 "NHAI to continue awarding road projects this fiscal, HAM dominates: Crisil")
The National Highways Authority of India's vigour in awarding road projects will continue in the current financial year, with the hybrid annuity model expected to account for half of the projects, according to a report released on Monday.
Credit rating agency Crisil said that mid-sized regional players will grab a large chunk of these Hybrid Annuity Model (HAM) awards.
A total of 4,500-5,000 kilometres is expected to be awarded, out of which 45-55 per cent should be under the HAM mode. Another 40- 45 per cent would be under the EPC (Engineering, Procurement, Construction) mode and less 5 per cent under the build operate-transfer (BOT)-toll mode, the report said.
HAM had accounted for 54 per cent of the awards in the last fiscal.
"As much as 51 per cent of the 1,900 kilometres awarded by the NHAI has been under HAM in the first half of this fiscal," the report said, adding that in September alone, the authority awarded 22 HAM projects spanning 730 kilometres.
Interestingly, mid-sized regional players grabbed a mighty 58 per cent of the HAM awards during the first half of this fiscal, higher than 33 per cent in the last financial year, the report said.
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The interest in HAM has surged after NHAI reduced the bid eligibility criteria for its projects and made changes in the model concession agreement to encourage private participation.
The reduction in bid-eligibility criteria has paved the path for mid-sized players to enter the space, it added.
Under the HAM model, the government provides 40 per cent of the project cost to the developer to start work while the remaining investment has to be made by the developer.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)