NHAI plans ₹1.5 tn award for 6,000 km

livemint.com:

₹1.5 trillion investment in the current fiscal under the hybrid and EPC route, with the share likely to be 65% and 35% respectively. With investor interest in building greenfield highway projects continuing to remain low, the National Highway Authority of India is unlikely to award projects on build operate transfer (BoT) mode in FY24 and continue to rely on tested HAM and EPC models, two persons aware of the development said.

Under both hybrid annuity model (HAM) and engineering procurement and construction (EPC) model, the risk of construction for developers is limited as contractors are paid regularly by government agencies in regular annuities as per the work undertaken. Only in HAM is such payment restricted to 40% of the project cost while the remaining 60% has to be mobilized by the road developer.

But under the BoT model, private sector developers take the entire risk of constructing, operating, and maintaining the roads for a specific period and recover their investment through toll collection. The EPC and HAM models were evolved to revive investment in infrastructure through government support.

“BoT projects still look unlikely as investors are wary about making long- term commitments on projects where flow is only after four-five-year period while uncertainty remains on traffic movement and quantum of toll collections. Also, with several state elections and general election this year and the next, it is a wait-and-watch game for investors before long-term private funds start flowing into the sector," said one of the two persons quoted above.

Questions sent to the ministry of road transport and highways and NHAI remained unanswered. NHAI, which is one of the largest road developers in the country had earlier