The road construction companies ET spoke with said absence of an arbitration provision and timeline as low as two years even for greenfield projects made these projects risky.
According to people in the know, the four critical infrastructure corridors which have not found bidders include the ₹8,300 crore Ahilyanagar-Hasapur project, the ₹6,900 crore Adgaon-Ahilyanagar project, the ₹3,700 crore Tharad-Ahmedabad project and the ₹3,400 crore Badvel-Nellore project.
Email queries sent to the ministry of road transport and highways (MoRTH) and the National Highways Authority of India (NHAI) remained unanswered till as of press time.
A senior government official said there are issues with the terms of the BOT agreement and the government is reviewing them.
However, there are apprehensions that too much delay in addressing the terms of the contract–in line with the expectations of the private sector–could shift the focus back on the hybrid annuity model (HAM) or the engineering, procurement and construction (EPC) model where the financial burden falls on the government. This would result in a possible escalation in public funding, which is already under stress due to the geopolitical uncertainty in the world.
“This is not a routine market fluctuation. It is a clear and collective rejection by the private sector which thinks India’s BOT (toll) model, in its current form, is no longer investable,” said a highway developer, requesting not to be named.
Most contractors feel that the government’s recent restriction on arbitration for claims above ₹10 crore has shaken the confidence of investors, who are unwilling to take risk in the absence of an independent and time-bound resolution mechanism.
Another concessionaire said mega projects are being bid out with compressed timelines–in some cases as low as 24 months–despite incomplete land acquisition, delays in utility shifting and pending statutory clearances.
“It is risk transfer without accountability, inevitably leading to cost overruns and disputes for the private sector,” said one of the concessionaires.