HAM paves ahead, but cracks appear, too
Real Estate

HAM paves ahead, but cracks appear, too

In the past three-and-a-half years, the hybrid annuity model (HAM) of road construction has grown substantially, but some warts are now showing up: Smaller developers are finding financial closure elusive, and over-aged projects awaiting appointed dates are facing termination risk. CRI...

In the past three-and-a-half years, the hybrid annuity model (HAM) of road construction has grown substantially, but some warts are now showing up: Smaller developers are finding financial closure elusive, and over-aged projects awaiting appointed dates are facing termination risk. CRISIL Research’s analysis of road projects under the National Highways Authority of India (NHAI) reveals HAM has expanded its network since its launch in February 2016. Over fiscals 2017 to 2019, HAM projects accounted for a quarter of the executed road projects and 45-50 per cent of the projects awarded. First the good news: A deep-dive project-by-project analysis by CRISIL Research reveals that of the 6,670 km HAM projects awarded by the NHAI during fiscals 2016 to 2019, a good 70-75 per cent have achieved financial closure, most of them by large developers with a turnover of over Rs 15 billion. Now the concern: Though the foundation has been laid, some cracks have surfaced on the HAM highway. The smaller developers, many of which have changed lanes from engineering, procurement and execution (EPC) projects to HAM for the first time, are struggling to secure funding after bidding aggressively, and banks tightening capital requirements. The upshot has been a deceleration in the pace of financial closures. Read the full report here

Next Story
Resources

World Cement Association's Comment on Linking UK and EU carbon markets

Fabien Charbonnel, Director at the World Cement Association (WCA) and Directeur Général, Cem’In’Eu comments, “I believe a unified carbon market reduces the risk of competitive distortion and encourages fairer competition across borders. Consistent carbon pricing mechanisms promote efficiency and provide clarity for businesses operating internationally. For UK-based cement producers, alignment could remove disadvantages when exporting to the EU if UK carbon prices exceed those in Europe. However, it is worth noting that EU producers exporting to the UK would similarly benefit from great..

Next Story
Resources

Combilift and CMETB Celebrate 10 Years of OEM Engineering Traineeship

This week saw a landmark celebration at Combilift’s global headquarters in Monaghan, marking the 10th anniversary of the highly successful OEM Engineering Traineeship—a collaborative initiative between Combilift and the Cavan and Monaghan Education and Training Board (CMETB). The event, which welcomed past graduates, current trainees and local educators, underscored the programme’s evolution from a local skills initiative to a cornerstone of regional industrial development.Launched in 2015, the OEM Engineering Traineeship was born from a shared vision to tackle the skills gap in engineer..

Next Story
Resources

Aerem and OMC Power to Fund Rs 2 Billion for Solar Rooftop Adoption

Aerem Solutions and OMC Power have entered into a strategic partnership to unlock Rs 2 billion in financing for rooftop solar solutions targeted at India’s Micro, Small, and Medium Enterprises (MSMEs) in Uttar Pradesh. The collaboration is designed to scale solar adoption among MSMEs by providing access to affordable finance, supporting India’s transition toward a low-carbon economy.Under this agreement, Aerem through its NBFC, will enable credit facilities of Rs 2 billion to OMC Power’s customers, enabling MSMEs to invest in energy-efficient solar systems with easy financing solutions. ..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?