ET Intelligence Group: The recent tendering for securing orders from the National Highway Authority of India (NHAI) shows a clear trend that is building up among construction companies.
They have shown an increasing preference for non-highway, pure Engineering Procurement and Construction (EPC) orders instead of Hybrid Annuity Model (HAM) projects. The tendering amount for nonhighway projects such as building (housing), irrigation and water supply have recorded a 91 per cent jump, amounting to ?157,500 crore in the two months ending February this year, in comparison with the same period last year.
The key reason for this shift is the inability to secure financial closure for existing HAM projects. Banks have been extremely reluctant to fund HAM projects as a sizeable number of construction companies have been unable to provide bank guarantees.
