nd str and n rastr          t re   9.37
     private sector—primarily caused by the in-built            risk for the private players. Other than
     flaws in the PPP models together with regulatory           sharing the project cost the private
     reasons—although external reasons have been also           player was to build, maintain and
     there (slowdown in the country’s economy due to            operate the road projects without any
     recession among the western economies).                    responsibility of collecting toll on the
          Various volumes of the Economic Survey                traffic. The private players were offered a
     together with the Kelkar Committee on the PPP              fixed amount of money annually (called
     have discussed about the various flaws in the              ‘annuity’) as compensation—the party
     existing model of the PPP, primarily used for the          bidding for the minimum ‘annuity’ used
     development of road projects in the country. In            to get the project. Toll collection was the
     this backdrop, a better PPP model was announced            responsibility of the Government.
     by the Government by early 2016—the Hybrid                 This was different from the previous
     Annuity Model (HAM). A brief review of the                 model (BOT-TOLL) in one sense—
     major PPP models (few of them are non-PPP                  private players were not having any
     models, too) are given below:                              commercial risk (traffic)—but they
                                                                remained very much exposed to other
          (i) BOT-TOLL:          The    ‘Build-Operate-
                                                                risks (land acquisition delays, inflation,
              Transfer-Toll’ was one of the earliest
                                                                cost over-runs, construction). Even
              models of PPP. Other than sharing the
                                                                this model, over the time proved to be
              project cost (with the Government) the
                                                                unviable for the private sector due to the
              private bidder was to build, maintain,
                                                                leftover risks they were exposed to.
              operate the road and collect toll on the
                                                          (iii) EPC MODEL: The PPP model which was
              vehicular traffic. The bid was given to
                                                                seen to be a better way out to promote the
              the private company offering to share
                                                                infra projects were visibly failing by the
              maximum toll revenue to the government.
                                                                year 2010 and Government was unable
              The private party used to cover “all risks”
                                                                to attract the private players towards the
              related to—land acquisition, construction
                                                                road sector. It was in this backdrop that the
              (damage), inflation, cost over-runs
                                                                Engineering-Procurement-Construction
              caused by delays and commercial. The
                                                                (EPC) Model was announced. In this
              government was responsible for only
                                                                model, project cost was fully covered by
              regulatory clearances.                            the Government (it means, it was not a
              Due to inherent drawbacks, this model             PPP model and was like normal contracts
              proved to be unsustainable for the private        given to the bidders) together with
              bidder—undue delay in land acquisition            majority of the risks—land acquisition,
              due to litigation, cost over-runs and             cost over-runs due to delay, inflation and
              uncertainties in traffic movement                 commercial.
              (commercial risk)—made the road                   The private developers were supposed
              projects economically unviable.                   to design, construct and hand over the
         (ii) BOT-ANNUITY:            This    was      an       road projects to the government—
              improvement over the BOT-TOLL                     maintenance, operation and toll collection
              model aimed at reversing the declining            being the government’s responsibilities.
              interest of the private companies towards         Contract was given to the private player
              road projects by manly reducing the               who offered to construct roads at the