Advertisement
When should a housing society in Mumbai start considering re...
From GST on JDAs to SEBI’s REIT reclassification and the S...
Stay ahead in the world of real estate with our daily podcas...
Stay ahead in the world of real estate with our daily podcas...
The National Highways Authority of India (NHAI) did not receive any bids for highway projects covering around 912 km, with a total value of about INR 18,885 crore, under the build-operate-transfer (BOT) model. The move was part of efforts to bring back private sector participation in road development. However, developers stayed away due to concerns around traffic uncertainty, financial risks, and project viability. The outcome shows that despite policy support, private players remain cautious about investing in BOT-based highway projects.
The National Highways Authority of India (NHAI) has not received any bids for a group of highway projects spanning about 912 km, with an estimated cost of nearly INR 18,885 crore. These projects were offered under the build-operate-transfer (BOT) model, which the government has been trying to revive to increase private sector participation in road development. Advertisement
The BOT model allows private developers to invest in building highways and recover their investment through toll collection over a fixed concession period. It was widely used in the past but saw a slowdown after several projects faced delays, cost overruns, and financial stress. This led to a shift towards EPC and hybrid annuity models, where the government takes on a larger share of the financial risk.
In this case, multiple highway stretches were bundled together and offered to private players. However, there was no response from the market. According to industry feedback, developers remain concerned about traffic projections and the ability to generate stable toll revenue. Uncertainty around actual traffic growth continues to affect financial planning for such long-term projects.
Another key issue is the high upfront investment required under the BOT model. Developers are expected to arrange significant funding at the start, which becomes difficult when revenue visibility is not strong. In addition, past experiences of delays in land acquisition and project clearances have made investors more cautious before committing capital.
The government had earlier announced plans to roll out a large pipeline of highway projects under the BOT model, with the aim of reducing its own financial burden and sharing risks with private players. This included projects worth over INR 2.1 trillion, signalling a clear intent to bring back private investment into the sector.
Despite these efforts, the lack of bids for this bundle shows that confidence has not fully returned. Developers are currently more comfortable with models that offer assured returns or lower risk exposure. The response also suggests that further changes may be needed in project structuring, risk allocation, and financial terms to make BOT projects more workable.
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
