Govt Eases Exit Rules for Hybrid Annuity Highway Projects

26 Sep 2026 CW Team

HAM is a major public-private partnership model under which the authority pays 40 per cent of a project’s cost upfront, while the balance is released through annuities with interest. The revised framework is intended to reduce litigation and prevent abrupt abandonment of projects by creating a structured transition process.

The substitution provision can be invoked in three situations. These include an uncured authority default, such as delays in providing land or clearances; the concessionaire’s failure to infuse equity or mobilise resources; and a request by the concessionaire to exit after the commercial operations date.

The revised MCA also introduces local content requirements aligned with regulations issued by the Department for Promotion of Industry and Internal Trade under the commerce ministry. It sets out a payment formula for delays attributable to the authority, including the National Highways Authority of India (NHAI). A prolongation cost will be calculated at 8 per cent of the value of incomplete work for the period of delay.

The framework is intended to replace discretionary assessments of delay-related damages with a clearer compensation mechanism. However, the government has retained its decision to avoid arbitration in HAM contracts, a position that has faced opposition from developers. The agreement also adds conditions for ownership changes, including the absence of termination or damages notices and lender approval. Although these requirements codify the approval process, sector participants remain concerned that NHAI approvals, which can take more than 10 months, could continue to create uncertainty and bureaucratic delays in ownership transactions.

The Ministry of Road Transport and Highways has revised the model concession agreement (MCA) for hybrid annuity model (HAM) highway projects, enabling concessionaires to exit stalled developments through a harmonious substitution mechanism. The provision allows the concessionaire to replace itself or its equity partners before formal termination for default. HAM is a major public-private partnership model under which the authority pays 40 per cent of a project’s cost upfront, while the balance is released through annuities with interest. The revised framework is intended to reduce litigation and prevent abrupt abandonment of projects by creating a structured transition process. The substitution provision can be invoked in three situations. These include an uncured authority default, such as delays in providing land or clearances; the concessionaire’s failure to infuse equity or mobilise resources; and a request by the concessionaire to exit after the commercial operations date. The revised MCA also introduces local content requirements aligned with regulations issued by the Department for Promotion of Industry and Internal Trade under the commerce ministry. It sets out a payment formula for delays attributable to the authority, including the National Highways Authority of India (NHAI). A prolongation cost will be calculated at 8 per cent of the value of incomplete work for the period of delay. The framework is intended to replace discretionary assessments of delay-related damages with a clearer compensation mechanism. However, the government has retained its decision to avoid arbitration in HAM contracts, a position that has faced opposition from developers. The agreement also adds conditions for ownership changes, including the absence of termination or damages notices and lender approval. Although these requirements codify the approval process, sector participants remain concerned that NHAI approvals, which can take more than 10 months, could continue to create uncertainty and bureaucratic delays in ownership transactions.

16 Bengal Roads Set for National Highway Upgrade

Six Jammu and Kashmir Tunnels Expected to Be Completed Next Year

ROADS & HIGHWAYS

26 Sep 2026

Six Jammu and Kashmir Tunnels Expected to Be Completed Next Year

Barrier-free Tolling System Expected by March 2027: Nitin Gadkari

ROADS & HIGHWAYS

17 Sep 2026

Barrier-free Tolling System Expected by March 2027: Nitin Gadkari

Government Asks NHAI to Recover Rs. 123 mn Compensation

ROADS & HIGHWAYS

26 Sep 2026

Government Asks NHAI to Recover Rs. 123 mn Compensation

Haryana Plans 107-Acre Land Acquisition for Gurugram Roads

ROADS & HIGHWAYS

26 Sep 2026

Haryana Plans 107-Acre Land Acquisition for Gurugram Roads

Gold Stories

ROADS & HIGHWAYS

01 Sep 2026

Risk is the Roadblock

ROADS & HIGHWAYS

01 Aug 2026

The Road Ahead Begins Here

ROADS & HIGHWAYS

01 Aug 2026

The Road to Excellence!

ROADS & HIGHWAYS

01 Sep 2026

Tunnel Risk Radar

ROADS & HIGHWAYS

01 Sep 2026

Risk is the Roadblock

Infrastructure Transport

26 Sep 2026

Mumbai-Ahmedabad Bullet Train’s Surat-Vapi Section Set for 2027

The first section of the Mumbai-Ahmedabad Bullet Train corridor, linking Surat and Vapi, is targeted to begin services in 2027. Construction is expected to be completed by December 2026, while Railway Minister Ashwini Vaishnaw has indicated that an inauguration could take place around the middle of 2027. The National High Speed Rail Corporation (NHSRCL) said the train being manufactured in India is expected to reach the tracks around April or May 2027. The train will undergo extensive testing before the section is opened for passenger services. The project began construction in 2021 and includ..

Infrastructure Transport

26 Sep 2026

Indian Railways Approves Four Projects Worth Rs. 7.36 bn Across Four States

Indian Railways has approved four projects with a combined value of Rs. 7.36 bn across Uttar Pradesh, Maharashtra, Andhra Pradesh and Gujarat. The programme covers train protection, signalling, electric traction supply and a road overbridge, with each project assigned to a different railway zone. In Uttar Pradesh, Rs. 2.52 bn has been approved to extend the Kavach 4.0 automatic train protection system across 607.7 km in the Lucknow Division of North Eastern Railway. The system monitors train movements and can apply the brakes if a driver fails to observe a signal or exceeds a safe speed. The w..

Infrastructure Urban

26 Sep 2026

Chandru Raheja Sells 1.49% Stake in Mindspace REIT for Rs. 5 bn

Billionaire Chandru Lachmandas Raheja has sold a 1.49 per cent holding in Mindspace Business Parks REIT for Rs. 5 bn through a bulk deal on the BSE. The transaction involved 9.9 mn units and was executed at an average price of Rs. 505 per unit, according to exchange data. Following the sale, units of Mindspace Business Parks REIT were trading 0.18 per cent lower at Rs. 504.05 on Tuesday. Exchange data did not identify the buyers involved in the transaction. Raheja is the chairman of real estate company K Raheja Corp. The sale involved 99,00,990 units, representing 1.49 per cent of the Mumbai-b..

Govt Eases Exit Rules for Hybrid Annuity Highway Projects

Related Stories

Gold Stories

Mumbai-Ahmedabad Bullet Train’s Surat-Vapi Section Set for 2027

Indian Railways Approves Four Projects Worth Rs. 7.36 bn Across Four States

Chandru Raheja Sells 1.49% Stake in Mindspace REIT for Rs. 5 bn

Related Articles

Latest Updates

Recommended for you

Advertisement

Subscribe to Our Newsletter

STAY CONNECTED

Advertisement

Modal Heading

First Name *

Last Name *

Industry *

Email Address *

Mobile Number *

Password *

Confirm Password *

Subscribe to our Newsletter

Email Address *

Password *

Please enter the details

Email Address

Modal Heading

First Name *

Last Name *

Industry *

Email Address *

Mobile Number *

Password *

Confirm Password *

Subscribe to our Newsletter

Email Address *

Password *

Please enter the details

Email Address