Government Seeks Private Funding to Accelerate Highway Development

Centre Eases Eligibility Criteria for Private Investment in Greenfield Toll-Road Projects

The Centre has taken a significant step to channelise private investment in infrastructure and alleviate pressure on public finances by paving the way for pension and sovereign wealth funds to directly bid for greenfield toll-road projects. This move is aimed at drawing major domestic and international investors with access to long-term capital.

According to a government official familiar with the development, the Ministry of Road Transport and Highways has eased eligibility criteria for build-operate-transfer (BOT) projects. Under the updated framework, institutional investors will be evaluated based on their financial capacity, while the required technical and construction expertise can be fulfilled through concessionaires or engineering partners brought on board after the project is awarded.

These changes have been introduced under the request for proposal (RFP) document issued recently for single-stage bidding for BOT projects. The move is part of the government's plan to increase the share of BOT projects in total highway awards to 25% over the next two years from less than 5% currently. BOT models are essentially public-private partnerships in which private entities finance, construct, and operate road projects for a set period of 20-30 years before transferring ownership back to the government.

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India's latest policy signals a change in the way infrastructure projects are financed. Over the past decade, private developers stepped back from BOT projects due to rising debt burdens and weaker-than-expected traffic forecasts, prompting the government to take on a larger share of infrastructure spending. In recent years, the Centre has allocated over Rs 10 lakh crore annually toward infrastructure to support economic growth and strengthen logistics networks.

Despite missing its goals in the previous fiscal year, the Ministry of Road Transport and Highways has maintained its target of awarding and building 10,000 kilometres of national highways in 2026-27. Highway construction reached around 9,400 kilometres in FY26 against the 10,000-kilometre target, while project awards stood at roughly 7,000 kilometres. The ministry has also set an asset monetisation target of Rs 30,000-35,000 crore for the current fiscal year, following collections of nearly Rs 29,000 crore in the last fiscal.