Lease period for road projects under TOT may be cut to 20 years

New Delhi: The government is planning to reduce the lease period for projects awarded under the toll-operate-transfer (TOT) model to 15-20 years from 30 years since banks are reluctant to lend for the long-term, a senior government official told ET.

“Many of the investors seek bank funding. And banks are not comfortable to lend for 30 years. I believe they have some regulatory issues. They want the tenure to reduce further,” said the official, who did not wish to be identified.

The change will require a go-ahead from the Union cabinet. “We have initiated the process for cabinet approval,” said the official.