A STUDY OF FINANCIAL RISKS AND ITS ANALYSIS IN BOT HIGHWAY PROJECTS

By: ABHIJEET PAWAR SUHAS LAHOTI PRATIK DESHPANDE ABSTRACT

This study provides an overview of the issues and challenges related to private toll road development by considering the experience worldwide and importantly Asian experience. It builds the platform to further the understanding of financial evaluation of highway project and is illustrated using the evaluation of Bandra-Warli Sea link. After reviewing the history of toll roads, the study examines the public policy and financing approaches used to develop private toll road concessions and to mobilise capital for their construction and operation. It analyzes the key aspects of private toll road development, including project economics, risk sharing between the public and private sectors, and financing structures and sources. The study also discusses the main public policy issues in toll road development, lacunas in feasibility analysis and briefly asses the future outlook for the private toll road industry. The study concludes that while private toll road development is likely to experience modest growth in the near future, public resistance to tolling, the time and cost of implementing concessions, and others factors will probably limit industry activity.