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MoRTH issues amendments to the model concession agreement for BOT (Toll) model

Highway at sunset with light trails from passing vehicles and lush greenery along the roadside.

Please click here to download the Prism as PDF.

Pursuant to extensive deliberations with the implementing agencies and the sector stakeholders, the Ministry of Road Transport and Highways, Government of India (“MoRTH”) issued several amendments to the Model Concession Agreement for Build Operate Transfer (Toll) (“BOT (Toll)”) road projects (“MCA”) on March 15, 2024. Some of the critical amendments are discussed below:

1. Change in Ownership

Earlier, in case of a consortium, each member, whose financial and technical criteria were considered during bid evaluation, was required to hold 26% equity in the concessionaire/ project SPV for the construction period and a period of 1 (one) year from the date of completion of Punch List (as defined in the MCA). An amendment has been made to the above provision to clarify that each such member shall hold: (a) 26% of such equity in the concessionaire which will also not be less than 5% of the Total Project Cost; and (b) this period of 1 (one) year that is computed from the date of completion of the Punch List items will exclude the Punch List items pending due to reasons attributable to the National Highways Authority of India (“NHAI”)/ governmental authority.

2. Performance Security

Prior to the amendment, the NHAI accepted performance security in the form of a bank guarantee. Now, in addition to bank guarantees, the amended MCA permits concessionaire to furnish performance security in the form of insurance surety bond issued by an insurance company authorized by Insurance Regulatory and Development Authority of India, accounts payee demand draft, banker’s cheque or e-bank guarantee from banks set out in the MCA. Further, the quantum of the performance security is now revised to 3% of the Estimated Project Cost (as defined in the ‘request for proposal’). Earlier, the amount was 5% of the Total Project Cost (as defined in the MCA) plus the anticipated toll revenues for 12 (twelve) months.

3. Change of Scope

Under the earlier draft of the MCA, NHAI could initiate change of scope when it required additional works or services to be performed by the concessionaire. The amended provision in the MCA allows NHAI to also make any modifications in the scope of work as part of change of scope.
Further, in the earlier iteration of the MCA, in the event the NHAI issued a change of scope notice, the concessionaire was only required to provide preliminary documentation providing, inter alia, the options for implementing the proposed change of scope. The provision has been amended in the MCA requiring concessionaires to furnish detailed proposal and mandatory information for implementing the change of scope. This includes inter alia: (i) break-up of the quantities, unit rates and cost for different items of work; (ii) proposed design for the change of scope; and (iii) proposed modiﬁcations, if any, to the Scheduled Completion Date.
The amended MCA also sets out the method for determination of cost and time for implementing a proposed change of scope, which was absent in the previous MCA document.

4. Construction Support and Equity Support

Earlier, the NHAI only provided equity support to the concessionaire under the MCA. The revised MCA has introduced the new concept of construction support, which will be provided to the concessionaire during the construction period. Such construction support will be paid in 10 (ten) equal installments linked to the completion of physical progress of construction. This amount will be assessed by the NHAI based on the estimated toll revenue during the construction period, subject to a maximum of 40% of the Total Project Cost (as defined in the MCA).

The previous iteration of the MCA provided equity support up to a sum of 10% of the Total Project Cost. In the amended MCA, equity support and construction support will be provided to the concessionaire up to 40% of the Total Project Cost. It has been clarified that in case the quantum of construction support goes up to 40% of Total Project Cost then the provisions of equity support in the MCA and the other bidding documents will not apply.

5. Buy back of the project by NHAI in case project reaches design capacity

In the earlier iteration of the MCA, if the average daily traffic of passenger car units (“PCUs”) in any financial year exceeded the design capacity, it was considered to be an Indirect Political Event and in case of termination on such account, a certain amount of termination payment was payable by NHAI as per the terms of the MCA. The MCA has been amended to introduce the concept of buy back which allows NHAI to buy back the project from the concessionaire if the average daily traﬃc in PCUs (as defined in the MCA) in any 2 (two) financial years in a block of 3 (three) continuous accounting years reaches the design capacity. This buy back would take place by way of NHAI terminating the concession agreement by giving 90 (ninety) days’ termination notice. Upon such termination, the NHAI will pay higher of the following amounts as termination payments to the concessionaire:

80% of the product of the average monthly fee and 75% of the balance concession period, after deducting cost of major maintenance provisioned in the Financial Model in the remaining concession period;

Termination payment payable on occurrence of Indirect Political Event of force majeure.

