+
NHAI initiates reforms to boost private investment in toll projects
ROADS & HIGHWAYS

NHAI initiates reforms to boost private investment in toll projects

Implementing sweeping changes in contractual conditions, the National Highways Authority of India (NHAI) aims to attract increased private investment. Under the revised terms, NHAI will incorporate a provision enabling the repurchase of toll road projects if a competing or additional toll road emerges nearby. The finalised adjustments also guarantee the payment of 90% of outstanding loans to lenders in the event of contract termination due to default by contractors or the highway authority, providing reassurance to banks and financial institutions.

NHAI will further enhance transparency by sharing project-specific details and land status with lenders, addressing concerns about project delays arising from land unavailability. These pivotal modifications to the 'model concession agreement (MCA)' and toll highway projects under the build-operate-transfer (BOT) model are poised to rejuvenate private investment in the sector. NHAI has identified 54 projects valued at over Rs 2.2 trillion, covering a distance of 5,200 km. Recently, it disseminated project details to road builders, financial institutions, and fund managers.

One major apprehension for investors has been the emergence of government-initiated road projects running parallel to existing toll roads, potentially diverting traffic and causing revenue loss. The introduction of the buyback provision is anticipated to instill confidence in private investors. A senior executive from a road construction company welcomed the amendments, highlighting that the changes in contractual conditions were overdue.

These alterations address discrepancies in toll period modifications, concession periods based on actual traffic, and provisions for addressing actual traffic exceeding designed capacity or delays compensated by the authority. Union Road Transport Minister Nitin Gadkari emphasised the commitment to making further adjustments to attract private investment, noting the superior quality and lower maintenance requirements of BOT-Toll projects compared to those funded entirely by the government.

NHAI Chairman Santosh Kumar Yadav acknowledged the decline in BOT projects since the golden period between 2009 and 2011, attributing it to aggressive bidding. To revitalise private investment, the authority is implementing changes based on past experiences. Yadav noted that NHAI only tendered one BOT project last year, underscoring the importance of the ongoing efforts to streamline authorisations, enhance transparency, and establish specific deadlines, all aimed at making BOT projects more attractive.

Implementing sweeping changes in contractual conditions, the National Highways Authority of India (NHAI) aims to attract increased private investment. Under the revised terms, NHAI will incorporate a provision enabling the repurchase of toll road projects if a competing or additional toll road emerges nearby. The finalised adjustments also guarantee the payment of 90% of outstanding loans to lenders in the event of contract termination due to default by contractors or the highway authority, providing reassurance to banks and financial institutions. NHAI will further enhance transparency by sharing project-specific details and land status with lenders, addressing concerns about project delays arising from land unavailability. These pivotal modifications to the 'model concession agreement (MCA)' and toll highway projects under the build-operate-transfer (BOT) model are poised to rejuvenate private investment in the sector. NHAI has identified 54 projects valued at over Rs 2.2 trillion, covering a distance of 5,200 km. Recently, it disseminated project details to road builders, financial institutions, and fund managers. One major apprehension for investors has been the emergence of government-initiated road projects running parallel to existing toll roads, potentially diverting traffic and causing revenue loss. The introduction of the buyback provision is anticipated to instill confidence in private investors. A senior executive from a road construction company welcomed the amendments, highlighting that the changes in contractual conditions were overdue. These alterations address discrepancies in toll period modifications, concession periods based on actual traffic, and provisions for addressing actual traffic exceeding designed capacity or delays compensated by the authority. Union Road Transport Minister Nitin Gadkari emphasised the commitment to making further adjustments to attract private investment, noting the superior quality and lower maintenance requirements of BOT-Toll projects compared to those funded entirely by the government. NHAI Chairman Santosh Kumar Yadav acknowledged the decline in BOT projects since the golden period between 2009 and 2011, attributing it to aggressive bidding. To revitalise private investment, the authority is implementing changes based on past experiences. Yadav noted that NHAI only tendered one BOT project last year, underscoring the importance of the ongoing efforts to streamline authorisations, enhance transparency, and establish specific deadlines, all aimed at making BOT projects more attractive.

Next Story
Technology

Six ways a smarter workflow leads to faster, more accurate bids

In today’s fast-paced civil construction environment, estimators need more than just solid numbers. They need smart, streamlined processes. This article explores six key ways connected workflows can transform the estimated approach, help in minimising risk, move faster, and improve accuracy. By integrating tools, data, and teams, one can produce stronger bids with less rework, fewer surprises, and more confidence. As an estimator, the job goes beyond producing numbers. They are responsible for delivering bids that are fast, accurate, and built to win. In today’s civil construction ind..

Next Story
Real Estate

Experion Launches Women-Only Co-Living Project in Greater Noida

Experion, part of Singapore-based AT Capital Group, has launched its first co-living space under its managed rental housing brand, VLIV, in Greater Noida. The all-women residence features 730 twin-sharing beds with a strong focus on safety, comfort, and well-being. VLIV has committed a $300 million investment to create a structured, service-led rental housing ecosystem in India. The brand aims to scale up to 20,000 beds in the next few years, with a long-term target of 100,000 beds nationwide. “India’s rental housing is fragmented. VLIV is our way of building long-term, dependabl..

Next Story
Infrastructure Urban

Officine Maccaferri Acquires CPT to Bolster Tunnelling Tech

Ambienta’s platform company, Officine Maccaferri S.p.A., has acquired CPT Group, a leading Italian developer of robotic prefabrication systems and digital control technologies for mechanised tunnelling. The move positions Maccaferri as a global player in integrated tunnelling solutions, blending traditional and advanced mechanised systems. Based in Nova Milanese, CPT serves major global contractors across Europe, Southeast Asia, and Australia. The company offers robotic prefabrication (Robofactory), productivity-monitoring software for Tunnel Boring Machines (TBMs), and eco-designed spa..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?