Government is looking for new Road Financing Models and Swiss Challenge System Explained.

What's the news?

Graphic Source: The Indian Express

• Ministry of Road, Transport & Highways (MoRTH) is looking at a proposal to allow projects to be bid out under the Swiss Challenge System. This system lets private investor conceptualise projects and prepare DPR (detailed project report). This is exciting as it will expedite the process of award and construction of highway development projects.

Graphic Source: The Indian Express

Experience of Swiss Challange system

• Not proved to be very successful elsewhere as the private entity is required to make a lot of initial investment under this model, which he may not be able to recover unless he wins the contract. 
• But still companies come as they can conceptualise projects of their own interest. 
• An infrastructure company, owning a port for instance, may want to develop the last-mile road to improve accessibility.”
• Go ahead has been already given to Bharat Mala project which is a massive project. For this government has been exploring different terms of engagement to lure in the private sector in investing in road infrastructure development projects.