What’s Changing in India’s Highway Deals? Govt’s New BOT Blueprint Revealed

With a view to reviving private investment on a big scale in highway infrastructure, the Ministry of Road Transport and Highways (MoRTH) will release a new Model Concession Agreement (MCA) for the BOT toll roads in a month, said Road Secretary V. Umashankar in the ET Infra Roads and Highways Summit in Delhi on July 18.

 

Key points in the announcement:

 

- The new MCA will eliminate the concept of competing roads and utilize a traffic-based approach in order to reduce conflict and enhance foreseeability.

 

- All project parameters will be tied to traffic levels, enabling automatic compensation measures in case traffic levels fall below thresholds.

 

- There will be a buy-out program whereby the government will buy projects once traffic goals are met, enabling future development of highways.

 

Changes to pre-construction and financing requirements:

 

- Bidding will not be initiated until more substantial clearances—like forest and wildlife clearances—are in place, curbing delays and cost overruns.

 

- The government will have additional time spent on pre-construction activities in a bid to reduce risks during construction.

 

- Ownership transfer will be allowed one year from the start of commercial operation, shortened from the previous two years.

 

Strategic context:

 

- BOT program is being revived following almost decade-long sluggish beginning due to difficulties in land acquisition, funding issues, and traffic volatility.

 

- The overhauled MCA is aimed at boosting investor confidence and easing project implementation, as per the government's ₹11.11 lakh crore FY26 capital expenditure proposal.

 

Sources: ETInfra, Economic Times, PIB, Fox Mandal, CareEdge Ratings.