Summary
India's Hybrid Annuity Model (HAM) for highway construction ensures private companies are paid on a schedule regardless of traffic volume, with the government absorbing toll revenue risk. Introduced in 2016 to address failures in the Build-Operate-Transfer (BOT) model, HAM involves 40% government funding and semi-annual annuity payments to developers for the remaining 60%. While initially successful for older projects, CareEdge Ratings indicates a sharp deterioration in commissioning rates for projects awarded since 2020.
