National Highway builders bat for BOT annuity model to avoid zero-bid scenario
The National Highways Builders Federation said the current BOT (toll) model exposes private developers to an unacceptably high level of risk, citing recent tenders that received no bids. "BOT projects fundamentally depend on a bankable and balanced risk-sharing structure. Without resolving the core concerns around unfair default classifications for traffic drops, dispute resolution and real-cost…
National highway builders have called on the road ministry to adopt the build-operate-transfer (BOT) annuity model for upcoming projects, until concerns that deter private participation in toll projects are addressed. The National Highways Builders Federation (NHBF) contends that the existing BOT toll model subjects private developers to an excessively high level of risk, as evidenced by recent tenders that yielded no bids.
BOT projects hinge on a viable and equitable risk-sharing framework. Until the fundamental issues concerning unjustified default classifications for traffic declines, dispute resolution, and real-cost delay compensation are resolved, there is a significant risk that future tenders will experience a dearth of bids and private investment, the federation asserts in its submission to the ministry.
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