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Govt’s hybrid annuity model paves way for road projects

News:

  • In India, road projects are awarded via one of the three models: Build-Operate-Transfer (BOT)-Annuity, BOT-Toll, and engineering, procurement and construction (EPC).
  • The National Highways Authority of India (NHAI) is all set to debut the Hybrid Annuity Model (HAM) for award of highway projects by November this year.
  • The HAMis a mix of engineering, procurement and construction (EPC) and build-operate-transfer (BOT) formats, with the government and the private companies sharing the total project cost in the ratio of 40:60 respectively.
  • This new model will reduce financial burden on the concessionaire during project implementation phase. Compared to EPC projects, the shift to HAM would also ease cash flow pressure on the NHAI.

Source: BS

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