| Work Detail |
The National Highways Authority of India (NHAI) plans to award 6,000 km of highways with an outlay of over Rs 1.5 trillion investment in the current financial year (FY) under the hybrid and EPC modes, with a share likely to be 65 percent and 35 percent, respectively.
The NHAI is unlikely to award projects on build-operate-transfer (BoT) mode in FY24 , as it continues to rely on hybrid annuity model (HAM) and engineering, procurement and construction (EPC) models.
Under both hybrid annuity model (HAM) and engineering procurement and construction (EPC) models, contractors are paid by government agencies in regular annuities as per the work undertaken, which creates limited risk for developers. In HAM projects, such payment is restricted to 40 percent of the project cost, while the remaining 60 percent is required to be mobilized by the road developer.
However, under the BoT model, private sector developers are responsible for, and thus take the entire risk of constructing, operating, and maintaining the roads for a specific period, and then recover their investment through toll collection. |
