 "53 road projects worth Rs 2 trn identified to be bid out with major reforms")
After years of viability concerns of private highway projects, the National Highways Authority of India (NHAI) has proposed sweeping reforms in the Build, Operate, Transfer (BOT) model and introduced projects worth Rs 2 trillion to be bid out in the coming months.
The 53 projects, spread across various states, will span a length of 5,200 kilometres (km), NHAI said in a statement on Wednesday.
Uttar Pradesh with projects worth Rs 50,000 crore, Maharashtra with projects worth Rs 39,000 crore, and Tamil Nadu with projects worth Rs 26,000 crore will form a majority of the Centre's near-term BOT project pipeline.
It is to be noted that of the current pipeline of 706 national highway projects, only seven are being built in a privatised BOT mode.
Of the 176 projects tendered out in Financial Year 24, only one was a BOT project.
Under the BOT (Toll) mode, contractors are awarded projects based on their estimation of the revenue from the highway projects as they bear the cost of construction and recover their investment through toll rights for a specific concession period.
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The NHAI has also proposed ten major modifications to the model concession agreement (MCA) of BOT projects.
“The proposed modifications include various provisions to eliminate discrepancies such as determination of termination payments, modifications in Concession Period based on actual traffic (PCU) Vs tolling groups of vehicles, actual traffic exceeding design capacity to be revisited, and compensation for delays on the part of Authority as well as force majeure cause to be clearly defined termination payments before project completion with a new provision of Buy Back in case of Additional Tollway/Competing Road,” the NHAI said.
Speaking at a BOT workshop organised by NHAI in New Delhi, Union Highways Minister Niin Gadkari asked contractors to adopt new technologies to challenge cartelisation by steel and cement firms, as monopolies in these sectors ensure that the cost of construction of highways remains escalated.
At present, projects are being awarded on Engineering Procurement Construction (EPC) or Hybrid Annuity Mode (HAM) due to various challenges in the implementation of BOT Projects.
Many initiatives have been taken for the revival of BOT projects and various schemes like Harmonious Substitution, One Time Fund Infusion, Rationalised Compensation, Premium Deferment, and allowing refinancing have been adopted in the past.
Seven projects with a length of 387 km worth Rs 27,000 crore have been invited, the NHAI said.