LSI Financial Services report on road sector

Abhishek Law Updated - November 15, 2017 at 11:03 AM.

Kolkata-headquartered LSI Financial Services Pvt. Ltd, a financial services company, has zeroed in on the country’s road sector as having a high investment potential.

According to a report by the company, The Road Ahead 2012, scope exists in highway sector with only 23 per cent of the highways being 4-laned or 6-laned.

The country’s road network consist 4.24 million kms and is the second largest in the world after USA.

The report also states that amongst the PPP models the OMT (operate-maintain-transfer) model is the most common form in India where the developer maintains the highway for a certain fee amount from the Government for 9 years.

The other popular models include BOT (Built Operate and Transfer) where the developer builds, maintains and collects toll revenues.

Another option is the BOT (Annuity) model where the concessionaire receives semi-annual payment from the Authority for approx 25 years.

The third is through setting up of a special purpose vehicle (SPV) where the Government contributes 30% of the project cost as equity.

>abhishek.l@thehindu.co.in

Published on April 7, 2012 11:36