IRB infrastructure take on HAM model

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In order to facilitate present public private partnership model (PPP) in Infrastructure development Government of India has introduced Hybrid annuity model (HAM). Earlier, models like BOT (build, operate and transfer annuity model)and EPC (engineering, procurement and construction) are operational in the system. However, these two models have their own discrepancies and in order to increase private sector partnership in infrastructure development government has introduced this model. HAM is a combination of BOT and EPC model, where Government will pay the initial investment of 40% and then the rest of the cost is borne by the developers and they can raise the remaining 60% of funds through equity and loans. Here is IRB Infrastructure take on HAM Model.

IRB INFRASTRUCTURE OWNER

HAM has got mixed reviews from private sector developers. Some have already started bidding under the new model while some are still waiting for the final conclusions. IRB infrastructure developers is India’s one of the most leading roads and highway developers. They have successfully completed many projects of roads and highway tenders in partnership with government. Until now, they have set a great example for public private partnership and have completed many projects under BOT model. Government is expecting a good response from IRB developers on HAM bidding as well. However, IRB infrastructure is silently observing the results before taking further steps on the other side.

Virendra Mhaiskar Chairman and Managing Director of IRB is one of the most prominent personalities of developer’s community. He holds the opinion that competition is very intense in hybrid annuity model. According to Virendra Mhaiskar “completion is very high and whenever government comes up with multiple project, then we developers go to overkill and mess it up.” Mhaiskar has spent many years of his life in this sector and on the basis of his accumulated knowledge of past years he came up at this conclusion.

Last modified: December 13, 2016