6. Obligations of Authority in relation to Competing Roads

In the earlier iteration of the MCA, NHAI or any government instrumentality was not permitted to construct or cause to be constructed any Competing Road (as defined in the MCA) at any time before the 10^th (tenth) anniversary of the Appointed Date, except in cases where the average traffic on the project highway in any year exceeded 90% of its design capacity. Upon breach of this obligation, the NHAI was liable to pay compensation to the concessionaire. In the amended MCA, the NHAI is also required to provide extension of the concession period. It has been further clarified that such payment of compensation and extension of concession period will be deemed to cure the breach by NHAI.

7. Modifications in concession period based due to construction of additional tollway

The MCA originally restricted the NHAI or any government authority from constructing or initiating construction of an Additional Tollway (as defined in the MCA) during the construction period. Upon breach of the said obligation, apart from receiving compensation from NHAI, the concessionaire was also entitled to extension of the concession period with the enhancement of concession period being equal to the duration of the period between the opening of Additional Tollway and completion of concession period. This extension of concession period was only permissible if the effect of construction of Additional Tollway caused enhancement in the concession period beyond 20% of the original concession period.

Under the amended MCA, the above restriction on construction of Additional Tollway, on the NHAI/ government authority, has been imposed for the entire concession period. Further if an Additional Tollway is constructed by the NHAI/ governmental authority, the extension in the concession period will be on the basis of shortfall in traffic on account of construction of such additional tollway and such extension will also be capped to 30% of the original concession period. The amended MCA clarifies that such extension of concession period will be deemed to have cured the breach by NHAI/ governmental authority.

8. Compensation for default of authority

Previously, in case of material breach of the concession agreement by NHAI after the Appointed Date, the compensation payable to the concessionaire was the same irrespective whether such breach had occurred on or after the commercial operation date (“COD”). This remedy was in the nature of compensation of all direct costs suffered or incurred by the concessionaire as a consequence of such material default or breach by NHAI.

The amended MCA introduces different compensation mechanism for: (i) the period starting from the Appointed Date till achievement of COD; and (ii) the period after COD. For the period prior to COD, NHAI will compensate concessionaire for the direct costs suﬀered by the concessionaire and loss of toll fee revenue provided that this compensation will not include debt repayment obligations. The amended MCA also provides for a detailed mechanism through which direct costs suffered by concessionaire on account of material breach will be calculated.

For the period after the COD where material default or breach leads to suspension of or reduction in collection of toll fee by concessionaire, NHAI will pay as compensation: (a) interest on the Debt Due and (b) operating and maintenance expenses as determined from the original draft of the financing agreements.

9. Termination Payments

Under the amended MCA, the definition of ‘Termination Payment’ specifies that, at any time during the concession period, the aggregate of Debt Due and Adjusted Equity will be limited to the Total Project Cost.

Under the earlier MCA, termination payment on account of concessionaire’s default was not payable prior to the Project Completion Date. An amendment has been made to state that termination payment to concessionaire will not become payable prior to COD in case physical progress is less than 40% and that in the event of physical progress exceeds 40%, termination payment payable on occurrence of concessionaire default after COD will apply, in respect of the expenditure exceeding 40% of the Total Project Cost and to the extent applicable to Debt Due. Further, the aggregate liability of NHAI for making termination payment on account of concessionaire default has been increased to 115% of the Total Project Cost from the earlier 100%.

Conclusion

The BOT (Toll) model for road concessions witnessed a slowdown as the private developers faced viability concerns on account of issues such as delays in receiving right of way and environment clearances during the construction period, lack of financing available from the lenders, changing traffic flow on account of alternate routes being developed. Resultantly, NHAI focused on the other modes of project implementation where government absorbed the financial risk. This, in the long run, caused financial burden to NHAI and MoRTH and therefore, the government has been keen on reviving the BOT (Toll) model. In this regard, significant amendments have been made to the MCA as described above.

