1. Public Private Participation in National
Highways
Focus: Role and Risks of Private Sector
Presented By:
Rashi Saxena
Priyanka Saklani
MBA-Infrastructure

2. Definition
• Mobilize private funds and focus public
funding in areas where private money cannot
be channeled

3. Need
• Budgetary constraints
• Managerial inefficiencies

4. Role Playing
Government Private Sector
Expected to provide land Expected to invest funds
for the project site, during the construction
regulatory clearances, and and maintenance phases
a concession right to the of infrastructure projects
contractor/ concessionaire

6. Graph: Growth of PPP’s in Roads over the years

7. Challenges
• High initial investment
• Long gestation period
• Transfer of control rights over public assets to
private hands
• Risk allocation between public and private
sectors

8. Model Concession Agreement
• It is a policy and regulatory framework to
address issues important for limited recourse
financing of infrastructure projects
• It also addresses other important concerns
such as user protection, independent
monitoring, dispute resolution and financial
support from the Government.

9. Financial Viability of Highway Projects
• Capital cost is the variable that will determine
the financial viability of a project
• Bidders would, therefore, seek appropriate
capital grant/subsidy from the NHAI

10. Policy Provisions
The policy essentially provides for two kinds of
contracts:
• BOT Toll Contracts (BOT, BOOT, etc.)
• BOT Annuity Contracts
• SPV Contracts

11. Risks faced by a Concessionaire
• Revenue Risk/Traffic Risk
• Force Majeure
• Environmental Risk
• Construction and O&M Risk
• Financial Risk
• Regulatory Risk/Political Risk

12. Questions?
THANK YOU!