New Delhi: To “revive” private sector participation in the road construction sector, government will now be laying special emphasis on hybrid annuity model (HAM) for constructing National Highways (NH).
Highway construction projects worth around Rs 10,000 crore have been approved in the current fiscal till 31st October under HAM. “The objective is to maximize the quantum of implemented projects within the available financial resources of the Government and to revive private sector participation in the sector,” said Minister for Road Transport and Highways Nitin Gadkari in a written reply in Lok Sabha.
Under HAM, 40 percent of the project cost is provided by the government in the construction stages and the rest of 60 percent as annuity payments spread over operations period of the highway along with interest to the concessionaire.
Collection of the toll charges from the highways constructed under HAM becomes the responsibility of the government.
Apart from reviving the interest of the private sector in highway construction activity, government is focusing on HAM to leverage the advantages of long term funds like insurance funds, pension funds and wealth funds.