More tranches of govt equity under HAM soon in highway projects

Under the new proposal, firms will give bank guarantees every year against anticipated govt payment for that year

The Union government may soon unveil a new set of norms for the hybrid-annuity model (HAM) contracts in order to promote fresh private investment in highways through this route.

HAM contracts are projects that are partially funded by the central government. The government pumps in 40 per cent equity in the projects and the remaining finances are arra­nged by the developer through a mix of debt and equity.

It is learnt that the funds that the government releases to companies under HAM would now be given in smaller tranches but at higher frequency. 

For instance, if a company was getting five equal instalments