India Procurement News Notice - 57512

Procurement News Notice

PNN 57512
Work Detail In a significant move addressing longstanding concerns about the viability of private highway projects, the National Highways Authority of India (NHAI) has proposed a comprehensive overhaul of the Build, Operate, Transfer (BOT) model. The authority has introduced 53 road projects with a cumulative value of Rs 2 trillion, slated to be bid out in the upcoming months. Spanning a total length of 5,200 kilometers (km) across various states, these projects mark a renewed focus on privatized BOT initiatives. Uttar Pradesh, with projects valued at Rs. 50,000 crore, Maharashtra with Rs. 39,000 crore, and Tamil Nadu with Rs. 26,000 crore, dominate the Centers near-term BOT project pipeline. It is noteworthy that, out of the current pipeline of 706 national highway projects, only seven are being developed under the privatized BOT mode. In the fiscal year 2024, of the 176 projects tendered, only one was a BOT project. The BOT (Toll) mode involves contractors estimating revenue from highway projects, bearing construction costs, and recovering investments through toll rights during a specific concession period. To bolster the BOT model, NHAI has proposed ten key modifications to the Model Concession Agreement (MCA) for BOT projects. These modifications aim to address issues such as termination payment determination, adjustments in the Concession Period based on actual traffic, reevaluation of actual traffic exceeding design capacity, and clearer definitions of termination payments for delays on the part of the Authority or force majeure causes. Union Highways Minister Nitin Gadkari, speaking at a BOT workshop organized by NHAI in New Delhi, urged contractors to adopt new technologies to counter cartelization by steel and cement firms. Monopolies in these sectors have contributed to elevated construction costs for highways. The current trend sees projects being awarded through Engineering Procurement Construction (EPC) or Hybrid Annuity Mode (HAM) due to challenges in implementing BOT projects. Various initiatives, including Harmonious Substitution, One Time Fund Infusion, Rationalized Compensation, Premium Deferment, and allowing refinancing, have been undertaken to revive BOT projects and overcome implementation challenges. The proposed reforms and the ambitious project pipeline underscore NHAIs commitment to revitalizing the BOT model and accelerating infrastructure development in the country.
Country India , Southern Asia
Industry Construction
Entry Date 19 Jan 2024

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