Hybrid Annuity Model (HAM): A Game Changer in Road sector

Sandeep Upadhyay, MD & CEO - Centrum Infrastructure Advisory Ltd

Road sector continues to be a formidable force to revive the capital expenditure cycle in the badly battered Infrastructure sector. While much has been talked about the evolution of the sector the Model Concession Agreement has witnessed several revisions over a period of time. In the last couple of years a slew of policy reforms including positive iterations in the Concession Agreement addressing issues around handing over Right Of Way, rephrasing termination clause, allowing 100% exit, easing refinancing norms are certainly firm steps in the right direction however the investor sentiment still remains subdued. While these initiatives have led to revival in pace of execution of road projects it is imperative for the Government to customize the roll out plan with a fresh approach. In the current context of fluid macro environment with most of the Banks reeling under huge NPAs, I foresee most of the Capital expenditure (CAPEX) in the Road sector primarily shall be undertaken on the Government's balance sheet atleast for the next couple of years.

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