The Model Concession Agreement (MCA) is a standardized legal contract that forms the core of the Public-Private Partnership (PPP) framework for infrastructure projects in India. It is a concept and a document, not an Act or a scheme. The MCA was first developed by the Planning Commission in 2000 for the highways sector. Its creation was intended to solve the problem of inconsistent and varied concession agreements used by different government authorities, thereby ensuring uniformity, transparency, and quality in the development of large-scale infrastructure.
The MCA works by spelling out the policy and regulatory framework, primarily focusing on the mitigation and allocation of risks and returns between the government authority and the private entity, known as the concessionaire. A key mechanism is that the government authority retains ownership of the project asset, while the concessionaire is granted constructive possession and operating rights for a limited period. The MCA is central to various PPP models, including Build, Operate and Transfer (BOT) and Tolling, Operation, Maintenance and Transfer (TOT), and is used across sectors like National Highways, Ports, and Urban Rail Transit Systems.
The MCA has been subject to recent amendments, particularly by the Ministry of Road Transport and Highways (MoRTH) for highway projects. In August 2026, MoRTH revised the MCA for BOT projects to attract private investment. Key amendments include the introduction of a buyback option and a mechanism for traffic-risk sharing. This risk-sharing involves adjusting the concession period: it is extended if traffic underperforms and reduced if traffic significantly outperforms the expected level. Earlier, in 2024, the MCA for the TOT model was amended to modify the remaining concession period if the Actual Fee varied from the Target Fee by more than 5%, a significant change from the previous thresholds of 20% or 30%.