The company has bid for road projects worth Rs 9,000 crore, as it looks to selectively build a portfolio based on the hybrid annuity model, or HAM. This is in spite of most of the stakeholders, including the National Highway Authority of India, focusing more on projects on the EPC model. The third model, BOT (build, operate, transfer) has fallen out of favour, especially of banks who are said to have burnt their fingers.
Welspun Enterprises believes there is enough in HAM itself. They can become big on the HAM model. Following on the same principal, the company has bid for four HAM projects, amounting to Rs 9,000 crore. The company, which had completed the Delhi-Meerut Expressway last year, has six ongoing projects. Two of these projects will be closed this financial year. These are the Gagalheri-Saharanpur-Yamunanagar four-laning project, and the Chutmalpur-Ganeshpur & Roorkee-Chutmalpur-Gagalheri project.
Both the projects, like its first in Delhi-Meerut, will be completed before the deadline. In the HAM model, the government brings in 40 percent of the project cost. Apart from the contribution of the government, under the model, 80 percent of the land required for the project is provided by the administration on the appointed date, when the scheme comes into force.
At the same time, industry observers point out that the HAM model also faces its own issues. One-third of the road projects awarded under the model are stuck for want of mobilisation advance from the government. The advance is made only after the appointed date is reached.
Taking cognizance of putting all its bets on just one segment, Welspun Enterprises has diversified into the water segment. It has at present one ongoing project and has bid for one more, worth Rs 2,000 crore.