Some of the amendments which may prove beneficial for concessionaires include introduction of construction support of up to 40% of the Total Project Cost, disallowing the government from constructing Additional Tollway for the entire duration of the concession period as opposed to construction period, providing additional remedy of extension of concession period along with compensation, in case the NHAI breaches its obligations towards not constructing Competing Roads. Having said so, some of the amendments may also prove to be onerous for concessionaires such as right of termination to the NHAI in case concessionaire fails to complete construction as per revised schedule of construction, the requirement of submitting extensive and detailed documents at the time of change of scope and for monthly progress reports.

Nevertheless, the outlook for BOT (Toll) projects looks positive with the NHAI having identified 53 BOT (Toll) projects worth INR 2.2 lakh crore (Indian Rupees two point two lakh crore) and covering a length of 5200 kms (five thousand two hundred kilometers) to be bid out across various states in India during the course of the present financial year.

This Prism has been prepared by:

Ashish Suman
Partner

Ayan Sinha
Senior Associate

Shruti Maheshwari
Associate

For more details, please contact [email protected]

Tags Infrastructure, JSA, Leading Law Firm, Leading Lawyers, Legal Updates, Roadways

India Today Infra Conclave | Getting Infrastructure Financing Right: Innovations And Possibilities

Our Joint Managing Partner Amit Kapur participated in a panel discussion at the India Today Infra Conclave on the theme “Getting Infrastructure Financing Right: Innovations and Possibilities” which was held on 18^th November in New Delhi. The session also included senior dignitaries like Punjab & Sind Bank Non-Executive Chairman Dr. Charan Singh and Harry Dhaul, Director General, Security Watch India. The session focused on addressing how India plans to finance its infrastructure upgrades.

As part of the discussion, Amit addressed whether there is a perceptible shift in the dynamics of debt markets, project structuring, and government reliance for regulatory approvals, as the government endeavours to de-risk projects, or are we potentially reverting to past challenges in project viability.

Amit highlighted the challenges in India’s infrastructure financing, emphasizing the mismatch between long-term asset lifespans and short-term debt structures. He adds that there is a need for a comprehensive and citizen-focused approach, efficient contract management, and regulatory reforms are underscored to address the complexities in infrastructure development and reduce the burden on consumers.

Tags Disputes, Infrastructure, JSA, JSA Live, Leading Law Firm, Leading Lawyer, Legal

Transworld Holdings Limtied makes a voluntary offer to delist the equity shares of Shreyas Shipping and Logistics

JSA advised Transworld Holdings Limited in its offer to voluntarily delist the equity shares of Shreyas Shipping & Logistics Limited from the BSE Limited and the National Stock Exchange of India Limited.

Transworld Group offers a comprehensive one-stop solution to customers for all their shipping & logistics needs. from ship owning & management to supply chain management, warehousing, road transportation, air freight, freight forwarding, aviation, feeder services, liner, and shipping agencies.

Our Transaction Team Lead Partner – Anand Lakra, Senior Associate – Ami Shah, and Associate – Dhruval Sheth.

Tags Construction and Engineering, Delisting, JSA, Leading Law Firm, Leading Lawyers, Transport and Logistics

JSA Prism | Infrastructure | September 2023

Please click here to download the Prism as PDF.

India signs memorandum of understanding to establish India-Middle East-Europe Economic Corridor during the G-20 Summit

On September 9, 2023, on the sidelines of the G-20 Leaders’ Summit hosted by India, the United States and India co-chaired a separate special event, where the Governments of India, United States of America, Saudi Arabia, the United Arab Emirates, France, Germany, Italy and the European Union (“Participating Nations”) signed the memorandum of understanding (“MoU”) to set up India-Middle East-Europe Economic Corridor (“IMEC”) which will be focused on infrastructure development and strengthening connectivity and cross border trade across India, Middle East and Europe. The MoU is aligned with Government of India’s initiatives such as Sagar Mala and Atmanirbhar Bharat to give boost to India’s economic and trade development.

The IMEC project has been launched under the framework of Partnership for Global Infrastructure and Investment (“PGII”), which was officially launched in 2022 at G7 Summit hosted by Germany as an initiative for funding infrastructure projects in developing countries.

