Team-BHP - Government likely to award 21 highway projects for Rs. 28,000 crore & 1,500 kms

The government is expecting to award Rs. 28,000 crore worth projects for over 1,500 km of highways under the Hybrid Annuity Model (HAM).

A senior ministry official told Economic Times that 21 projects will be awarded under this model in the current financial year. This number is likely to be doubled in next financial year. Already bids from the private sector for projects worth Rs. 5,500 crore under this new model have been received.

Under this model, the total project cost will be split between the government and the private companies in a 40:60 ratio. The land acquisition and clearances would be obtained by the government and handed over to the private contractors before the project commences. Also, toll will be collected by the National Highway Authority of India (NHAI) and an annual lump sum (+ profit) will be paid to the private partner.

Business Standard reports that three projects under this model have already been awarded - Meerut-Bulandshahr (61.19 km) and 2 sections of the Delhi-Meerut Expressway i.e. Nizamuddin-UP border (8.7 km) and Dasna-Hapur (22.27 km).

The government is taking steps to attract more and more private players to take up infrastructure development projects. Steps have been taken to streamline clearances. Also, making NHAI compensate private firms for delays (not attributable to them), have provided the latter with an option to sell off their projects after 2 years of work completion. To avoid delays, the road ministry has been authorized to approve projects if the civic construction cost of the project does not exceed Rs. 1,000 crore.