Effect of Hybrid Annuity Model on Road Project
Mayur S. Ghayal1, Rohit R. Salgude2
1Mayur S. Ghayal, Construction Engineering and Management, MIT-WPU, Pune, India.
2Rohit R. Salgude, Department of civil Engineering, MIT college Pune, India.
Manuscript received on July 20, 2019. | Revised Manuscript received on August 10, 2019. | Manuscript published on August 30, 2019. | PP: 1525-1530 | Volume-8 Issue-6, August 2019. | Retrieval Number: F8149088619/2019©BEIESP | DOI: 10.35940/ijeat.F8149.088619
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: Indian road network is one of the largest road network in world and need huge funding for maintaining and construction of new project. And in India time and cost overrun on infrastructure project are very common. BOT was one of the most successful model from PPP type. But from last couple of years BOT model is lagging behind to achieve financial closure within budget. Most of the BOT project fails due to not generating minimum revenue. Government modifies the MCA (Model Concession Agreement) time to time to eliminate lacunas from existing model. Recent modification of PPP is HAM (Hybrid Annuity Model). Hence to overcome from this type of difficulty government of India introduce the new PPP model called Hybrid Annuity Model (HAM) in 2016. This model was introduce to reduce the financial burden from the contractor. HAM model is a contractual arrangement made by government to overcome the limitations from BOT model. The financial strategy of HAM model is different than BOT model. In HAM model 60% funding made by authority during construction phase and remaining 40% is on annuity basis. In this paper the strength and limitation of HAM model is found out and identified most influencing factor for success of HAM model by using Relatively Importance Index (RII) technique. And schematic representation of financial model of HAM is generated by using Model concession Agreement (MCA).
Keywords: Hybrid Annuity Model, Financial model, Relative Important Index, Influencing Factor.