Road infrastructure major PNC  Infratech  has bagged a Rs 1460 crore order from National Highway Authority of India (NHAI) for construction of around 80 km length of Sonauli-Gorakhpur section of NH-29E in Uttar Pradesh.

A memorandum of Undertaking (MoU) was signed on Thursday in this regard, the company has informed the regulators. The four-laned project will be implemented on a hybrid annuity model (HAM).

The company said the project will be constructed in two years after the assigned date is declared, and will be operated by it for a 15-year period. The road development sector represents nearly 61 percent of the company’s order book. The company has projects in Uttar Pradesh, Karnataka, and Rajasthan. 

An HAM program involves EPC and BOT models. While the EPC model requires National Highway Authority of India (NHAI), the apex highway development institution, to pay private players for project implementation and possession, leaving tolls and maintenance to the government, the BOT framework enables private players to build and operate and maintain the road for 10 or 15 years, before returning the asset to the government. All project funding must be raised by the private player even though it is approved by the agreement to collect toll fees or a fixed-annual annuity from the government.

The HAM-annuity model combines EPC (about 40 percent) and BOT-annuity (60 percent ) where NHAI releases 40 percent of project cost and is typically offered to private entities in five tranches. The private player would then raise the remaining 60 percent of the funding.