Key Features of IMEC

Under the MoU, the Participating Nations have agreed on the following aspects of IMEC:

The IMEC will consist of 2 (two) separate corridors:
1. East Corridor, which will be connecting India to the Arabian Gulf; and
2. Northern Corridor connecting the Arabian Gulf to Europe.
The IMEC project will consist of a network of transport corridors, encompassing cross-border ship-to-rail transit lines to supplement existing maritime and road transport routes. This would enable goods and services to transit to, from, and between India, the United Arab Emirates, Saudi Arabia, Jordan, Israel, and Europe.
The IMEC project also envisages laying down, alongside the railway line, cables for electricity and digital connectivity, as well as pipelines for clean/green hydrogen export.

Objectives of IMEC

As agreed by the Participating Nations under the MoU:

The IMEC project will be aimed at securing regional supply chains, increase trade accessibility, improve trade facilitation, and support an increased emphasis on environmental social, and government impacts. Moreover, the corridor project will ensure increase in efficiencies, reduction of costs, enhancement of economic unity, generate jobs, and lower greenhouse gas emissions.
The Participating Nations have committed to arrange and implement all elements of these new transit routes, and to establish coordinating entities to address the full range of technical, design, financing, legal and relevant regulatory standards.

Impact of IMEC

Through the implementation of the IMEC project, the Participating Nations, including India foresee positive outcomes such as:

creation of opportunities for promotion of trade and economic cooperation between the Participating Nations in the fields of connectivity, logistics, freight infrastructure, clean energy and hydrogen production, enhanced transportation of energy resources and digital communications;
the project would lessen the infrastructure deficit, thereby boosting growth in the developing nations;
this initiative is likely to create immense opportunities for India in the logistics as well as transportation sector as it will enable India to facilitate the trade flows from South-East Asia to the Middle East, West Asia and Europe
It will provide a faster and cheaper transit option which will give an impetus to India’s trade and exports.

The Participating Nations intend to meet within the next 60 (sixty) days to develop and commit to an action plan with relevant timetables. Considering that the next step will be to establish coordinating entities from each nation and to lay down technical, design and appropriate legal and relevant regulatory standards, it will be interesting to observe the legal and regulatory framework which will be laid down in the coming months for establishing the infrastructure under this project. It will also be noteworthy to observe the agency which will be appointed by India to implement this project.

This Prism has been prepared by:

Ashish Suman
Partner

Ayan Sinha
Senior Associate

Shruti Maheshwari
Associate

For more details, please contact [email protected]

Tags Europe, G-20 Summit, Infrastructure, JSA, Leading Law Firm, Leading Lawyers, Legal Updates

JSA successfully represents IntelliSmart Infrastructure Pvt. Ltd. before the Hon’ble Supreme Court in a challenge concerning award of a tender

A Notice Inviting Tender (‘NIT’) was floated by North Bihar Power Distribution Company Ltd. (‘North Bihar Discom’) for appointment of ‘Advanced Metering Infrastructure Service Providers’, including design of ‘Advance Metering Infrastructure System’ with supply, installation and commissioning of 112 Lakh ‘Smart Prepaid Meters’ in rural areas of Bihar. The tender is based on the Ministry of Power’s Revamped Distribution Sector Scheme which recognizes the importance of Prepaid Smart Meters to reduce distribution losses, facilitate automatic measurement of energy flows, energy accounting and enabling Time-of-day tariff without human intervention. Rural Electric Corporation (‘REC’) is the nodal agency for implementation of the Smart Metering Program and had framed a Standard Bidding Document (‘SBD’) in terms of which various states have floated tenders inviting bids for installation of Smart Meters.

M/s. Monte Carlo Projects Ltd. (‘Montecarlo’) submitted its bid, amongst other bidders. Montecarlo’s bid, however, was disqualified at the technical stage for not meeting the qualification requirements. M/s. IntelliSmart Infrastructure Pvt. Ltd. (‘IntelliSmart’) was declared as the ‘L1’ bidder.

