// Journal · Policy
New HAM concession agreement lets stuck highway projects change hands
MoRTH's revised model concession agreement for hybrid annuity projects adds a 'harmonious substitution' clause, a fixed delay compensation of 8% and local content rules.
The Ministry of Road Transport and Highways has revised the model concession agreement (MCA) for projects built under the Hybrid Annuity Model (HAM). The headline change is a harmonious substitution clause: a concessionaire can now replace itself, or its equity partners, before the project reaches formal default and termination.
When the exit clause applies
The substitution route opens in three situations:
- the authority has defaulted and not cured it, delaying the project;
- the concessionaire has failed to infuse equity or mobilise resources;
- the concessionaire asks to exit after the commercial operations date.
What else changes
- Delay compensation is standardised at 8% of the value of incomplete work.
- Local content requirements now follow the commerce ministry's procurement rules.
- Changes in ownership face tighter approval conditions.
Under HAM the government pays 40% of the project cost during construction; the rest is paid to the concessionaire as annuities with interest over the concession period.
How the industry reads it
The Highways Investor Association welcomed clearer rules on delays, risk and project continuity as a boost to investor confidence. Concerns remain: the government has kept its stance against arbitration in HAM contracts, and some experts fear the new ownership-change conditions could lengthen approval timelines that already run to around ten months.
Source: Business Standard, 22–23 September 2026.
