Venture value is now the one parameter for awarding HAM freeway initiatives

The Street Transport Ministry has made important adjustments to the bid standards for awarding initiatives underneath the Hybrid Annuity Mannequin (HAM). Underneath the brand new clauses, the bottom bid undertaking value would be the solely standards for analysis of bids. It is a deviation from the sooner HAM bids the place operation and upkeep (O&M) prices have been additionally a bid parameter.

Based on sector watchers, the transfer happened since bidders have been quoting very low O&M prices to bag initiatives, elevating suspicions on whether or not they can be occupied with taking care of the initiatives for the long term. Final week, the Street Transport Ministry directed freeway builders to furnish a further efficiency safety in an try to rein in errant bidders that bid abnormally low. The choice taken on Monday is to be seen in the same gentle.

Underneath the brand new HAM, O&M prices might be a set share of the profitable bid quantity and might be paid by the authority calling the bids.

For versatile perpetual pavement together with buildings for versatile perpetual pavement together with

buildings, no O&M value might be payable to the concessionaire within the first yr whereas 0.40% of the Bid Venture Value might be paid every for the second, third and fourth yr. The authority can pay 0.60% of the Bid Venture Value every for the next years until laying the renewal layer or finish of concession interval, whichever is earlier. Comparable fastened percentages have been constituted for inflexible pavement with 10 years Upkeep Interval and for stand-alone Bridge or Tunnel works.

“With the intention to e book earnings upfront together with the growing competitors has resulted in among the builders resorting to quoting abysmally low O&M bids,” mentioned Rajeshwar Burla, group head, company scores at


There have additionally been cases of unfavourable O&M bids from few builders which have been out rightly rejected by the Nationwide Freeway Authority of India (NHAI) prior to now.

Based on Burla, O&M is a important facet in HAM initiatives as the long run annuities depend upon correct maintenance of the street. O&M failure is a critical threat for lenders and NHAI.

“The pores and skin within the recreation for the builders additionally will get addressed for them to remain dedicated to those initiatives for longer tenure,” he mentioned.

In one other order, the Transport Ministry allowed a change of possession in Construct-Personal-Function (BOT) Toll initiatives one yr after business operation date. Underneath earlier laws, concessionaries have been presupposed to function BOT Toll freeway initiatives for at the least two years earlier than a change of possession was permitted.
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