Why in news?
Development and maintenance of National Highways (NHs) is a continuous process. NH projects are identified annually as per available budgetary outlay, inter se priority, requirement of connectivity and traffic density. Government has fixed a target of 11000 Km for construction in the country for the current fiscal year.
Salient features of the models being adopted for construction of National Highways:
- Public Funded Projects: In such types of model, 100% funding is provided by Government. Different types of Public Funded Models are as under:
(i) Item Rate:
- Detailed design, specifications & estimates are provided by the employer and contractor is paid for the quantities executed as per item wise rates quoted in the Bid.
- Cost/Risk of any variation in quantity is borne by the employer.
(ii) Engineering, Procurement and Construction (EPC):
- In such types of models, full freedom to plan, design and construction is given to the contractor and core requirements of design, construction, operation and maintenance are specified in schedules.
- Scope for adopting best practices and innovation to optimize the efficiency and economy is available in such types of model.
- Payments are linked to specified stages of construction.
- The Contract Price is subject to adjustment on account of variation in the cost and change in scope ordered by employer.
2. Public Private Partnership Projects (PPP):
(i) BOT (Toll):
- Private developers/ operators, who invest in toll-able highway projects, are entitled to collect and retain toll revenue for the tenure of the project concession period.
- Responsibility for design and development of the project is vested with the Concessionaire under this mode.
- He is also responsible for Operation and Maintenance (O&M) of the project for the entire concession period after it is developed and put to commercial operation.
- The tolls are prescribed by the authority on per vehicle per km basis for different types of vehicles.
(ii) BOT (Annuity):
- As in case of BOT (Toll) Projects, responsibility for design, development and O&M of the Project Section for the entire Concession Period is vested with the Concessionaire for the Project.
- Concessionaire is given Annuity Payments during the O&M period as per provisions of the Concession Agreement.
- Tolling rights during O&M period vest with the employer after declaration of Commercial Operation of the developed section.
(iii) Hybrid Annuity Model (HAM):
- Under this model, 40% of the Project Cost is paid by the Government/ Executing Agency as Construction Support/ Grant to the private developer and the balance 60% is to be arranged by the successful bidder during the construction period.
- The Concessionaire is paid back the amount of 60% along with interest and Operation & Maintenance (O&M) payment in the form of annuities during operation period.
- While the concessionaire is responsible for the Operation & Maintenance during the concession period. The traffic risk is taken by the project Executing Agency/ Employer.
- Tolling rights during the O&M period are vested with the employer after declaration of commercial operation of the developed section.