MoRTH tightens HAM norms; 25% of developers may be barred from bidding

Crisil says revised financial and technical norms for HAM projects could restrict 25 per cent of current developers, with stricter net worth and execution track record criteria

The Ministry of Road Transport and Highways (MoRTH) has tightened financial and technical qualification norms for hybrid annuity model (HAM) projects, a move that could temporarily restrict one in four current developers from bidding, according to Crisil.

 

Crisil’s study of 74 developers, who together bagged 90 per cent of HAM projects between FY22 and FY25, found that stricter financial thresholds could limit participation. HAM is a mix of the engineering, procurement and construction (EPC) and build, operate, transfer (BOT) model projects.

 

The minimum available net worth requirement has been raised to 20 per cent of a project’s estimated cost, up from 15 per cent earlier. Importantly, available net worth will now be calculated after deducting 20 per cent of the balance value of ongoing public–private partnership (PPP) projects, ensuring developers take on projects aligned with their financial strength.

 

 

“Based on our assessment, the revised norms could keep around 25 per cent of developers who won projects in recent years out of fresh bidding, while another 15–17 per cent may only be able to add one project to their books,” said Anand Kulkarni, director, Crisil Ratings. He added that as existing projects progress, developers’ net worth will free up, enabling them to re-enter bidding in one to two years.

 

On the technical side, developers now need a stronger execution track record. They must have completed work equivalent to 35 per cent of the cost of one similar project or 25 per cent of two projects, up from the earlier 20 per cent. Parameters around project timelines and road length constructed have also been tightened.

 

MoRTH had earlier relaxed criteria in FY21, leading to a surge in bidders per project (from five to 15) but also aggressive pricing, with bid premiums turning into 10–15 per cent discounts by FY24–25. The latest revisions, announced on 10 July 2025, aim to curb such practices and ensure better quality and timely delivery of road projects.

 

Crisil expects the changes to bring more discipline, improve construction standards, and ensure a more balanced distribution of projects across players.