New guidelines to boost PPP in highway projects

The Guidelines for Investment in Road Sector, issued by the Ministry of Road Transport and Highways for the National Highways Authority of India (NHAI) on 15 March, have set the tone for attracting enhanced investments in the highways sector. The government of India has launched various phases of the National Highways Development Project (NHDP), which the NHAI is mandated to implement. The projects have been developed or are under development on a public-private partnership (PPP) basis.

New opportunities

Concessions worth approximately US$33 billion were awarded under various packages up to 29 February and a large number of new projects offer investment opportunities for investors, developers and foreign direct investment. Model documents, namely, Request for Qualification (RFQ), Request for Proposal (RFP) and Concession Agreement (MCA) have been revised recently and are expected to spur further private investment in the sector.

Build-operate-transfer (BOT) models used for PPP in highways are BOT (Toll), where the private developer is entitled to collect and retain toll revenues for the concession period, and BOT (Annuity), where the private developer bids for annuity payments from NHAI.

Vibha Sirothiya is a senior associate at Chitale & Chitale Partners, a full-service law firm based in New Delhi.