According to the ratings agency ICRA, there is expected to be an increase in mergers and acquisitions (M&A) and refinancing activity in highway asset management (HAM) projects in the upcoming quarters. Approximately 105 HAM projects, with a total bid project cost of INR 1.22 lakh crore, are expected to become operational in the next two years, and around INR 0.90 lakh crore of debt associated with these projects could potentially be refinanced.

highway asset management (HAM)

Around 280 projects with a total bid project cost (BPC) of Rs. 3.21 lakh crore were awarded under HAM model till September 2022 since its introduction in January 2016. HAM accounted for around 40% of the total projects awards by the NHAI during FY2016 and H1 FY2023. Further, HAM is expected to account for around 45-50% of the NHAI awards in FY2023 and FY2024. Of the HAM projects awarded since January 2016, a total of 71 projects with cumulative BPC of Rs. 80,818 crore became operational during FY2019-H1FY2023. Of this, 23 projects with a cumulative BPC of Rs. 27,446 crore (34%) were sold to InvITs and PE players in the last two years.

highway asset management (HAM)

Vinay Kumar G, Vice President, Corporate Ratings, ICRA, said, “The valuation of HAM projects has sweetened in the recent quarters with hardening in interest rates as annuities in HAM assets are linked with RBI’s bank rate, which is on an upward trajectory. Once a HAM project becomes operational, the risk profile witnesses significant improvement upon completion and track record of 1-2 semi-annuities. The developers are looking at refinancing to reprice their debt or avail top-up loans for future equity commitments.”

highway asset management (HAM)

About 105 HAM projects with bid cost of Rs. 1.22 lakh crore are expected to become operational in the next two years; About Rs 0.90 lakh crore of debt linked with these projects could be refinanced.

HAM as a model has evolved over the years since its introduction in January 2016. The interest in annuities for HAM projects is sizeable, amounting to around 45 per cent of overall inflows during the concession period. With the average MCLR replacing the bank rate, there will be a natural hedge between the annuity inflows and interest costs, thereby reducing the interest rate risks to a large extent. Also, the payment milestones were increased from 5 to 10 to improve the cash conversion cycle for developers. Given that the developers are quoting abnormally low O&M bids, NHAI had changed the bid parameter to BPC alone while doing away with the quoting of O&M cost in May 2022. In lieu of this, the bidder would be paid a fixed percentage of BPC as O&M during the operations period.
CRISIL: Debt to rise for road developers amid strong revenue growth
Sizeable equity commitments in under-construction projects and rising working capital requirement will increase the debt burden of road developers, though revenue growth will also be high in the next two fiscals driven by strong awarding and execution

Read more ...

Indian Toll Roads to witness moderation in growth to high single digits in FY2024 after a stellar 17-20% growth in FY2023: ICRA
WPI for December 2022 is significantly lower at 5.0% against WPI of 14.27% in December 2021. ICRA Ratings expects the toll road projects growth to moderate to high single digit in FY2024 after a 17-20% growth witnessed in FY2023 with moderation in the

Read more ...

Road Over Umling-La Pass at 19,024 Feet
Construction of World’s Highest Motorable Road Chismule – Demchok In Eastern Ladakh Using Non-Frost Susceptible Sub-Base. Union Territory of Ladakh is located at approx 11,000 feet above Mean Sea Level (MSL). The area experiences extreme cold

Read more ...

BRO Uses Eco-Friendly Steel Slag For Road Construction
Steel slag, a by-product of steel making, is produced during the separation of the molten steel from impurities in steelmaking furnaces. This process generates slag as a molten liquid melt and is a complex solution of silicates and oxides that solidifies

Read more ...

Potholes to become history breakthrough by Zydex
Vadodara-based Zydex Industries has developed a new technology in road construction that enables roads to resist cracking under heavy traffic loads and cyclic weather variations. The speciality chemicals company has been at the forefront of R&D and implementation

Read more ...

