In a strategic move to reinvigorate private investments in the highway construction sector, the National Highways Authority of India (NHAI) is set to confer awards for 937 kilometers of stretches, amounting to an investment of Rs 44,412 crore, under the build operate transfer (BOT) model in the current fiscal year. This decision, aimed at resurrecting private sector participation, outpaces the targeted increase in the BOT’s contribution to highway construction, surpassing the goal of 10%.
These identified stretches, constituting 15% of the approximately 6,100 km slated for award this year, extend across 15 meticulously selected routes. Noteworthy among them are nine stretches in Maharashtra, with one each in Uttar Pradesh, Assam, Jammu and Kashmir, Madhya Pradesh, Tamil Nadu, and Telangana.
The rationale behind the emphasis on BOT lies in the efficiency of this model, wherein the concession-winning company is responsible for both the construction and operation of the highway. This not only preserves government resources but also addresses quality concerns that have historically plagued other construction models. The contractual obligations of concessionaires in the BOT model span 20-30 years, ensuring a superior standard of construction.
In a departure from the challenges encountered during 2007-2014 when only BOT was utilized for highway construction, the NHAI aims to mitigate disputes and delays by offering only viable projects with pre-secured land for bidding. Flexibility has been introduced, allowing concession holders to change ownership after a year, innovations like dispute resolution boards and risk-sharing mechanisms have been incorporated, and the requirement of capacity augmentation by the concessionaire has been removed.
This strategic push towards BOT aligns with the government’s broader objectives of reducing dependence on budgetary resources, enhancing the quality of highway construction, and attracting private sector resources. As the NHAI adopts measures to make BOT more appealing, the focus on infrastructure development gains momentum, promising a transformative impact on the country’s economic landscape.
