National Highway Authority of India (NHAI) is the apex body of the country for the development, maintenance and management of national highways and for matter connected therewith or incidental thereto. Due to slow down of investment in road infrastructure space due to financial constraints of industry players and problem related to land acquisitions, in-ordinate delay in receipt of the payments, NHAI has come up a new scheme for construction of road projects to provide impetus to the construction of roads. Under the new scheme, the NHAI would pay off the entire amount to the concessionaire (constructor) over the period of 15 years post construction of the road assets ie 40% amount would be paid during construction period (730 days) from the appointed date and the balance 60 % would be paid over a period of 15 years on a semi-annual basis with an interest of 3% over and above the bank rate.
Under HAM Model , EPC Margins remained same as normal construction work.
Reason for higher margins will be the Difference of interest income from NHAI and interest paid to Lenders for 60% of Annuity amount.
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