Public-private partnership (PPP) projects in India — highways, airports, ports, power, urban infrastructure and social infrastructure — operate under concession agreements that grant the concessionaire the right to design, build, finance, operate and maintain the facility for a defined concession period. The Government of India\'s model concession agreements (MCAs) published by the Department of Economic Affairs provide the standard framework.
PPP concession agreements in India allocate risks across construction, operation, revenue, regulatory change and force majeure between the authority and the concessionaire, with the lenders holding step-in and substitution rights as security for their financing. The most frequent disputes involve: delay in achieving financial close or appointed date; land acquisition and right-of-way delays (authority risk under most MCAs); change-in-law claims; variation in scope; revenue shortfall and viability-gap disputes; concessionaire default and termination; and the exercise of lender step-in and substitution rights.
AMLEGALS advises concessionaires, authorities and lenders on PPP concession disputes — from claim preparation and negotiation through conciliation, arbitration and enforcement. The practice covers highway, airport, port, power and urban-infrastructure PPPs under the Government of India\'s model concession agreements and state-level PPP frameworks.
Reviewing and negotiating concession agreements, risk matrices and project agreements for PPP projects.
Advising on and preparing change-in-law claims for compensation or tariff adjustment under the concession agreement.
Advising on authority default, concessionaire default and termination consequences including termination payments.
Advising lenders on the exercise of step-in rights and substitution of the concessionaire.
Representing parties in arbitration of concession-agreement disputes.
Advising on disputes with sector regulators (NHAI, AAI, tariff commissions) affecting the concession.
A PPP concession agreement is a long-term contract between a public authority (the grantor) and a private entity (the concessionaire) under which the concessionaire is granted the right to design, build, finance, operate and maintain a public infrastructure facility for a defined concession period. The concessionaire recovers its investment through user charges (toll, tariff) or annuity payments from the authority, depending on the PPP model.
The main models include BOT (build-operate-transfer) with toll collection, BOT-Annuity (where the authority makes annuity payments), DBFOT (design-build-finance-operate-transfer), HAM (hybrid annuity model, used by NHAI, combining 40% government funding during construction with annuity payments during operation), and OMT (operate-maintain-transfer) for completed assets. Each model allocates construction, traffic and revenue risk differently.
The concession agreement typically provides for notice of default, a cure period, lender cure period (during which the lenders may step in and cure the default or substitute the concessionaire) and, if the default remains uncured, termination by the authority. On termination for concessionaire default, the termination payment is typically lower than for authority default or force-majeure termination.
Lender step-in rights are contractual rights granted to the project lenders under the concession agreement and the substitution agreement (tripartite agreement between the authority, concessionaire and lenders) that allow the lenders to take over the management and operation of the project or substitute a new concessionaire if the existing concessionaire defaults on its obligations.
Most model concession agreements provide for a dispute-resolution mechanism comprising: amicable settlement, followed by arbitration under the Arbitration and Conciliation Act 1996. Some MCAs provide for an initial reference to a dispute-resolution expert or board before arbitration.
No. No engagement is treated as accepted until conflicts, scope and terms are confirmed in writing.
Share the details for a confidential assessment.