New Delhi: All the current road projects in the country are expected to get extension in construction spans for the lockdown period under force majeure political event, according to ICRA.
There are 181 road projects covering a total of 13,670 kilometer with a total project cost of Rs 2.20 lakh crore that have been awarded under public private partnership (PPP) model.
“BOT (build, operate and transfer) projects are well protected from both time and cost overruns on account of lockdown. As it is for HAM (hybrid annuity mode) projects, the bid project cost is adjusted for inflation (price index multiple),” said Shubham Jain, Senior Vice President, Corporate Ratings, ICRA.
In the operations period for a HAM project, the recovery from authority is in the form of fixed annuity payments along with interest on balance accumulated annuity payments and added overall, such interest receipts accounts for around 45 percent of total inflows.
Thus, the current low interest rate regime is going to be a challenge for operational BOT-HAM projects. As many as 7 HAM projects have attained provisional completion certificate. Another 2 HAM projects are in the process of attaining provisional completion certificate.
About 23 road projects covering a total of 1,493 kilometers are likely to become operational in the coming one year.