Build-own-transfer to be priority for highway projects in FY27: Nitin Gadkari

Gadkari Prioritizes BOT Model for Highway Expansion

India's Union Minister for Road Transport and Highways, Nitin Gadkari, has declared that the Build-Own-Transfer (BOT) model will take center stage for highway projects starting in the financial year 2027. This shift comes as the government ramps up efforts to modernize the country's road network, addressing longstanding challenges in funding and execution. The BOT approach, where private companies build, operate, and eventually transfer highways back to the government, is seen as a way to attract private investment and speed up construction. With the national highways network already expanded to over 1.46 lakh kilometers in recent years, this priority aims to sustain momentum despite occasional slowdowns in project awards and on-ground progress.

The announcement aligns with broader infrastructure goals, emphasizing sustainable financing beyond traditional budgetary support. By involving private players in toll collection during the operation phase, the model promises better efficiency and revenue generation to fund further expansions. Gadkari's focus on BOT reflects lessons from past models like Toll-Operate-Transfer and Infrastructure Investment Trusts, which have been key to monetization targets.

Record Budget Boost for Roads and Highways

In the Union Budget for 2026-27, the Ministry of Road Transport and Highways received a historic allocation of ₹3.09 lakh crore, with capital expenditure alone at ₹2.94 lakh crore—a nearly 9% increase from the previous year. This massive infusion underscores the government's commitment to infrastructure as a driver of economic growth, supporting construction, logistics, and related sectors. Overall central capital expenditure is set at ₹12.2 lakh crore, highlighting a public investment push that could create jobs and improve connectivity across the nation.

To complement this funding, the ministry has outlined a ₹30,000 crore monetization plan for FY27, divided equally between Toll-Operate-Transfer bundles and InvITs. These strategies help recycle assets into new projects, ensuring continuous expansion. A new Infrastructure Risk Guarantee Fund was also proposed, offering partial credit guarantees to build lender confidence in large-scale initiatives, potentially drawing in more private capital.

"The Build-Own-Transfer model will be our priority for highway projects in FY27, as it leverages private sector expertise to accelerate development while ensuring long-term sustainability and efficient toll operations for the benefit of commuters nationwide," Nitin Gadkari stated.

Challenges and Future Outlook for Road Infrastructure

While the highway network has grown impressively, with four-lane and high-speed corridors now forming nearly one-third of the total length, execution remains a critical watchpoint. This fiscal year has witnessed slower construction paces and project awards falling short of targets, partly due to traffic bottlenecks and land acquisition hurdles. Recent incidents, like crumbling sections on the Dwarka Expressway, have highlighted maintenance issues, prompting calls for better quality control and repairs at concessionaires' expense.

Looking ahead, the sector is poised for a rebound, backed by the National Highways Authority of India's improved financial health and an ₹8.3 trillion project pipeline through FY28. Plans include AI-led traffic monitoring, stricter safety norms on high-fatality routes, and feasibility studies for corridors to ease urban congestion, such as in Delhi-Gurgaon. The pivot to BOT toll projects could counter margin pressures from competition, fostering a balanced ecosystem of public-private partnerships. Experts see this as vital for sustaining the cyclical upswing in road construction.

In summary, Nitin Gadkari's emphasis on BOT for FY27, coupled with record budgets and innovative financing, positions India's highways for robust growth. These steps address funding gaps, enhance execution, and promise safer, faster travel, ultimately fueling economic progress.