Now Reading: Highway builders seek changes in revised BOT model
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Highway builders seek changes in revised BOT model
The National Highways Builders Federation (NHBF) has flagged risks in the revised Build-Operate-Transfer (BOT) model and sought changes on 16 issues. The demands include removing the Rs 10 crore threshold for arbitration, reducing annual premium escalation from 1% to 0.25%, and cutting the no-support band for traffic risk from 10% to 5%. The federation also objected to treating a 20% traffic decline over two consecutive years as a concessionaire default, arguing systemic causes like macroeconomic conditions or policy changes are beyond developers' control.
Other key demands include reimbursement of actual losses in case of Authority Default or deemed termination, changes to the Change of Scope valuation framework, linking grant or equity support to physical construction milestones, and recognition of global supply-chain disruptions. NHBF also wants the 90% construction-zone requirement to mean land that is physically available, encumbrance-free and workable for construction.
The federation has proposed an institutional or ad-hoc arbitration mechanism instead of the current restriction. These changes aim to address investor and lender concerns under the revised BOT model for national highway projects.
Indian Opinion Analysis
Businesstoday.in's report is a straight neutral account of NHBF's demands, with no government or opposition framing. It leads with the industry's concerns and lists each demand factually, without endorsing or contesting them. The report does not include any response from the Ministry of Road Transport and Highways or NHAI, leaving the government's stance absent. A careful reader should note that while the demands are detailed, the viability of the BOT model depends on whether the government accepts these risk-sharing changes. Watch for the ministry's official response or a revised model concession agreement in the coming months.
Coverage: 1 source, 1 neutral
Source: businesstoday.in (neutral report)
This story was synthesised by AI from the source linked above. Methodology and corrections.
