NHAI to continue awarding road projects in Q2 FY22 under HAM

19 Nov 2021 CW Team

The National Highways Authority of India (NHAI) will continue to award road projects in FY22, with the Hybrid Annuity Model (HAM) expected to account for half of the projects.

According to the credit rating agency, CRISIL, the mid-sized regional players will get hold of these HAM awards.

In total, around 4,500-5,000 km of road is expected to be awarded, from which 45-55% should be under the HAM mode. Another 40-45% would be under the engineering, procurement and construction (EPC) model, and less than 5% would be under the build-operate-transfer (BOT) model.

During the last fiscal year, HAM accounted for 54% of the awards. Around 51% of the 1,900 km has been awarded by NHAI under the HAM model in the first half (H1) of FY22. The authority awarded 22 HAM projects of 730 km during the September quarter.

As per the report, mid-sized regional players grabbed 58% of the HAM awards during H1 FY22, which is 33% higher than FY21.

Interest in the HAM model for road projects has increased after NHAI reduced the bidding eligibility criteria for the projects and made changes in the model concession agreement to encourage the private participation of players.

The reduced bidding eligibility criteria has made way for mid-sized players to enter the space.

Under the HAM mode, the government will provide 40% of the project's cost to the developer to initiate the work, while the remaining cost will have to be made by the developer.

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Also read: India to add 1 lakh km road network for national highway expansion

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