Funding challenges in HAM projects for roads

01 Mar 2019 CW Team

On the government’s part, there has been a conscious shift in strategy from traditional BOT model towards EPC and HAM.

That said, it is evident that NHAI would need to significantly improve visibility of raising funds on their balance sheet, failing which, there may be speculations about their limited financial bandwidth,” says Sandeep Upadhyay, Managing Director- Infrastructure Advisory, Centrum Capital. “One of the primary challenge today is funding these projects for the next 15 years; so lenders and other stakeholders have to take a call on NHAIs leveraging capabilities over the next 15-20 years. The second impediment is the reluctance of Banks to fund HAM projects given the greenfield risks associated with it. The third risk is associated with the ability of promoters to bring in their contribution of 12-15 per cent of the total capex as equity in HAM projects.” Apart from the these challenges being faced for long term financing, the EPC companies are facing a huge push back from the Banks on the issuance of non-fund based limits against new orders on account of huge NPA fallout with EPC firms due to their BGs being invoked on account of non performance.

Of the total 108 HAM projects awarded to date, 60-odd projects have been awarded in FY2018. “Of these, as on February 7, 2019, around 45 per cent projects are yet to complete financial closure (FC) including 20 per cent wherein documents are yet to be submitted,” confirms Vishal Kotecha, Associate Director, India Ratings and Research (Fitch Group). A delay in FC is evident, for which, Kotecha points to “the lack of participation of PSU banks.”

HAM was introduced following the failure of the BOT toll model owing to aggressive initial traffic estimates. As Vijay Agrawal, Executive Director, Equirus Capital, says, “HAM was introduced to alleviate toll estimation pressures, get wider market participation in the PPP model and reduce funding pressures on the authority.” Nonetheless, he avers that HAM is also singing a similar tune as the BOT toll model.

Awards in HAM assets have significantly dried up, the main reasons being delay in promised land acquisition by NHAI and large lead times in obtaining other regulatory clearances.

SHRIYAL SETHUMADHAVAN

Shift from Toll to HAM and back to EPC– Transition

On the government’s part, there has been a conscious shift in strategy from traditional BOT model towards EPC and HAM. That said, it is evident that NHAI would need to significantly improve visibility of raising funds on their balance sheet, failing which, there may be speculations about their limited financial bandwidth,” says Sandeep Upadhyay, Managing Director- Infrastructure Advisory, Centrum Capital. “One of the primary challenge today is funding these projects for the next 15 years; so lenders and other stakeholders have to take a call on NHAIs leveraging capabilities over the next 15-20 years. The second impediment is the reluctance of Banks to fund HAM projects given the greenfield risks associated with it. The third risk is associated with the ability of promoters to bring in their contribution of 12-15 per cent of the total capex as equity in HAM projects.” Apart from the these challenges being faced for long term financing, the EPC companies are facing a huge push back from the Banks on the issuance of non-fund based limits against new orders on account of huge NPA fallout with EPC firms due to their BGs being invoked on account of non performance.Of the total 108 HAM projects awarded to date, 60-odd projects have been awarded in FY2018. “Of these, as on February 7, 2019, around 45 per cent projects are yet to complete financial closure (FC) including 20 per cent wherein documents are yet to be submitted,” confirms Vishal Kotecha, Associate Director, India Ratings and Research (Fitch Group). A delay in FC is evident, for which, Kotecha points to “the lack of participation of PSU banks.” HAM was introduced following the failure of the BOT toll model owing to aggressive initial traffic estimates. As Vijay Agrawal, Executive Director, Equirus Capital, says, “HAM was introduced to alleviate toll estimation pressures, get wider market participation in the PPP model and reduce funding pressures on the authority.” Nonetheless, he avers that HAM is also singing a similar tune as the BOT toll model. Awards in HAM assets have significantly dried up, the main reasons being delay in promised land acquisition by NHAI and large lead times in obtaining other regulatory clearances. SHRIYAL SETHUMADHAVANShift from Toll to HAM and back to EPC– Transition

Infrastructure Urban

06 Apr 2026

InsideFPV Delivers ₹10 Crore Kamikaze Drone Order Under MoD’s EPR Route

InsideFPV, a Surat-based drone technology manufacturer, has successfully executed a ₹10 crore defence contract to supply indigenous kamikaze drones under the Ministry of Defence’s Emergency Procurement Route (EPR). The company completed the delivery of hundreds of FPV kamikaze drone platforms within a rapid two-month timeframe, highlighting its ability to meet urgent military procurement timelines.The supply orders were fulfilled under the emergency procurement mechanism, which is aimed at fast-tracking acquisitions for immediate operational needs. InsideFPV’s quick execution reflects it..

Infrastructure Energy

06 Apr 2026

Vedanta Resources Secures Fitch Upgrade to ‘BB-’, Best Rating Since 2015

Vedanta Resources Limited (VRL), a global player in metals, oil & gas, critical minerals, power and technology, has received a credit rating upgrade from Fitch Ratings, marking its strongest bond rating in over a decade.Fitch has raised Vedanta Resources’ Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘BB-’ from ‘B+’, while maintaining a Stable Outlook. The agency also upgraded VRL’s senior unsecured rating, along with the ratings of US dollar-denominated bonds issued by Vedanta Resources Finance II Plc and guaranteed by VRL, to ‘BB-’.The upgrade represents Vedan..

Real Estate

06 Apr 2026

NAREDCO NextGen NCR Chapter Launched

The NAREDCO NextGen NCR Chapter was recently launched at Excelerate 2026 in Mumbai, marking a key step towards integrating emerging real estate leaders from the National Capital Region with the national platform. The initiative aims to promote sustainable and responsible urban development through collaboration and knowledge exchange.The event brought together young developers, entrepreneurs, and professionals from across NCR, including Noida, Gurugram, Ghaziabad, Faridabad, Bhiwadi, and Meerut. Discussions focused on urban development, finance, sustainability, innovation, and policy, emphasisi..