Transport Ministry to award 3 highway projects under hybrid annuity model soon

Under the model, the government and private companies will share the total project cost in the ratio of 40:60

The Ministry of Road, Transport and Highways has fast-tracked the award of three highway projects under the Hybrid Annuity Model (HAM) to the end of December 2015.

The three projects are the Meerut-Bulandshahr (61.19 km) stretch, package-I of the Delhi Meerut Expressway (49.40 km) — Nizamuddin-UP border(8.7 km) stretch — and package-III —  Dasna-Hapur section (22.27 km).

Two of the projects are part of the same stretch: the six-lane Delhi-Meerut Expressway, whose foundation stone is likely to be laid by Prime Minister Narendra Modi on December 31.

Four developers — Apco Infratech (P) Ltd, Ashoka Concessions Ltd, Sadbhav Infrastructure Projects Ltd and PNC Infratech Ltd — have bid for four-laning of the stretch connecting Meerut with Bulandshahr in western Uttar Pradesh, sources said. The total estimated project cost is Rs 683.24 crore.

For package-I, the Nizamuddin-UP border (8.7km) stretch, Ashoka Buildcon and Welspun Group have submitted their bids. The total civil cost for the project is Rs. 610 crore. 

For package-III, the Dasna-Hapur (22.27 km) stretch, Sadbhav Engineering, Apco Infratech (P) Ltd, PNC Infratech and Ashoka Buildcon have submitted their bids. The civil cost of the project was Rs. 940.5 crore. The bids for UP Border-Dasna (19.29 Km) stretch is also open and will close on December 30. 

Senior officials in the NHAI (National Highways Authority of India) said bids are being evaluated and hopefully by the end of this month it will be awarded to the developers. 

The hybrid annuity model is a mix of engineering, procurement and construction (EPC) and build-operate-transfer (BOT) formats, with the government and private companies sharing the total project cost in the ratio of 40:60, respectively. The necessary land acquisition and environment clearances would be handed over to the private contractor before the project is commenced. The toll levied on the infrastructure project would be collected by the government and a fixed annuity with a profit margin would be given to the private partner.

Experts are of the view that this model is likely to ease financial burden on the exchequer too, as it lowers their upfront contribution for the project compared to an EPC.  Currently, In India, road projects are awarded via one of the three models: build-operate-transfer (BOT)-annuity, BOT-toll, and engineering, procurement and construction (EPC).

The government is looking at awarding 1,300 kms of national highway projects under the new model in the current financial year for which detailed project reports (DPRs) have been prepared. For 2015-16, the NHAI has identified 19 road projects, entailing an investment of Rs 14,300 crore and spanning Delhi, Uttar Pradesh, Himachal Pradesh, Jharkhand and Maharashtra.