Contractors push back against Telangana’s road development plan under HAM

Contractors in Telangana have raised strong objections to the State government’s Hybrid Annuity Model (HAM) for road infrastructure development. They argue that HAM should be limited to new road construction, while repairs and maintenance should remain under traditional models to protect small contractors and businesses.

Hyderabad: Contractors have raised multiple objections to the State government’s plan to develop road infrastructure under the Hybrid Annuity Model (HAM), urging reconsideration of the proposal to safeguard small contractors and existing businesses.

The Roads and Buildings (R&B) department on Tuesday held a roadshow on the HAM project and sought feedback from contractors. Deputy Chief Minister Mallu Bhatti Vikramarka and Panchayat Raj Minister D Anasuya were present.

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Contractors pressed for the HAM scheme to be restricted to new road development, while repairs and maintenance should continue under the conventional system. They warned that entrusting repair and maintenance works to large agencies under HAM would force many small contractors to shut down operations, particularly the 120 batch mix plants in the State, each employing about 200 workers directly and indirectly.

They also demanded that the State guarantee loans raised for HAM projects and ensure timely installment payments to banks, so contractors are not penalised for delays.

In the first phase, the R&B department plans to take up 17 packages covering 5,190 km at a cost of Rs.6,478.33 crore, while the Panchayat Raj Engineering Department will execute 7,947 km in 17 packages at a cost of about Rs.6,000 crore. Another 6,810 km will be tendered by December.

R&B Minister Komatireddy Venkat Reddy said HAM blends the strengths of EPC and BOT models, with the government funding 40 per cent of the cost in ten instalments and contractors investing the rest, to be repaid based on performance with inflation-linked adjustments.

However, contractors countered that past roadworks showed long-lasting quality under the existing model. A 2015 survey had identified damaged roads, leading to repairs and laying of 8,000 km under R&B and 6,000 km under Panchayat Raj, completed by 2017 with Rs.3,000 crore for the R&B works.

“The government can check these roads, apart from 10 per cent damage, they remain in good condition. If HAM packages cover 300–400 km each, only large corporate agencies will benefit, leaving small contractors jobless,” one contractor said.

They also urged the government to prioritise new road laying rather than re-carpeting, likening the latter to “painting an old building”. They said they had sought a meeting with Chief Minister A Revanth Reddy to raise these issues but were unable to secure an appointment.