The National Highways Authority of India (‘NHAI’) had issued a policy Circular dated December 10, 2021 (‘December 10 Circular’) which required that at the time of divestment by promoters of their entire shareholding in road concessionaires, a supplementary agreement be executed with the NHAI wherein an undertaking will be provided by the concessionaire that the outgoing promoters will have no residual rights over the accrued claims between the NHAI and the concessionaire, and those claims would rest with the incoming promoter.

Recently, the NHAI has issued another policy Circular dated February 13, 2023 (‘February 13 Circular’), whereby it reaffirms the requirements of the December 10 Circular, and a draft model supplementary agreement has also been issued (‘Model Supplementary Agreement’), which includes, inter alia:

i.    A confirmation from the concessionaire that the transaction does not require transfer of beneficial ownership, directly or indirectly, to any entity / person which / who is situated in or is a citizen of such country which shares a land border with India (Note: no threshold of beneficial interest has been prescribed);

ii.   An undertaking from the concessionaire that it will not engage any contractor which / who is situated in or is a citizen of such country which shares a land border with India; and

iii.  The outstanding issues of the road project (such as, maintenance issues) will be taken up by the new promoters.