Model Concession Agreement For Bot Model

The contract for the construction of motorway projects will only be awarded when 90 per cent of the land is acquired, which will be part of the state`s precedent. This is a must, and the private developer (concessionaire) must file a letter in which he satisfies that 90 percent of the land has been acquired before resuming the project. A dealership gives a dealer the long-term right to use all property transferred to the dealership, including operational responsibility and certain investments. Ownership of the assets remains owned by the Authority and the Authority is generally responsible for the replacement of significant assets. Assets are reset to the authority at the end of the concession period, including assets acquired by the dealer. In a dealership, the dealer generally receives most of its income directly from the consumer and therefore has a direct relationship with the consumer. A concession includes an entire infrastructure system (the dealer that supports existing assets, as well as the construction and operation of new assets). The dealer will pay a concession fee to the authority, which is generally protected and used for the exchange and extension of assets. A concession is a specific concept in civil law countries. To make things confusing, projects closer to BOT projects are called concessions in common law countries. While potential investors in the BOT toll segment welcomed this measure, they say the best and most practical way to reduce project risk is to extend the concession period flexibly to account for potential revenue transfers. Currently, the standard concession contract (MCA) authorizes such mandate changes, but a concession period cannot be extended beyond 20% of the original mandate, which is generally 20 years.

The developers want it to work. «Currently, targeted traffic testing takes place during the ninth, tenth and eleventh years from the date of the concession agreement to measure fluctuations in traffic growth over the concession period. The revision of the five-year trial date is clearly positive, as projects that are fundamentally weak due to lower-than-expected base traffic would have the potential to increase the concession period at an early stage; On the basis of which lenders can consider extending the duration of the debt in order to align the obligations with the tolls and thus reduce the cash flow burden,» said Rajeshwar Burla of Icra. Virendra D Mhaiska, The President and CEO of IRB Infrastructure, who recently distinguished himself as the highest supplier for the Bot Dankuni-Palsit project (63.83 km) and reporting a 4.5% sustainability grant, told the FE that the company has a preference for the BOT toll model, which allows investors to hold assets for more than 20 years , with a stable liquidity outlook for this period. He stated that the basic model and caps of variable concession times related to transportation would protect the interests of both the dealer and the NHAI. Privately funded motorway projects, whose prices have become low over the years, have been ended with an enhanced revenue protection clause, which was included in the revised concession pact. An inter-ministerial group (IMG) has approved major changes to the Model Concession Agreement (MCA) for the construction of privately funded highways on the Build-Operate and Transfer (BOT) toll model, which contains a tax protection clause to address traffic risks.