Highway projects: Infrastructure panel wants HAM curtailed, favours BOT model; here’s why

The Hybrid Annuity Model (HAM) for highway projects that insulates private developers from virtually any commercial risks, is putting stress on the highly-leveraged balance sheet of the National Highways Authority of India (NHAI), and should therefore be ‘downplayed’, a government-appointed task force has opined.

Launched in 2016, HAM caught the fancy of developers – as it requires them to have very little skin in the game, sub-10% practically – and has been the sole channel for private investments in the sector in the FY17-FY20 period. The sustainability of the model has been questioned by lenders which have become increasingly averse to funding HAM projects.