MUMBAI: Cutting its forecast for highways construction by 800 km to 3,600-3,800 km from 4,300 km this fiscal, CRISIL Research said these projects awarded under hybrid annuity model (HAM) are awaiting appointed dates seven months after they were awarded by the National Highways Authority of India (NHAI).CRISIL said it analysed 40 HAM projects and found delays in land acquisition to regulatory clearances though they have achieved financial closure.
The rating agency said the projects under the engineering, procurement, construction (EPC) model are better than HAM.“In the build-operate-transfer (BOT) era, execution began even if the land acquired was less. But this became a key risk and led to a big decline in construction activity between fiscals 2012 and 2014. While execution could decelerate this fiscal, the cautious approach to HAM would benefit in the long term by reducing risks,” CRISIL said.
Recently, Union Transport Minister Nitin Gadkari said banks have been reluctant to lend, delaying infrastructure projects. CRISIL said some banks were under Prompt Corrective Action, which prohibits them from lending to risky segments includes under-construction road projects.