Highway projects worth Rs 31,000 crore called under BOT model

The NHAI [National Highway Authority of India] backed by the road and transport ministry is calling for bids for highway construction projects worth Rs 31,000 crore under the BOT model [ Build Operate Transfer] route.

Highway projects worth Rs 31,000 crore called under BOT model
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Broadly, 8 key highway stretches including a greenfield access-controlled expressway are proposed to be developed in the BOT model. The total combined length of highways for which bids have been invited is 517.4km and total project cost is expected around to be Rs 30,975 crore, precisely. The projects are listed to be part of 15 highway stretches of 937 km that are to be awarded under BOT this financial year. The total cost of the project is approximately Rs 44412 crore.

Further, the length of highways identified for the BOT model of development is 15% of about 6,100km of stretches that will be awarded this year by NHAI. The accumulated target of BOT contribution is around 10% in highway construction. Out of 15, four will be developed using the Hybrid Annuity Model [HAM] and one will be implemented through the Engineering Procurement Construction [EPC] model.

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The projects offered under BOT model included a 6-lane greenfield access-controlled expressway between Agra and Gwalior that will pass through Uttar Pradesh, Rajasthan, and Madhya Pradesh. This 88.4km expressway's project cost has been estimated around Rs 3841 crore. Other highways for which bids have been called are in Maharashtra, Assam, and Telangana.

The NHAI plans to increase the share of the toll-based highway construction model to 10% by offering only viable projects and making changes to concession agreements. Under BOT model, a private player is granted a concession to finance, build and operate a project for a specified period of time[ 20 to 30 year concession period]. It is a conventional Public-Private Partnership model in which a private player holds the responsibility to design, build, operate [during the contracted period] and transfer back the facility to the public sector.

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The government has decided to assess the revenue potential of a project every five years during the concession period as against every 10 years earlier.

In India, the new Hybrid Annuity Model [HAM] is a mix of BOT-Annuity and EPC models. As per the design, the government will contribute 40% of the project cost in the first five years through annual payments and the remaining payment will be made on the basis of the assets created and the performance of the developer.

Between 2007 and 2014, BOT was the primary model used for building highways in India. While, in 2018-19 and 2019-20, no road concessions were awarded on the BOT model.

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