Govt May Lead Highway Work as Private Investors Fight Shy

The Centre, through NHAI, may award 10% or less under BOT-toll route in the next fiscal

- Subhash Narayan

The road ministry may have lower highway awards under the build-operate-transfer (BOT)-toll model in 2025-26 and continue to rely on the tested hybrid annuity model (HAM) and engineering, procurement, construction (EPC) mode due to low investor interest in building greenfield highways, two persons close to the matter said.

Unlike the BOT-toll model, where the entire construction risk is borne by the private developer, HAM and EPC models have less construction risk for contractors as governments foot the bill for building highways.

In EPC contracts, contractors are paid monthly or quarterly annuities. In HAM deals, the government supports initial construction by providing 40% of the project cost, while the private sector later has to contribute 60% of the funds.