Maharashtra’s public works department (PWD) is planning to award about 10,000 km of projects under the hybrid annuity model (HAM) in the next three-four months. The state government, in its Budget this year, had proposed to spend Rs 3,500 crore on HAM projects. The total cost of building 10,000 km is estimated at Rs 30,000 crore. Ashish Singh, principal secretary, PWD, told FE that the detailed project reports (DPRs) are currently being made and the tenders, inviting requests for qualification (RFQ) from bidders, should all be out by the end of May.
Singh admitted that achieving financial closure for the projects would be a challenge. With bankers still somewhat wary of lending to the roads sector, just 17 of the 32 projects awarded by the National Highways Authority of India (NHAI) have managed to achieve financial closure.
According to sources, so far, State Bank of India has not funded a single HAM project, citing concerns over the minimal equity participation of promoters in the model. Moreover, several HAM projects have been awaiting approval from lenders for many months now; given that financial closure needs to be achieved within 150 days of the concession agreement being signed, some of these could get lapsed.
While some may be resurrected, around five projects, sources in the roads ministry say, have been cancelled.