P A R Y & Co
P A R Y & CO

Some of the significant features of Policy Initiatives taken by GoI for Attracting Private Investment in Road Sector of India

  • NHAI/ GoI will carry out all preparatory work including land acquisition and utility removal. Right of way (ROW) to be made available to concessionaires free from all encumbrances.
  • NHAI / GoI to provide capital grant up to 40% of project cost to enhance viability on a case to case basis
  • 100% tax exemption for 5 years and 30% relief for next 5 years, which may be availed of in 20 years.
  • Concession period allowed up to 30 years.
  • In BOT projects entrepreneur are allowed to collect and retain tolls.
  • Duty free import of specified modern high capacity equipment for highway construction.

Major policy initiatives have been taken by the GoI to attract foreign as well as domestic private investments. To promote involvement of the private sector in construction and maintenance of National Highways, Some Projects are offered on Build Operate and Transfer (BOT) basis to private agencies. After the concession period, which can range up to 30 years, this road is to be transferred back to NHAI by the Concessionaries.

NHAI funds are also leveraged by the setting up of Special Purpose Vehicles (SPVs). The SPVs will be borrowing funds and repaying these through toll revenues in the future. Some more models may emerge in the near future for better leveraging of funds available with NHAI such as Annuity, which is a variant of BOT model.