TRANSPORTATION

Road construction: BOT model may not work in current conditions

As efforts to revive the economy gain pace, the Centre is right in trying to boost the road construction sector due to its employment generation capability and its GDP multiplier effect. It is also obvious that the Centre’s dire financial position does not leave any room to increase its capital expenditure and, worse, even to meet the budgeted expenditure for FY21, making public-private partnerships practically the only way out of this situation. Among the PPP road construction models, the Build, Operate and Transfer (BOT) model lays the least financial burden on the Centre, and therefore the focus is now on attracting bids for these projects. An inter-ministerial group has approved many significant changes to the model concession agreement for building highways under the BOT model. The most important change is to assess the revenue of the project every five years, instead of 10 years prescribed currentl

Source
the hindu businessline
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