HYBRID ANNUITY MODEL
A. MORTH is promoting innovative project implementation models like the Hybrid Annuity Model to encourage investments in highway sector. B. This model has been adopted for implementation of highway projects in order to maximize the quantum of kms implemented within the available financial resources of the government. C. Bid parameter is life cycle cost i.e. (NPV of the quoted bid project cost + NPV of the O&M cost for the entire O&M period). D. Concessionaire receives 40 per cent of project cost from authority during construction period as construction support, thereby reducing his exposure and risk. E. Concessionaire is responsible
for designing, building, financing (60 per cent of the project cost), operating and transferring the project at end of operations period (15 years). F. Amount financed by concessionaire during construction period is to be recovered from authority through annuity payments along with interest payments (@ bank rate + x%) on reducing balance method. G. O&M responsibilities are with the concessionaire with separate provisions for O&M payments. H. Provision exists for inflation
adjusted project cost overtime.