New Delhi: Seeking to revive private investment in the roads 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 putting in place a progressive dispute resolution mechanism, mutual foreclosure agreement and harmonious substitution of the concessionaire.
Industry experts termed the proposed amendments in the MCA as incremental which will help the highways sector but may not give immediate push to BOT (Toll) projects.
"These are incremental changes. It has to be followed in letter and spirit," said Sandeep Upadhyay, MD & CEO, Centrum Infrastructure Advisory.
He added that the availability of credit was a much bigger issue for the sector and revival of BOT (Toll) projects may take upto nine months.
Apex highways development agency National Highways Authority of India (NHAI) has invited suggestions from various stakeholders such as bankers, contractors, consultants and industry bodies on the proposed amendment.
"The amendments have been proposed after deliberations with Ministry of Road Transport and Highways (MoRT&H), Department of Economic Affairs, Ministry of Finance, and Niti Aayog," the NHAI said in a statement.
The major modifications proposed in the MCA are related to capping of liabilities of either party throughout the subsistence of the agreement, tightening of conditions precedent prior to declaration of appointed date and dispute resolution.
The central road building agency and regulator said that 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.
The private sector interest in the road sector has been tepid forcing the government to substantially scale up public spending.