The government has banned all advertising along national highways in the model concession agreement for build-operate-transfer (BOT) projects. The move is likely to hit the Rs 850-crore outdoor advertising industry as well as the income of road operators.
Officials in the roads and highways department said the move was initiated as large hoardings often distracted drivers, resulting in accidents.
The Indian Roads Congress had also incorporated the clause in its charter. Also, the Supreme Court had banned advertising along roads in cities like Delhi.
The highway operators can, however, use toll plazas, rest areas, bus shelters and telephone booths for advertising purposes if the roads and highways department finds it non-distracting.
The new model concession agreement —which will dictate the terms and conditions for future road contracts — has also reduced the concession period for four-laning of highways from 15 years to 12 years.
An operator can continue to operate for 20 years, if it agrees to widen a highway to six lanes. According to the agreement, an operator can be exempted from the obligation of six-laning a highway if he informs the National Highway Authority of India within the first eight years of the contract period.
Also, an operator faces an even shorter concession period if toll revenues are higher than projections. For every per cent of actual traffic in excess of projections, the concession period will be reduced by 0.75 per cent.
The government has, however, provided relief to operators if traffic falls short of projections. For every per cent of shortfall, the concession period will be increased by 1.5 per cent.
The concession agreement addressed the issue of land acquisition, which has been a major grievance of the private players.
It said 80 per cent of land will be acquired by the NHAI before construction starts while the rest will be acquired over the next three months. If the NHAI fails to acquire the remaining land in the stipulated time, the operator will be compensated at a rate of Rs 50 a day for every 1,000 sqm of land.