The government has changed the rules for awarding toll highway projects, making it easier for large investors, global funds, and financial institutions to directly enter India’s road sector.

The new framework, issued by the Ministry of Road Transport and Highways (MoRTH), will now be used for future Build-Operate-Transfer (BOT) toll projects by agencies such as NHAI.

In simple terms, BOT projects are those in which a private company builds a highway, operates it for several years, collects tolls from users, and recovers its investment.

The biggest change in the new rules is that the government is now allowing financial investors — and not just construction companies — to bid for highway projects.

This means infrastructure funds, sovereign wealth funds, pension funds, and other big investors can directly participate in toll road projects even if they do not build roads themselves. They will, however, have to hire experienced construction companies to execute the work.

Why does this matter?

Because the government wants private money to flow back into highways.

Over the last several years, many companies stayed away from BOT projects due to high traffic risk and funding pressure. As a result, the government increasingly shifted towards EPC and HAM projects, where the financial burden was lower for private players.

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Now, with traffic improving and highway usage rising, the Centre is trying to revive the BOT model once again.

The new document also changes how winners will be selected.

If companies believe a highway can generate strong toll income, they may offer to pay a “premium” to the government to win the project. If no one offers a premium, then the project will go to the company seeking the least government support or grant.

The rules have also become stricter for bidders.

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Companies must meet minimum financial strength requirements, maintain good credit ratings, and disclose details of ongoing projects. Firms that have been blacklisted or labelled as poor performers by government agencies can be barred from bidding.

The government has also added extra checks for foreign-controlled bidders. Any company with over 50% foreign ownership may need additional approval from the government from a national security perspective.

Another key focus is construction quality. Contractors linked to serious structural failures or poor-quality work in recent years may not be allowed to participate in these projects.

Published on: May 8, 2026 8:16 PM IST