Govt goes for investor friendly MCA for BOT project

Build-Operate-Transfer (BOT) highway projects

In a bid to revive private investment in the road sector, the Centre has proposed investor-friendly changes in the model concession agreement (MCA) for Build-Operate-Transfer (BOT) highway projects. The changes are aimed at speeding dispute resolution mechanism, mutual foreclosure agreement and harmonious substitution of the concessionaire. The amendments have been proposed after prolonged deliberations with MoRTH, Ministry of Finance, and Niti Aayog. NHAI stated that the major modifications proposed in the MCA are related to capping of liabilities of either party throughout the subsistence of the agreement, and tightening of conditions precedent prior to declaration of appointed date and dispute resolution. The move will ensure to draw a fine line of functional balance of Public Private Partnership (PPP) for development of highway infrastructure in the country. Industry experts termed the proposed amendments as incremental which will help the highways sector but may not give immediate push to BOT (Toll) projects. These are incremental changes and have to be followed in letter and spirit, said MD & CEO, Centrum Infrastructure Advisory, Sandeep Upadhyay. He added that the availability of credit was a much bigger issue for the sector and revival of BOT (Toll) projects may take some time. NHAI has invited suggestions from various stakeholders such as bankers, contractors, consultants and industry bodies on the proposed amendment.