Road development projects not favouring small developers

Road development projects, that are bagged through the Hybrid Annuity Model (HAM) route, are not favouring small road developers even as they seek to transition into a new business area.

In 2016, the Government came up with HAM. A the name suggests, HAM’s a hybrid — a mix of the EPC (engineering, procurement and construction) and BOT (build, operate, transfer) models. The logic was the developer puts in 60 per cent of the cost and the government (NHAI) funds 40 per cent, based on milestones achieved.

CRISIL pointed out that while large developers, with a turnover of over Rs 1,500 crore have had lesser problems in achieving financial closures (for projects), the story was different for small developers.