Hybrid Annuity Projects
We foresaw an exciting opportunity in the Hybrid Annuity space in 2016 and have already bagged 6 HAM projects totaling to Rs 3836.99 crores covering 1059.97 lane kilometers.
The Hybrid Annuity model (HAM)
National Highways Authority of India (NHAI) and Ministry of Road Transport and Highways (MORTH) began awarding projects under HAM model since November 2015. Under this model, 60% of the total project cost to be contributed by developer and balance 40% to be invested by the Government during construction period in five equal instalments linked to project milestones. The Government / NHAI will collect the toll under HAM model and pay the developer annuity payments over 15 years as 30 bi-annual annuity payments. The developer will also receive bi-annual O&M payments. Going forward, over 80% of the road projects are proposed to be awarded under EPC and Hybrid Annuity Model (HAM) routes .
(All project payments are inflation indexed.)Some of the key advantages of the Hybrid Annuity Model
- the traffic | tariff risk will be borne by the Authority and not by the developer and
- the equity investment for the developer is reduced.MEP’s successful in HAM space
In 2016, out of the 25 projects that were bided for in the HAM space, we participated in eight projects and won six (4 in Maharashtra and 2 in Gujarat) with an order book of Rs. 3836.99 cr and 1059.97 lane kms to be executed in the next 3 years.