India’s highway development strategy has encountered a fresh hurdle, with a major set of road projects failing to attract private sector participation under the toll-based concession framework.
The National Highways Authority of India recently concluded a bidding round for three large highway packages spanning over 900 kilometres across Maharashtra and Gujarat, but received no responses from developers. The outcome raises concerns over the viability of the BOT toll model at a time when the government is seeking to revive private investment in infrastructure. The projects, collectively valued at nearly ₹19,000 crore, were structured to include both greenfield construction and the operation and maintenance of existing highway stretches. Despite multiple deadline extensions and revisions to concession terms, private players chose not to participate, signalling persistent apprehensions around risk allocation and financial returns.
The BOT toll model, which requires developers to finance, build, and operate highways while recovering costs through toll collection, was once central to India’s infrastructure expansion. However, over the past decade, it has lost favour due to challenges such as delays in land acquisition, regulatory approvals, and uncertainties in traffic projections — all of which directly impact revenue streams. In response to these concerns, the highway authority had introduced modifications to its concession agreements aimed at reducing perceived risks. These included adjustments in contractual clauses and efforts to provide greater clarity on project parameters. Yet, industry observers suggest that these changes may not have gone far enough to align with current market expectations.
Infrastructure analysts point out that the lack of participation also reflects a broader shift in investor preference towards models with more predictable returns, such as the Hybrid Annuity Model (HAM), where the government shares a portion of the financial risk. Compared to HAM, the BOT toll model places greater exposure on developers, particularly in an environment marked by fluctuating traffic demand and rising construction costs. Another factor cited by developers is the limited time available for detailed project evaluation. Late-stage clarifications and evolving project details may have constrained due diligence, making it difficult for firms to commit capital at scale.
The implications extend beyond these specific projects. A sustained lack of interest in BOT-based tenders could slow efforts to diversify funding sources for India’s expanding road network. With public finances under pressure, attracting private investment remains critical for maintaining the pace of infrastructure development. From a long-term perspective, experts argue that recalibrating risk-sharing mechanisms and improving project readiness — including land acquisition and environmental clearances — will be key to restoring confidence. Transparent data on traffic and revenue projections could also play a role in rebuilding trust among investors.
As the National Highways Authority of India reassesses its approach, the next set of policy adjustments will likely determine whether the BOT toll model can regain relevance or remain a limited tool in India’s infrastructure financing landscape.
NHAI Highway Projects Worth Rs 18885 Crore See No Bidders
