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News: New Bidding Regulations for HAM Projects were introduced by the Ministry of Road Transport and Highways to prevent catastrophic failures from construction defects.
About Hybrid Annuity Mode (HAM)
- Hybrid Annuity Mode (HAM) is a Public-Private Partnership model used mainly for road and highway projects in India, where both government and private sector participate.
- It is a mix of the EPC (engineering, procurement and construction) and BOT (build, operate, transfer) models.
- It was introduced to revive private participation after challenges in earlier models like Build-Operate-Transfer (BOT).
- Financial Structure: It is a variant of the Public-Private Partnership model, where the government pay 40% of the project cost during construction and the balance 60% as annuity payments over the operations period.
- Risk Sharing: The government bears traffic risk, while the private developer handles construction and maintenance.
- Upon the completion of the concession period, ownership of the project reverts to the government.
About New Bidding Regulations for HAM Projects
- These regulations introduce stricter eligibility and disqualification norms for contractors in Hybrid Annuity Mode (HAM)-based highway projects.
- Introduced by: The regulations are introduced by the Ministry of Road Transport and Highways (MoRTH).
- Aim: It aims to strengthen construction quality, ensure structural integrity, and prevent catastrophic failures in national highway projects.
- Key Changes:
- Catastrophic Failure Clause: If a bidder was involved in serious construction failures such as collapse of bridge, flyover, embankment damage, pavement failure, construction deaths, or long tunnel entrapment within the last two years, then the bidder may face disqualification or a minus 30 mark penalty.
- Wider Applicability: This rule applies to both ongoing and completed highway projects, ensuring that past performance is considered during bidding.
- Expanded Coverage: Provisions earlier used for EPC (Engineering, Procurement, and Construction) projects are now extended to Hybrid Annuity Mode (HAM) contracts, with mandatory bidder declarations.
- Significance: It creates a preventive filter at the bidding stage to improve quality and reduce failures.
