en.Wedoany.com Reported - India's Ministry of Road Transport and Highways has revised its bidding rules to allow institutional investors such as sovereign wealth funds, pension funds, and private equity firms to directly participate in highway construction projects under the public-private partnership model.
Previously, the private sector showed lukewarm interest in multiple highway construction projects, with reports indicating that four projects worth a total of approximately 220 billion rupees failed to attract bids due to contract terms and project risk concerns. The revised framework aims to broaden the investor base and address bottlenecks in the initiation of highway construction projects. Under the modified bidding proposal framework, entities such as infrastructure funds, alternative investment funds, and foreign investment funds can now submit bids independently or as part of a consortium, whereas their participation was previously mainly limited to toll-operate-transfer projects. The new rules also relax the technical qualification requirements for institutional investors, allowing construction-related expertise requirements to be met through a concessionaire or engineering partner appointed after winning the bid, while bidders will continue to be evaluated based on financial strength.
India's Ministry of Road Transport and Highways expects that allowing diverse long-term investors will improve the inflow of private capital into the highway construction sector and help revive highway construction projects stalled due to a lack of bidders. The development of national highways employs various models, including build-operate-transfer on a toll or annuity basis, engineering procurement construction, the hybrid annuity model, and infrastructure investment trusts. Under the build-operate-transfer model, a private entity finances, builds, and operates a highway construction project over a concession period of 20 to 30 years, recovering its investment through toll collection. The ministry stated that these revisions are part of broader efforts to broaden financing channels and accelerate the delivery of highway construction capacity.
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