Montecarlo challenged its disqualification before the Hon’ble High Court of Judicature at Patna (‘High Court’) by way of a writ petition. This challenge was premised on the grounds that the terms and conditions of the NIT were not interpreted properly by North Bihar Discom. Montecarlo had sought to rely on certain clarifications regarding applicability of the terms and conditions of the tender which were provided by REC, the Nodal Agency. By a judgment dated April 20, 2023, the High Court dismissed Montecarlo’s challenge holding that:

Clarifications by REC are not relevant, and the scope of challenge must be limited to the terms of the NIT;
Montecarlo was not able to present sufficient cause for interfering with their disqualification; and
Montecarlo did not meet the criteria under the NIT.

Montecarlo challenged the judgement dated April 20, 2023 before the Hon’ble Supreme Court. Being the L1 bidder, IntelliSmart filed an Application for impleadment on the ground that it is a necessary and proper party to the proceedings. IntelliSmart’s prayer for impleadment was allowed.

During the course of final hearing, North Bihar Discom opposed Montecarlo’s challenge to the High Court’s judgment on various grounds. IntelliSmart too opposed Montecarlo’s challenge on the grounds, inter-alia, that: –

The owner/ tenderer is best suited to interpret the terms of the tender;
Judicial interference in infrastructure projects of public importance should not be allowed; and
Terms and conditions of a tender are not open to judicial scrutiny except when they are found to be arbitrary, mala fide or discriminatory.

After hearing the parties, the Hon’ble Supreme Court was pleased to affirm the judgment of the Hon’ble High Court, which in turn had upheld Montecarlo’s disqualification.

Our Disputes Team Partners – Amar Gupta, Anupam Varma, Sidharth Sethi, and Nikhil Sharma, Principal Associate – Aditya Gupta and Associate – Aditya Vikram Dhingra.

Tags JSA, Leading Law Firm, Leading Lawyers, Notice Inviting Tender, REC, SBD, Urban Infrastructure

JSA Newsletter | Highways & Logistics | July 2023

Please click here to download the Prism as PDF.

This JSA Highways & Logistics Newsletter focuses on key developments undertaken in the Indian roadways and logistics sector between April – June 2023.

Relief measures to contractors on account of COVID

The Ministry of Road Transport and Highways (“MoRTH”) issued a circular dated May 4, 2023 extending certain relief measures, available to the contractors/developers of Hybrid Annuity Model (“HAM”)/ Engineering Procurement Construction (“EPC”) projects in the road sector, until March 31, 2024. The relief measures include:

Schedule G/H of the relevant HAM/ EPC contracts pertaining to the release of portion of contract price for different stages of construction, will continue to remain relaxed allowing contractor/developer monthly payments for completed work as per specifications.
The competent departmental authority will continue to make direct payments to the approved subcontractors for the works completed to the approved subcontractors and wherever the competent authority is of the view that such direct payments are required for the early completion of works.
Performance security for all existing contracts will remain reduced from 5-10 % to 3% of the contract value, excluding the disputed contracts (whether commenced or completed). All tenders /contracts issued/ concluded till March 31, 2024 will have a reduced performance security value. However, as per the circular, to ensure quality of work being executed, the project executing agencies have been advised to ensure that in case of abnormally low bids, additional performance security is realized as per the latest guidelines provided by Department of Expenditure, Ministry of Finance.

The circular clarifies that retention money is a part of the performance security till construction period. Hence, release of retention money may be continued in proportion to the work already executed and no reduction of retention money may be made from the bills raised by the contractor till March 31, 2024. The circular states that for HAM/Build Operate Toll (“BOT”) contracts, performance guarantee may be released on pro-rata basis, as provided in the contract, if concessionaire is not in breach of the contract.

