Home Transport Infrastructure News Road & Highway News Malaysian developers keen to invest in India under Hybrid Annuity Model

    Malaysian developers keen to invest in India under Hybrid Annuity Model

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    Road sectorWitnessing the revival of foreign participation in Indian highway development projects, Malaysian contractors have expressed interest in developing the Delhi-Meerut Expressway (DME), the first project which has been identified by the government to be bid out on the its newly conceived hybrid annuity model (HAM). According to a senior official in the Ministry of Road, Transport & Highways (MoRTH), Malaysian investors have already purchased the bid documents for the project. The last date of submission of the bid is 15 September 2015. HAM model has been designed to give comfort to the private concessionaire to lend from banks. It will off-set risks associated with traffic. Bids for the Delhi-Meerut Expressway will be awarded in three packages — a 27.5 km stretch on NH-24 (from Nizamuddin Bridge to Dasna), the 49.346 km stretch of the Hapur Bypass and the third portion covering a 8.36 km stretch from Delhi to Uttar Pradesh border.

    The estimated cost of the project is Rs 663.60 crore. The 14-lane road on NH-24, from Nizamuddin Bridge to Dasna, is expected to ease massive congestion on the stretch. NHAI has invited both technical and financial bids simultaneously with the target to award the project by October. The government started efforts to woo Malaysian contractors, who have been among the earliest investors in the roads sector in India with a roadshow in Kuala Lumpur, earlier in April this year. Malaysian companies had substantially invested in the Golden Quadrilateral programme under Phase — I of the National Highways Development Project (NHDP).

    In the HAM model government takes all the risk including the traffic growth. Under this model, the government would provide 40 per cent of the project cost to the developer to start work. The remaining investment will have to be made by the contractor. The National Highways Authority of India (NHAI) will collect toll and refund the amount in installments over a period of 15-20 years, cutting down on upfront investment required to be made by the government. The new risk-sharing structure is expected to bring in more bidders from the private sector.

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