The Ministry of Road Transport and Highways (MoRTH) has opened the door for large financial investors to bid for build-operate-transfer (BOT) road projects, after several projects failed to draw private interest due to concerns over contract terms. Previously, such big funds were permitted to participate only in toll-operate-transfer (TOT) projects.
Under the revised norms, sovereign wealth funds, infrastructure and pension funds, as well as private equity investors, can now bid for BOT projects. In a modified request for proposal (RFP), MoRTH has eased investment norms for these projects, following a failed bidding round for four highway projects worth about Rs 220 billion under the BOT model.
The updated RFP states that bidders may be a natural person, private companies, government-owned entities, Alternative Investment Funds (AIFs), foreign investment funds, or any combination of these, with a formal intent to form a consortium through a Joint Bidding Agreement. Institutional investors will be evaluated mainly on their financial strength, while construction-related technical criteria can be fulfilled through concessionaires or engineering partners brought on board after the project is awarded.