In an attempt to speed up the construction work in the country's road and highway sector, the National Highways Authority of India (NHAI) has decided to award road projects worth Rs. 28,090cr under the hybrid annuity model (HAM) in the next couple of months of which Rs. 15,905cr projects are being awarded very shortly. Apart from this, it has already identified 15 road projects - at a total length of 1,105 km - and entailing an investment of Rs 12,185cr for the 2016-17 fiscal. In this connection, the nodal road building agency has formulated a model concession agreement (MCA) and has sent it to the ministry of road transport and highways for approval. As a matter of fact, the body is keen to award 576 km of national highway projects under the new model in the current financial year for which detailed project reports (DPRs) have already been prepared covering highway stretches in states like Delhi, Uttar Pradesh, Himachal Pradesh, Jharkhand and Maharashtra.
Elaborating further they said explaining that in view of the fact that the authority is executing the projects on the hybrid annuity model for the first time, it needs to have a model concession agreement document, which will be the basis for executing the agreement between the government and the concessionaire. Now, the MCA is ready and the authority has sent it to the ministry for approval. As for as this model is concerned, it is a mix of engineering, procurement and construction (EPC) and build-operate-transfer (BOT) formats, with the government and the private companies sharing the total project cost in the ratio of 40:60 respectively. The government also shoulders the responsibility of revenue collection wherein NHAI will collect toll and refund the amount in installments over a period of 10 years in 20 equated installments. The new model will reduce financial burden on the concessionaire during project implementation phase and that as compared to EPC projects, the shift to HAM would also ease cash flow pressure on the NHAI, said official sources.