A moment for reflection

NTBCL Case Highlights Importance Of Legal Architecture That Keeps Pace With Infra Financing Needs

- Amit Kapoor Amitabh Kant

S India moves steadily toward its 2047 development goals, building resilient and modern infrastructure remains a critical foundation for inclusive economic growth. Given the sheer scale of investment required, this development hinges significantly on long-term financing outside of the public sector. Over the past two decades, public-private partnerships (PPPs) have emerged as a key instrument to mobilise such capital, enabling transformative projects across roads, airports, ports, and municipal infrastructure. A key ingredient supporting this momentum has been the legal and institutional consistency that underpins investor trust. This legal and institutional alignment has served to strengthen and reinforce the overall credibility of the PPP model.

In December 2024, the Supreme Court's judgment in Noida Toll Bridge Company Ltd v. Federation of NOIDA Residents Welfare Association brought fresh attention to the legal framework governing PPPs. The court held that where a private concessionaire builds infrastructure on land granted by a government agency, the developer is entitled to recover the cost of construction and a "reasonable return," understood with reference to prevailing bank interest rates at the time of signing contract. Beyond this point, toll collection or user fees must cease, irrespective of the original concession duration.