Crisil lowers execution forecast for NHAI projects for FY19

Ratings agency Crisil Thursday said it has lowered its execution forecast for NHAI projects for the ongoing fiscal to 3,6003,800 km from the earlier anticipated 4,300 km.

"We estimate around 800 km of execution is at risk this fiscal because many hybrid annuity model (HAM) projects are still awaiting appointed dates seven months after they were awarded," Crisil Research said in its latest report.

Under HAM, 40 per cent of the capital cost is paid during construction period and balance 60 per cent is paid as quarterly annuity over a period of 15 years.

"Construction of at least 800 km highways could be at risk this fiscal, which can clip the average to 9.9-10.4 km/day," the report said.

Crisil Research analysed 40 HAM projects amounting to 1,913 km awarded by the National Highways Authority of India (NHAI) in FY18. In all, 3,400 km of HAM projects were awarded last fiscal.

"Our analysis indicates many have achieved financial closure, but most of them are still awaiting appointed dates on account of delays in land acquisition or regulatory clearances," it said.