Definition of Concession Period

• A concession period is the time allotted to a private operator to manage a toll road.
  
• It includes the phases of construction, operation, and toll collection.
  
• The duration is pre-defined in the concession agreement.
  
• The period allows recovery of investment with an expected return.
  
• After the period ends, the asset may be handed over to the government.
  

Typical Duration in BOT Projects

• In Build-Operate-Transfer (BOT) models, concession periods usually range from 15 to 30 years.
  
• The exact duration depends on project cost and estimated traffic revenue.
  
• The private concessionaire collects tolls during this time.
  
• Toll collection stops once the term ends or investment is recovered.
  
• Extensions may be granted in case of force majeure or project delays.
  

Terms Under HAM and EPC Models

• Under the Hybrid Annuity Model (HAM), toll collection is managed by the government.
  
• The private entity is paid in fixed installments and does not retain toll rights.
  
• Engineering, Procurement, and Construction (EPC) projects also exclude toll collection.
  
• These models have shorter contract execution periods, typically 2 to 5 years.
  
• They focus on timely construction without a toll-based revenue model.
  

Regulatory Framework and Oversight

• Concession periods are defined by the National Highways Authority of India.
  
• The agreement terms are based on financial feasibility and traffic forecast.
  
• Legal provisions ensure transparency and performance benchmarks.
  
• Extensions or penalties are addressed through contract clauses.
  
• NHAI monitors execution and compliance during the concession duration.
  

Post-Concession Transition

• At the end of the concession, the road is returned to the government.
  
• Toll rights may be re-tendered or discontinued based on policy.
  
• In some cases, tolls may continue under government management.
  
• Infrastructure upgrades or new contracts may follow after the term.
  
• Asset maintenance obligations are specified in the transition phase.