New MCA Aims to Accelerate India's Highway Network

The government plans to release a revised Model Concession Agreement (MCA) for Build-Operate-Transfer (BoT) projects by April to address industry concerns, reduce disputes, and attract private investment in the highway sector. The MCA defines the legal framework for public-private partnership (PPP) projects in India.

Last year, the MCA for brownfield BoT projects was updated to offer more flexible construction support, allow borrowing from non-bank lenders, and improve compensation mechanisms when tariff projections fell short. The upcoming revision aims to further enhance security for developers as the government prepares to bid out greenfield projects. Currently, the government has a pipeline of 53 highway projects under the BoT model, valued at ₹2.1 lakh crore. Some projects are already in the bidding stage, while others are expected to be bid out within the next three months.

“The goal of the MCA revision is to ensure a fair distribution of risks among project stakeholders,” an official stated. Additionally, the Ministry of Road Transport and Highways (MoRTH) now mandates that all pre-construction requirements be fulfilled before awarding contracts.

Revitalizing the BoT model is essential as the government shifts its focus to high-speed corridors to enhance logistics efficiency, requiring substantial investment. The target is to expand high-speed corridors from 4,500 km to 50,000 km, with 25,000 km set for completion by 2030-31 and the remainder over the following five years.

News by Rahul Yelligetti.