Road Builders Face Order Challenges Amid Shift to BOT and HAM Models

17 Dec 2024 CW Team

India Ratings and Research reported that small and mid-sized road construction firms may struggle to secure new orders in the medium term due to a decline in government-issued engineering, procurement, and construction (EPC) contracts. The agency attributed this trend to the government's increased preference for build-operate-transfer (BOT) and hybrid annuity model (HAM) projects over traditional EPC contracts. The shift is expected to intensify competition in the EPC segment, favoring large players with strong financials. Smaller firms, often lacking the significant upfront capital required for BOT and HAM projects, may face barriers to participation, coupled with heightened execution and funding risks. BOT projects, in particular, pose additional challenges such as toll risks and slow financial closures. Although 80% of the required right of way is typically available in advance, delays in clearing remaining sites have caused discomfort among lenders. However, the BOT and HAM models also demand a long-term commitment from developers, often spanning 15 years, which fosters more stable business profiles compared to the EPC model. Some mid-sized EPC developers are gradually transitioning to HAM projects and have begun securing orders under this framework. "The government's pivot to BOT and HAM models will transform the sector's dynamics," noted Abhash Sharma, Senior Director and Group Head Ratings Mid Corporates at Ind-Ra. He emphasised that companies with strong credit profiles and long-term strategies are better positioned to endure, while others may need to act as EPC contractors for larger developers, facing increased competition and margin pressures. For mid-sized EPC firms, geographic and client concentration remains a key concern, with 40–60% or more of their revenue often tied to a few top clients, heightening customer-related risks. Additionally, these firms frequently grapple with stretched working capital cycles and heavy reliance on creditor-backed letters of comfort, particularly among lower-rated entities. As the government reverts to a refined BOT/HAM project model, India Ratings foresees a challenging future for small and mid-sized EPC players, as the focus shifts to construction quality and achieving financial closure before project initiation. (ET)

India Ratings and Research reported that small and mid-sized road construction firms may struggle to secure new orders in the medium term due to a decline in government-issued engineering, procurement, and construction (EPC) contracts. The agency attributed this trend to the government's increased preference for build-operate-transfer (BOT) and hybrid annuity model (HAM) projects over traditional EPC contracts. The shift is expected to intensify competition in the EPC segment, favoring large players with strong financials. Smaller firms, often lacking the significant upfront capital required for BOT and HAM projects, may face barriers to participation, coupled with heightened execution and funding risks. BOT projects, in particular, pose additional challenges such as toll risks and slow financial closures. Although 80% of the required right of way is typically available in advance, delays in clearing remaining sites have caused discomfort among lenders. However, the BOT and HAM models also demand a long-term commitment from developers, often spanning 15 years, which fosters more stable business profiles compared to the EPC model. Some mid-sized EPC developers are gradually transitioning to HAM projects and have begun securing orders under this framework. The government's pivot to BOT and HAM models will transform the sector's dynamics, noted Abhash Sharma, Senior Director and Group Head Ratings Mid Corporates at Ind-Ra. He emphasised that companies with strong credit profiles and long-term strategies are better positioned to endure, while others may need to act as EPC contractors for larger developers, facing increased competition and margin pressures. For mid-sized EPC firms, geographic and client concentration remains a key concern, with 40–60% or more of their revenue often tied to a few top clients, heightening customer-related risks. Additionally, these firms frequently grapple with stretched working capital cycles and heavy reliance on creditor-backed letters of comfort, particularly among lower-rated entities. As the government reverts to a refined BOT/HAM project model, India Ratings foresees a challenging future for small and mid-sized EPC players, as the focus shifts to construction quality and achieving financial closure before project initiation. (ET)

Infrastructure Urban

11 Mar 2026

India Expands Semiconductor Training To 500 Institutions

Under the Chips to Startups programme of the India Semiconductor Mission, the Union minister responsible for Railways, Information and Broadcasting, and Electronics and IT reported notable progress in talent development. He indicated that over the past four years substantial steps have been taken towards a 10-year target of training 85,000 engineers in semiconductor design. World-class EDA tools have been deployed in 315 academic institutions across the country to provide students with practical exposure to chip design. These EDA tools are supported by leading global firms and are accessible t..

Infrastructure Urban

11 Mar 2026

Delhi Institutions Support India Semiconductor Mission

The Government of India has prioritised talent development through training, upskilling and workforce development under the Chips to Startups initiative of the India Semiconductor Mission, with officials noting progress in four years towards a 10-year target of training 85,000 engineers in semiconductor design. Electronic design automation tools provided by Synopsys, Cadence, Siemens, Renesas, Ansys and AMD have been deployed in 315 academic institutions, enabling students to gain practical chip design experience. Chips have been fabricated and tested at the Semiconductor Laboratory, Mohali, a..

Infrastructure Urban

11 Mar 2026

NHA Announces Winners Of NHCX Hackathon At IIT Hyderabad

The National Health Authority (NHA) has concluded the NHCX Hackathon under the Ayushman Bharat Digital Mission (ABDM) to stimulate innovation around the National Health Claims Exchange (NHCX). The winning teams presented their solutions at the NHCX Innovation Meet held at IIT Hyderabad during a two-day event in March 2026 that also served as the hackathon grand finale. The hackathon itself ran from 22 to 28 February 2026 and aimed to accelerate paperless, transparent claims processing across India. The event was organised with a range of ecosystem partners, including the Insurance Regulatory a..