NHAI to Launch ₹44,000 Crore BOT Road Projects in FY25

The National Highways Authority of India (NHAI) plans to offer 15 road projects worth Rs 44,000 crore, covering 900 km, for bids under the build-operate-transfer (BOT) mode in FY25. These 15 projects are part of a larger government plan to offer 53 projects worth over Rs 2.2 lakh crore, covering 5,200 km, under the BOT mode over the next three to five years.

The National Highways Authority of India (NHAI) plans to offer 15 road projects worth Rs 44,000 crore, covering 900 km, for bids under the build-operate-transfer (BOT) mode in FY25. This initiative could mark the revival of public-private-partnership projects in highway development. To attract private sector investment, the government amended the model concession agreement earlier this year, making it more appealing. These 15 projects are part of a larger government plan to offer 53 projects worth over Rs 2.2 lakh crore, covering 5,200 km, under the BOT mode over the next three to five years.

In the BOT mode, the successful bidder is responsible for constructing, operating, and maintaining the highway, and recovers their investment through toll rights over a specified concession period. This model, which experienced aggressive bidding until 2014, declined due to project delays and financial stress among developers and banks after the NDA government took charge.

In 2023-24, only one out of 176 awarded projects was on the BOT mode, with the remainder using engineering procurement construction or hybrid annuity models. No projects have been awarded so far in the current fiscal year due to the election model code of conduct, which was in place until earlier this month.

Recent changes to the BOT model include construction support to concessionaires to ensure timely completion and longer tolling periods to offset losses from competing roads. The amended model concession agreement also clarifies compensation terms for force majeure events and provides for a termination payment during the construction period if 40% of the project is completed. These adjustments aim to reduce risks and make BOT projects more attractive to private investors.