India clears path for big funds to bid directly for road projects

India has allowed pension and sovereign wealth funds to directly bid for greenfield toll-road projects as the government strives to channelise private investment in infrastructure and ease pressure on public finances.

The Ministry of Road Transport and Highways has relaxed eligibility norms for build-operate-transfer, or BOT, projects to attract large global and domestic funds with long-term capital, said a government official familiar with the matter.

Under the revised framework, institutional investors will be assessed on financial strength, while construction-related technical qualifications can be met through concessionaires or engineering partners hired after the project award, the official told ET.

These changes have been introduced under the request for proposal (RFP) document issued recently for single-stage bidding for BOT projects, the official said.

The move is part of the government’s push to raise the share of BOT projects in total highway awards to 25% over the next two years from less than 5% currently. BOT highway projects are public-private partnerships.

Under BOT model, private entities finance, construct, and operate road projects for a set period of 20-30 years before transferring ownership back to the government.

The latest policy marks a shift in India’s infrastructure financing model, which has relied heavily on government spending after private developers retreated from BOT projects in the past decade amid debt stress and weak traffic projections. The Centre has spent more than Rs 10 lakh crore annually on infrastructure in recent years to sustain economic growth and logistics expansion.

The road ministry has retained its targets for awarding and constructing 10,000 kilometres of national highways in 2026-27, despite falling short of its goals last fiscal year. Highway construction reached about 9,400 kms in FY26 against a target of 10,000 kms, while awards totalled about 7,000 kms. The ministry has also set an asset monetisation target of Rs 30,000-35,000 crore for this fiscal, after achieving about Rs 29,000 crore in the previous fiscal.