NHAI plans bids based on returns

The National Highways Authority of India (NHAI) may soon approach its parent ministry for consent to auction road projects based on a new mechanism. 
 

According to one source, the NHAI was working on a different approach from the current "waterfall" method of execution of highway projects. The new mechanism will focus on the internal rate of return (IRR).

The proposal aims to award highway projects on build-operate-transfer (BOT) basis where the IRR is expected to be 15 per cent.  Contracts, where the IRR is likely to be in the range of 10-15 per cent, will be tendered in the hybrid-annuity