligence and Analytics, views the amendments positively, particularly regarding debt obligations, capacity enhancement, and compensation clarity. However, the impact of these changes on BOT projects' revival remains uncertain. Under MoRTH, the National Highways Authority of India plans to auction 53 projects worth over Rs 2,200 billion, covering 5200 kilometres. Currently, projects predominantly follow engineering procurement construction (EPC) or hybrid annuity mode (HAM) due to implementation challenges with BOT projects.

Equipment

25 Apr 2025

Handling concrete better

Efficiently handling the transportation and placement of concrete is essential to help maintain the quality of construction, meet project timelines by minimising downtimes, and reduce costs – by 5 to 15 per cent, according to Sandeep Jain, Director, Arkade Developers. CW explores what the efficient handling of concrete entails.Select wellFirst, a word on choosing the right equipment, such as a mixer with a capacity aligned to the volume required onsite, from Vaibhav Kulkarni, Concrete Expert. “An overly large mixer will increase the idle time (and cost), while one that ..

Elevated floors!

Raised access flooring, also called false flooring, is a less common interiors feature than false ceilings, but it has as many uses – if not more.A raised floor is a modular panel installed above the structural floor. The space beneath the raised flooring is typically used to accommodate utilities such as electrical cables, plumbing and HVAC systems. And so, raised flooring is usually associated with buildings with heavy cabling and precise air distribution needs, such as data centres.That said, CW interacted with designers and architects and discovered that false flooring can come in handy ..

The Variation Challenge

A variation or change in scope clause is defined in construction contracts to take care of situations arising from change in the defined scope of work. Such changes may arise due to factors such as additions or deletions in the scope of work, modifications in the type, grade or specifications of materials, alterations in specifications or drawings, and acts or omissions of other contractors. Further, ineffective planning, inadequate investigations or surveys and requests from the employer or those within the project’s area of influence can contribute to changes in the scope of work. Ext..