The Ministry of Road Transport and Highways has overhauled the model concession agreement (MCA) for build‑operate‑transfer (BOT) national highway projects, introducing traffic‑risk sharing and other measures to make such projects more bankable and attractive to private capital. The revised agreement includes a buyback option and revenue support for concessionaires, construction support mechanisms to aid timely completion, and extended tolling periods to offset revenue losses from competing roads. It also specifies clear compensation rules for force majeure events and defines termination payments if at least 40 per cent of the project is complete during construction.
A central feature is the traffic‑risk sharing mechanism, which links deviations from projected traffic volumes to adjustments in the concession period. If traffic underperforms beyond an initial support window, the concession period can be extended to help the concessionaire recover revenues; if traffic significantly outperforms expectations, the period can be reduced, balancing gains between the operator and the public authority. This directly addresses a key investor concern in BOT highways, uncertainty over long‑term traffic and toll revenues, and is intended to improve project bankability.
The National Highways Authority of India plans to award 54 projects in 2026-27, covering 2,442 km with a capital cost of Rs 1.8 trillion. Of these, seven will be under BOT, 21 under the hybrid annuity model, and 26 through EPC, with the updated BOT framework intended to make the BOT segment more investable while complementing other delivery modes.