Find out what is HAM, one of the major successes for road ministry. Will Budget 2016-17 be wishful for it?

The Road ministry led by Nitin Gadkari achieved one of the major milestones in the current fiscal-getting nod for Hybrid Annuity Model (HAM).

In India where road projects are awarded on primarily three models, Build-Operate-Transfer (BOT)-Annuity, BOT-Toll, and Engineering, Procurement and Construction (EPC), the road ministry had vouched for a fourth model too.

Under HAM, which is a mix of EPC and BOT, the government wants to award projects worth at least Rs 60, 000 crore in 2016-17.

The model has been able to revive the interest of private players as the government and the private companies will have the total project cost in the ratio of 40:60 respectively.

The ministry has also sought Rs 85,000 crore allocation in Budget 2016-17 as around 40% of the total projects awarded next year will be on HAM with a total cost of Rs 28,000 crore.



The road ministry says there are many advantages of the model, including private players don’t have to bear traffic risk, reduced equity investments by developers, etc.

India has a long way to go to improve the road infrastructure. Gadkari says he wants to target highway construction of 30 kms per day within two years.