Hybrid annuity model projs to account for 45-50 pc of NHAI awards this fiscal: Icra

New Delhi, May 26 (PTI) Hybrid Annuity Model (HAM) projects accounted for more than 50 per cent of the National Highways Authority of India (NHAI) awards in the past two years and are estimated to make up for 45-50 per cent of its awards in the current financial year, ratings agency Icra said on Thursday.

Under the HAM model, the government provides 40 per cent of the project cost to the developer to start work while the remaining investments are made by the developer.

The Ministry of Road Transport and Highways (MoRTH) through a circular, dated May 23, 2022, changed the bid parameter for projects to BPC (Bid Project Cost) alone while doing away with the requirement for quoting of O&M (Operations and Maintenance) cost.

As per the ratings agency, it is a positive as the change in the bid parameter will work as a positive for the bidders, ensuring long-term commitment to the HAM projects.

Earlier, the bids were awarded on the basis of the lowest assessed bid price which shall be a summation of the Net Present Value (NPV) of BPC during the concession period and bid O&M cost during the operations period.

Icra said that HAM projects accounted for over 50 per cent of the NHAI awards in the past two years. The same is expected to account for 45-50 per cent of the awards in FY23.

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