Variable Bonds for HAM Projects

14 Aug 2020

Photo: For representational purpose 

Under the Hybrid Annuity Model (HAM) concession agreement, NHAI has agreed to pay interest on developers’ capital atthe bank rate plus 3 per cent. Developers’ capital includesequity and debt amount infused in a project by the developer. Under the HAM concession agreement, typically, 40 per cent of the project cost is financed by NHAI and 60 per cent by the developer. This was evolved in view of the financial crunch faced by developers and the reluctance of banks to fund the entire project cost. Banks have borne the brunt of non- performing assets (NPAs) owing to default by concessionaireson non-completion of projects because of right of way (RoW) and other contractual issues. Hence, banks have represented NHAI to partly fund pro

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