[Source: Notification dated May 4, 2023]

Clarifications for accommodation of public utility services along national highways

The MoRTH issued a clarification dated April 17, 2023, (“Clarification”) amending the policy circular dated November 22, 2016 (“Policy Circular”) in relation to permissions and right of way granted for laying down optical fiber cables and telecom cables. The key amendments to the Policy Circular are as follows:

The Clarification allows horizontal directional drilling without casing/ conduit pipe for petroleum products pipelines crossing national highways, provided certain safety precautions and codes mentioned in the Clarification are complied with.
The Policy Circular stated that the public utilities’ license fee/ lease rental for using highway land would be 33% of the fee prescribed for industrial utilities. However, as per the Clarification, this condition has been done away with, and the following new fee calculation method for both sectors has been prescribed:
1. License fee for industrial utilities = Utilized National Highway Land Area X prevailing circle rate of land per unit area X 10% per annum
  Utilized National Highway Land Area will include projection of utility on ground including area of support system / tower.
2. License fee for public utilities = Utilized National Highway Land Area X prevailing circle rate of land per unit area X 1.5% per annum, subject to a minimum of INR 10,000 (Indian Rupees ten thousand), with 6% annual increment.
  Utilized National Highway Land Area will include area of support system / tower but will not include projection of utility on ground.
  For both of the above, the fee has to be deposited in advance.

The Clarification removes the classification for the purpose of computation of license fees which bifurcated utilities between: (a) localized infrastructure facilities such as towers, repeaters and junction boxes; and (b) other utilities.
There will be no license fee payable for optical fiber cables crossing national highways through horizontal directional drilling.

[Source: Clarification dated April 17, 2023]

Draft Motor Third Party Premium and Liability Rules, 2023-24

MoRTH in consultation with Insurance Regulatory and Development Authority of India (“IRDAI”) notified the draft Motor Third Party Premium and Liability Rules, 2023-24 (“Draft Insurance Rules”) on June 14, 2023 whereby the base premium rates for motor vehicle third party insurance has been proposed for various types of vehicles for public comments and consultation.

As per the Draft Insurance Rules, a 15% discount on the premium is proposed for buses for educational institutions, 50% discount on premium is proposed for private cars which are registered as vintage cars, a discount of 15% is proposed for electric vehicles (EVs) and a discount of 7.5% for hybrid EVs.

[Source: Draft Insurance Rules, 2023-24]

Proposal to set up control rooms for monitoring issues on national highways due to heavy rains

On June 27, 2023, the MoRTH issued an office memorandum to set up a control room for monitoring issues impacting national highways on account of heavy rainfall. The control room will be made operational with immediate effect and the terms of reference of the officers in the control room will include: (a) receiving calls from the public and government agencies and informing the concerned implementing agencies to resolve the issue; (b) monitoring electronic media platforms for any issues arising on national highways on account of heavy rainfall; (c) receiving input/ collect information from regional officers in relation to any problems being faced on the national highways.

As per the office memorandum, the officers in the control room will ensure that any information relating to blockage or damage to national highways on account of rainfall will be brought to the notice to the concerned regional officers. The control room will also keep a record of all calls received by them in chronological order.

[Source: Office Memorandum dated June 27, 2023]

All India Tourist Vehicles (Permit) Rules, 2023 notified

The MoRTH notified the All India Tourist Vehicles (Permit) Rules, 2023 on April 18, 2023 (“Tourist Vehicles Rules”). superseding the All India Tourist Vehicles (Authorisation or Permit) Rules, 2021.

Some of the key provisions of the Tourist Vehicles Rules are as follows:

