PPP-wary Gammon Infra treads HAM road

Gammon Infrastructure Projects Ltd (GIPL), which had been handling only Public-Private Partnership (PPP) projects, will now bid for projects under Hybrid Annuity Model (HAM) for the rest of the financial year.

In a bid to add at least two feathers to its cap, the company will bid in six HAM projects.

"Around 10 road projects under HAM are likely to come this fiscal. Out of this, we are planning to bid for around six projects. Eventually, we anticipate to bag at least 2 projects from the lot," said a source.

Under the recently introduced HAM – a combination of Engineering, Procurement, Construction and Build-Operate-Transfer models – the government will pay 40% of the project cost during the initial five years through annual payments (annuity) and private players will invest the rest. Despite a 60% contribution by the developer, the toll will be collected by the National Highway Authority of India (NHAI), and thus all the financial risk associated with the project will be borne by the government body.

The size and names of the road projects that the company is targeting this fiscal remained undisclosed.

GIPL has not won any order in the recent past. The company has been focusing on managing its finances and debts. As per the unaudited financial result for the quarter ended June 30, 2016, the net profit was Rs 5.88 crore as compared to Rs 5.98 crore the previous year's first quarter.

Since April 1, 2016, the stock price has varied between Rs 6.02 and Rs 3.89. It stood at Rs 5.06 per share and on September 30 it was at Rs 4.68.