Centre plans to hold franchise auctions for expressways

The highway ministry is planning to auction capital-intensive expressways to franchises after they are built. The least present value of revenue (LPVR) auction, consultations for which are under way with stakeholders, is likely to be put up for Cabinet approval.

LPVR auctions are adopted worldwide for expressway franchises. The franchise is won by the firm bidding the least present value of toll revenue. The project returns to the government after the contract expires. The new mechanism allows the contract to lengthen if traffic grows slower than expected and shortens it if traffic growth is faster than anticipated. Expressways likely to