CCEA approves hybrid annuity model

The CCEA has given its approval for the hybrid annuity model to be considered as one of the modes for implementing highway projects. The main objective of the approval is to revive highway projects by making another mode of delivery available for implementation. An important feature of the hybrid annuity model for highway development is the rational approach adopted for risk allocation between the PPP partners – the government and the private partner. While the private partner will continue to bear the construction and maintenance risks as in build-operate-transfer (BOT) (toll) projects, it will only partly bear the financing risk. The developer is insulated from the revenue/traffic risk and inflation risk, which are not within its control.

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