Prestressed Precast Concrete Pavement (PPCP)TM
PPCP Technology can help build roads of good quality, which are highly durable, can be built quickly, and do not require extensive maintenance. The construction industry is primarily concerned with two issues: construction quality control and the speed

Read more ...

More Efficient Road with iROADS Asset Management
iROADS Asset Management System enables significant optimization of road maintenance costs while ensuring a well-maintained road network and road assets. India has the second largest road network in the world comprising national

Read more ...

Upgradation of PMGSY Road Using Full Depth Reclamation Process in the State of Nagaland
Rapid growth in industrial development and economy in last two decades has demanded upgradation of the existing road network in the country. Though there is a huge road network in the country, it is still inadequate to meet accessibility and mobility requirements

Read more ...

Erosion Control for Green Highway Construction
Namrata Bichewar, Regional Manager - Maharashtra, Gabion Technologies India Pvt Ltd, discusses the company’s contribution in constructing green highways using Bio-Engineering Erosion Control methods and solutions. The government plans to construct 26 green expressways

Read more ...

Stone Matrix Asphalt is enabling durable and maintenance-free roads in India
A Stone Matrix Asphalt (SMA) pavement laid at Parimal Underpass in Ahmedabad Municipal Corporation has completed 7 years. The underpass, which used to get submerged under almost 2m depth of water due to waterlogging in the monsoons every year

Read more ...

Effect of Climate Change on Flexible Pavements
Dr. Abhishek Mittal, Principal Scientist, CSIR-CRRI New Delhi, discusses the effects of changes in temperature due to climate change on pavements with respect to their material, design, construction, and maintenance. A long-term shift in temperature and weather

Read more ...

Latest Technologies and Mechanization for Sustainable Road Construction & Maintenance of Pavements
Massive road development work for huge road network of the country’s national assets is essential for overall development of the country. However, major road development projects consume a huge quantity of soil and crushed aggregates. The consumption of these materials

Read more ...

AEW’s Dr. Road: Doing Away with Potholes Instantly
Following the launch of AEW’s road repair machine ‘Dr. Road’ by Shri Nitin Gadkari, Minister for Road Transport & Highways, Shatish Panchal, Director, AEW Group, informs that the company is geared up to promote the machine to State PWDs and CPWDs

Read more ...

Paving-Grade Asphalt Binders
Evaluating the Quality of Asphalt Binders and Plant Produced Asphalt Mixes through Recovered Asphalt Testing and other Mix Properties, Amma Wakefield, MASc, PEng Canadian Regional Engineer Asphalt Institute, Paving-grade asphalt binders are specified based

Read more ...

India’s Road Construction Sector Needs an Ecosystem of Safety
The Global Road Construction & Safety Conference 2022 will be held on 30th November 2022, at Hotel Taj Palace, New Delhi, in collaboration with CSIR- CRRI, Bitumen India Forum (BIF), National Highways Builders Federation (NHBF)

Read more ...

Colored Asphalt: The Changing Face of Road Construction in India
The road construction industry in India is undergoing a paradigm shift: strong demand, higher investments, and the emergence of newer and more innovative technologies is giving a renewed focus on sustainable developments. These technologies include

Read more ...

Economization of Road Subgrade Material by Mechanical Stabilization
Subgrade makes the formation level of the road crust. The material specifications of subgrade material are therefore more demanding than the soil used in general fill or embankment. In some construction projects, it becomes difficult to get the required subgrade

Read more ...

Perpetual Pavement: Way Forward from Design to Quality Construction
Atasi Das, Assistant Vice President, G R Infraprojects, explains the concept of the Perpetual Pavement in India’s expressway constructions and its practical implementation with due consideration of layers, materials, and thicknesses

Read more ...

Performance of Curing Compounds in Development of Strengths in Concrete Mix to be Used in the Construction of Rigid Pavements
Dr. Rakesh Kumar, Senior Principal Scientist & Pankaj Goel, Senior Technical Officer, Rigid Pavements Division,CSIR-Central Road Research Institute (CRRI), New Delhi, give information on the Performance of Curing Compounds in Strengthening

Read more ...