An All India Tourist Permit will only be granted to a tourist vehicle of a tourist vehicle operator. The application for a permit or for renewal of a permit has to be made electronically on the portal maintained by the relevant state transport authority and the prescribed fees has to be paid depending upon the capacity of the tourist vehicle.
If the relevant state transport authority does not make a decision within 7 (seven) days of receipt of application for a permit, the All India Tourist Permit will be deemed to have been granted to the applicant.
An exception has been created whereby for battery operated tourist vehicle and tourist vehicle driven on methanol or ethanol fuel, the All India Tourist Permit will be issued without payment of any fee.
A tourist vehicle will not be granted the All India Tourist Permit after the vehicle has completed 12 (twelve) years from the date of first registration of the vehicle. However, in the case of diesel vehicles registered in the National Capital Territory of Delhi, the All India Tourist Permit will not be granted after the vehicle has completed 10 (ten) years from the date of its first registration.
No person will use the registered tourist vehicle for the transport of tourists individually or in a group, unless the person has a valid All India Tourist Permit.
Tourist vehicles which have been granted All India Tourist Permit under these rules must prominently display the words “All India Tourist Permit” on rear left side of the vehicle in white letters against a blue background along with the validity of the permit.
A tourist vehicle plying under the All India Tourist Permit, will have to carry for a minimum period of 1 (one) year, a list of tourists in electronic form or in physical form, along with the details of origin and the destination of each tourist. The tourist vehicle operator must maintain electronic records of the tourists, including journey details, and these records must be made available to the jurisdictional transport authority or any other law enforcement officer on demand.
The All India Tourist Vehicle Permit may be cancelled if: (a) the permit holder ceases to own the vehicle covered by the All India Tourist Permit; (b) uses or causes or allows a tourist vehicle to be used in contravention to the provisions of Tourist Vehicles Rules or the Motor Vehicles Act, 1988; (c) the holder of the All India Tourist Permit acquires the citizenship of any foreign country; and (iv) the permit holder obtained the All India Tourist Permit by fraud or misrepresentation.
A permit issued under the Motor Vehicles (All India Permit for Tourist Transport Operators) Rules, 1993 or the All India Tourist Vehicles (Authorisation or Permit) Rules, 2021 will remain in force for the validity period of the permit as if they were issued under the Tourist Vehicles Rules.

[Source: All India Tourist Vehicles (Permit) Rules, 2023]

Highway contractors permitted to convert bank guarantees to insurance surety bonds

The MoRTH, vide circular dated May 31, 2023 has approved changes to the standard bidding documents for EPC, HAM and BOT (Toll) projects, including e-bank guarantee and surety bonds as forms of performance security, following changes to the General Financial Rules, 2017.

Further, MoRTH has declared that any instrument submitted by a highway contractor as a bid security and/or performance security may now be replaced by insurance surety bond. It is also clarified that physical bank guarantees can be accepted as bid security or performance security if e-bank guarantees cannot be furnished.

[Source: MoRTH Circular dated May 31, 2023]

NHAI aims to create 10,000 km of digital highways by end of FY 2024-25

National Highways Authority of India (“NHAI”) has announced that it aims to develop around 10,000 (ten thousand) km of optic fibre cables (“OFC”) infrastructure across the country by FY 2024-25. This project is proposed to be implemented by NHAI through its subsidiary National Highways Logistics Management Limited (NHLML). The proposal at the moment is to develop utility corridors along the highway stretches where the OFC can be laid down and established. It has been announced that approximately 1,367 (one thousand three hundred sixty seven) km on Delhi – Mumbai Expressway and 512 (five hundred twelve) km on Hyderabad – Bangalore corridor will act as the pilot routes for this initiative.

With the creation of digital highways, the Government of India hopes to implement telecom technologies like 5G & 6G in remote parts of India and fulfill the larger goal of digital transformation of the country. The government’s plan is to lease out the OFC network on a fixed price allotment mechanism on ‘Open for All’ basis. The finer details of the policy for allotment will be decided by the Department of Telecommunications and Telecom Regulatory Authority of India.

[Source: PIB]

NHAI issues its first Sustainability Report

NHAI, on June 5, 2023 announced its first ever sustainability report highlighting the green initiatives it has undertaken during the financial year 2021-22. Some of the initiatives which have been showcased in the report are as follows:

NHAI has been using recycled materials for national highway construction. Use of fly-ash and plastic waste in construction has increased over the last 3 (three) years. NHAI has encouraged the use of recycled asphalt (RAP) and recycled aggregates (RA) in highway construction.
Green House Gas (GHG) emissions from energy consumption, operations, transport and travel measured in Metric Tonnes CO2 equivalent /km constructed saw a decline of 9.7% in FY 2020-21 and 2% in FY 2021-22.
On the operations front, energy intensity in Giga Joules/km has reduced by 37% in FY 2020-21 and 27% in FY 2021-22.
Around 2.74 crore saplings were planted by NHAI till 2021-22 to offset direct emissions from the vehicles.
NHAI has partnered with different stakeholders such as State Rural Livelihood Mission (SRLM), Self Help Groups, CSR partners and NGOs to collaboratively organize plantation drives. In July 2022, NHAI organized a nationwide plantation drive and planted around 1,10,00,000 (one lakh ten thousand) plants in a single day through simultaneous plantations at 114 (one hundred fourteen) identified locations across the country.
It is expected that with the issuance of this report, new avenues for infrastructure financing known as ‘Green Finance’ can be availed of.
The full report can be accessed at the following link.

