Q. Consider the following statements regarding “Hybrid Annuity Model (HAM)”:
1.It is a mix of Engineering-Procurement – Construction (EPC) Model and Build-Operate-Transfer – Annuity.
2.In this model the project cost is shared by the government and the private player in ratio of 50:50.
Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: A
Notes:

Explanation: Hybrid Annuity Model (HAM) is a mix of EPC and BOT – ANNUITY models.

  • In this model the project cost is shared by the government and the private player in ratio of 40:60, respectively.
  • The private player is responsible to construct and hand over the roads to the government which will collect toll (if wishes)—maintenance remaining the responsibility of the private player till the annuity period.
  • Private Player is paid a fixed sum of economic compensation (called ‘annuity’, similar to the BOT-ANNUITY model of past) by the government for a fixed tenure (normally 15 years, though it is flexible).
  • The private player which demands lowest annuity (in bidding) gets the contract.

Source: TMH Ramesh Singh