In comparison to BOT and EPC models, the Hybrid Annuity Model seems to be more attractive for private investment in road transport sector. Examine.

Hint:
Hybrid Annuity Model is a mixture of mix of BOT (Built Operate Transfer) and EPC (Engineering, Procurement and Construction) model.
Under this Government would provide upfront of around 40% of the project cost and remaining 60% would be borne by the private player. Once the project is completed, the NHAI will collect toll and refund the private players in installments for 15-20 years. This implies that the toll collection job will be done by NHAI. Thus, we can see that, compared to the BOT Annuity / EPC projects, it would ease the cash flow pressure on the government and it gives government some comfort level to lend from the banks.

Question for UPSC Mains:
In comparison to BOT and EPC models, the Hybrid Annuity Model seems to be more attractive for private investment in road transport sector. Examine.

Published: February 4, 2016 | Modified:June 27, 2019

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