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The Ministry of Road Transport and Highways has expanded eligibility norms for build-operate-transfer highway projects by allowing sovereign wealth funds, pension funds, infrastructure funds and private equity investors to participate in bidding under the public-private partnership model. The move comes after four highway projects worth nearly INR 22,000 crore failed to attract bids from private developers due to concerns over existing contract conditions. Through a modified request for proposal framework, the ministry has eased qualification norms and allowed institutional investors to partner with concessionaires or engineering firms for technical execution, aiming to improve private participation in highway development projects.
The Ministry of Road Transport and Highways (MoRTH) has widened participation norms for build-operate-transfer (BOT) highway projects by allowing large institutional investors, including sovereign wealth funds, pension funds, infrastructure funds and private equity firms, to bid under the public-private partnership (PPP) model. Advertisement
Earlier, these large funds were mainly permitted to participate in toll-operate-transfer (TOT) projects, where completed highway assets are leased to investors for operation and toll collection. The latest change now allows them to directly bid for BOT highway development projects as well.
The decision comes after four highway projects with a combined value of around INR 22,000 crore failed to receive bids from private companies. Industry participants had raised concerns regarding contract terms and risk-sharing conditions under the BOT framework, which affected investor interest.
To address these issues, MoRTH issued a modified request for proposal (RFP) document and relaxed investment and qualification norms for such projects. The revised framework is expected to attract long-term institutional capital into the highway sector at a time when the government is focusing on increasing infrastructure investment and reducing pressure on public finances.
Under the updated norms, bidders can include individuals, private entities, government-owned firms, Alternative Investment Funds (AIFs), foreign investment funds or a consortium of such entities entering through a formal joint bidding agreement.
The ministry has also separated financial and technical qualification requirements to make participation easier for institutional investors. As per the revised framework, investors will primarily be evaluated based on financial strength, while technical and construction-related qualifications can be fulfilled through concessionaires, contractors or engineering partners appointed after the project is awarded.
National highways in India are developed through multiple execution models, including BOT (toll), BOT (annuity), Engineering, Procurement and Construction (EPC), Infrastructure Investment Trusts (InvITs) and the Hybrid Annuity Model (HAM).
Under the BOT model, private developers are granted concession periods generally ranging between 20 and 30 years to finance, construct, operate and maintain highway projects. In return, developers recover investments through toll collections or agreed project structures during the concession period.
Over the past few years, the government has increasingly relied on EPC and HAM projects due to lower private participation in pure BOT projects. However, with improving traffic growth, stable toll collections and rising interest from global infrastructure investors in Indian assets, the ministry appears to be making another push to revive the BOT model.
The highway sector has seen strong investor interest in operational road assets through TOT bundles and InvIT platforms in recent years. By opening BOT projects to large global and domestic funds, the government is looking to bring patient capital into under-construction infrastructure projects as well.
Source PTI
5th Jun, 2025
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