BOT standard bidding-concession documents amended
To attract more private players and make investment opportunities more attractive, the Government has taken several initiatives like reforms in Model Concession Agreement for Public Private Partnership (PPP) Projects, reforms in model contracts for monetization of National Highways through Toll Operate and Transfer (TOT) basis and introduction of Public InvIT to widen investment scope, the Minister of Road Transport & Highways Nitin Gadkari said in a written update to the Rajya Sabha on 12 Aug.
The reforms also include Stakeholder Conferences which are held with concessionaires, financiers, and major government bodies to showcase investment opportunities to private players as well as understand & address investors’ concerns etc.
He listed out major amendments in the standard bidding and concession documents for Build-Operate-Transfer (BOT) projects on National Highways.
These are:
Enhanced bidder eligibility by permitting participation of Fund Houses on their financial strength. Upon successful award of project, they shall engage EPC contractors possessing the requisite technical experience for execution of the works.
Learning from past litigations and contractual interpretations and for greater contractual clarity; provisions relating to Change in Ownership, Target Traffic, Damages, Compensation for Breach of Agreement, Compensation for Force Majeure Costs, Payment of Construction Support during the Construction Period in Capacity Augmentation projects, Compensation for Annual Passes, and Change of Scope have been amended.
Provision for payment of Termination Compensation before the Commercial Operation Date (COD) where the physical progress of the project is 20% or more, thereby protecting the interests of both the Concessionaire and the lenders.
Streamlined provisions relating to the determination of Debt Due to remove ambiguities and provide greater certainty in their application.
Streamlined Dispute Resolution mechanism – Dispute Resolution Board abolished; Disputes less than ₹ 10 Cr to be resolved through Arbitration and Disputes of Rs.10 crore and above through Conciliation or Mediation.
The Government is focused on development of Access-Controlled National High Speed Corridors (HSCs) / Expressways, development of ring road / bypasses of cities with population of more than One Lakh with priority on those cities which have population of more than Five Lakh, development of coastal roads, connectivity of ports as per the prioritization of Ministry of Shipping, Ports and Waterways, connectivity of airports as per the prioritization of Ministry of Civil Aviation and connectivity to Industrial nodes as per the priority of National Industrial Corridor Development Corporation (NICDC) for improving the logistics efficiency of the country. These steps are directed towards broadening investment opportunities in highway infrastructure, the Minister elaborated. fiinews.com
