The government has allowed venture capital, private equity, infrastructure and pension funds to bid for highway projects under the Public-Private Partnership (PPP) model, marking a major shift in policy since the sector was opened to private participation in the early 2000s. Until now, only highway developers and construction firms were permitted to participate in such bids, reported TOI.
As part of efforts to attract larger private investments into the road sector, the road transport ministry has revised bidding norms for Build-Operate-Transfer (BOT) toll projects. Officials told TOI that Alternative Investment Funds (AIFs) and Foreign Investment Funds (FIFs), backed by significant financial resources, are expected to bring stronger project execution capabilities while also ensuring better returns from highway assets.
These entities typically have access to long-term capital through pension and infrastructure funds. However, the extent of investor interest and the structure of future deals remain to be seen.
To ensure project quality, alternative funds will be required to submit the credentials of their proposed contractors for approval. The selected contractors must satisfy the qualification requirements laid down in the bidding document.
