Of the 43 projects awarded by NHAI, 22 have achieved financial closure as banks appear to be warming up to road projects under the hybrid annuity model (HAM). Fifteen more projects are also expected to achieve financial closure soon. NHAI’s patterns show a considerable bias to this model as 54 per cent of the projects being awarded in FY17 have been under HAM.
According to a recent report, bankers however have remained cautious of new players in the market who do not have sufficient construction experience and only projects associated with reputed names have achieved closure. The most active bidder winning six projects is Sadbhav Engineering.
Nitin Gadkari has reportedly been quoted saying that earlier 18 projects were awaiting closure as banks exhibited low confidence in them but they are clearing the projects now. SBI however is wary of such projects. IIFCL, HDFC and Yes Bank on the other hand have financed several projects under HAM.
Of the total project cost, 40 per cent is provided as grant by NHAI; the concessionaire provides only about 9 per cent of the cost under HAM.