NHAI targets 6,000-km highways for this fiscal

NHAI is set to award 6,000-km highway projects in the current fiscal; the move would be the second-best target for the authority in terms of project awards. In 2017-18 it awarded 7,400 km highway projects. Majority of the projects would be awarded through the hybrid annuity model (HAM) model in 2019-20, in which the government would contribute 40% of the project cost. According to sources, though some banks are not forthcoming for funding projects under the HAM model, 105 among 124 projects awarded thus far under the route have achieved financial closure. The HAM model was created for incentivizing bankers by lowering overall project risk so that they could lend more to public-private partnership (PPP) projects. It includes favorable clauses such as guaranteed partial payment from NHAI even in case of default by the concessionaire and subsequent termination of agreement. The sources claimed that apart from land acquisition, the increased cost of land and the civil construction cost are hampering faster pace of road project awards.