FASTag Payments Enabled at Entry Points of Tiger Reserve

Indian Highways Management Company Limited (IHMCL), a subsidiary company of NHAI for the dedicated purpose of carrying out electronic tolling has signed a memorandum of understanding with the Nagarjunasagar-Srisailam Tiger Reserve. The tiger reserve is located in the states of Andhra Pradesh and Telangana.

The initiative aims to provide FASTag based payment system at entry points of the tiger reserve and will extend the benefit of collection of Ecosystem Management Coordination (EMC) fee via FASTag at various entrance points of the reserve. It is hoped that by enabling the FASTag system at the entry points, long queues and delays can be avoided and tourists can be allowed to savor the natural beauty and wildlife of these areas without hassles.

[Source: PIB]

NHAI launches a knowledge sharing platform with a view to a collaborative approach

With a view to take a more collaborative approach in highways development, the NHAI has launched a ‘Knowledge Sharing’ platform which is hosted on its website. Experts and citizens who want to share knowledge and insights related to topics such as road design, construction, road safety, environment sustainability and related fields will be able to do so by making submissions on the portal.

The submissions from citizens and experts can be in the form of video clips, power point presentation and PDF files. The suggestions and information uploaded on this platform will be reviewed by NHAI officials and will be evaluated for implementation.

The knowledge sharing platform of NHAI can be accessed at the following link.

NHAI empowers Project Directors to rectify accident-prone spots

The NHAI, on June 16, 2023, issued guidelines delegating powers to the Project Directors of NHAI to suo moto undertake rectification of accident prone zones up to an amount of INR 10,00,000 (Indian Rupees ten lakhs) provided that these spots or zones have been identified by the State Police Chief or by the District Road Safety Committee.

Further the guidelines has empowered the concerned Regional Office to implement short-term measures, costing more than INR 10,00,000 (Indian Rupees ten lakh) and up to INR 25,00,000, (Indian Rupees twenty five lakh) to rectify accident prone spots.

[Source: PIB]

Implementation of Fire Alarm System in buses delayed

On January 27, 2022, MoRTH had extended the scope of AIS 135 on school buses and type III category buses for incorporating provision of fire protection in the passenger compartment of the buses. The timeline for implementation was January 27, 2023. However, on the basis of several representations and comments from various stakeholders, MoRTH on April 28, 2023, deferred the implementation of AIS 135 i.e., the fire alarm system, on school buses and type III category buses to October 1, 2023.

[Source: Notification dated April 28, 2023]

Conversion of fully built vehicles into adapted vehicles for Divyangjan

The MoRTH vide notification dated April 13, 2023, amended Rules 53A and 53B of the Central Motor Vehicles Rules, 1989 to allow for temporary registration of fully built vehicles to be converted or altered to adapted vehicles in order to allow Divyangjan persons to access such vehicles.

[Source: Notification dated April 13, 2023]

Draft notification for inclusion of provisions for BNCAP in the Motor Vehicles Act

The MoRTH vide a draft notification dated June 28, 2023, proposed a new Rule 126-E in the Central Motor Vehicles Rules, 1989 facilitating the implementation of the Bharat New Car Assessment Programme (“BNCAP”) on type Approved vehicles of category M1 from October 1, 2023. These would be vehicles used for the carriage of passengers, comprising not more than eight seats, in addition to driver’s seat.

BNCAP rating will provide consumers an indication of the level of protection offered to occupants by evaluating the vehicle in the areas of (a) Adult Occupant Protection (AOP) (b) Child Occupant Protection (COP) and (c) Safety Assist Technologies (SAT). The vehicle will be assigned a 1 (one) to 5 (five) star rating based on the scoring against various tests undertaken as per AIS 197.

Along with draft notification, MoRTH has also issued the Draft Procedure for Regulating Bharat New Car Assessment Programme and the Draft AIS 197.

[Source: Draft Notification dated June 28, 2023]

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