MEP and NHAI Sign ` 4,100 Cr. Concession Deals

Road developer and operator MEP Infrastructure announced that its four Special Purpose Vehicles have signed concession agreements worth ` 4,100 crore with the National Highways Authority of India. The concession period is fixed at 15 years (excluding the 2-year construction period). MEP Infrastructure will get bi-annual annuity from NHAI post the Commercial Operation Date, the company said in a regulatory filing. All four projects are in Maharashtra and will be executed on Hybrid Annuity Mode (HAM) model.
Under the HAM model, the government infuses 40% of equity into the project during the initial five years through annual payments (annuity), while the balance has to come from the developer. While HAM projects have seen a good amount of interest from the private players, banks have been somewhat reluctant to lend HAM projects initially. Even after two years, funding remains a challenge, say industry players.