9.38       ndian    onom
            lowest cost/price guaranteeing the desired         risks (delays from the government side
            quality levels. It means, the private              in clearances and land acquisition have
            player in this model was only exposed              chances to enhance the degree of risks
            to the construction-related risks which            private players are exposed to). But
            is a normal risk involved in any contract          overall, this is the best PPP model for the
            given by the government to the private             time devoid of most of the flaws of past.
            party.                                             Private sector has shown good response
            EPC Model could have been a temporary              to this model. By early 2018, this model
                                                               was notified by the Government for other
            way out to develop road projects as it was
                                                               infra sectors too.
            fully funded by the government—reform
            era had aimed to attract investment from       (v) Swiss Challenge Model: Government of
            the private players by evolving a ‘business        India, for the first time, announced the
            model’ for the road sector—need was                use of this model for redevelopment of
                                                               railway stations in the country (by late
            to develop a new PPP model. In this
                                                               2015). This is a very flexible method of
            backdrop we see the government coming
                                                               giving contracts (i.e., public procurement)
            up with a new PPP model for the road
                                                               which can be used in PPP as well as non-
            projects—the Hybrid Annuity Model.
                                                               PPP projects.
       (iv) HAM: Hybrid Annuity Model (HAM)                    In this, one bidder is asked by the
            is a mix of EPC and BOT-ANNUITY                    government to submit the proposal for
            models. In this model the project cost is          the project which is put in public domain.
            shared by the government and the private           Afterwards, several other bidders submit
            player in ratio of 40:60, respectively.            their proposals aimed at improving and
            The private player is responsible to               beating the original (first) bidder—
            construct and hand over the roads to               finally an improved bid is selected (called
            the government which will collect toll             counter proposal). If the original bidder
            (if wishes)—maintenance remaining the              is not able to match the counter proposal,
            responsibility of the private player till          the project is awarded to the counter
            the annuity period. Private player is paid         bidder. Government has made it an
            a fixed sum of economic compensation               online method.
            (called ‘annuity’, similar to the BOT-             Though, the Government of India used
            ANNUITY model of past) by the                      this model for the first time, this has
            government for a fixed tenure (normally            already been used by several states by
            15 years, though it is flexible). The private      now—Karnataka, Andhra Pradesh,
            player which demands lowest annuity (in            Rajasthan, Madhya Pradesh, Bihar,
            bidding) gets the contract.                        Punjab and Gujarat—for roads and
            In this model, most of the major risks             housing projects. In 2009, the Supreme
            are covered by the government—land                 Court approved the method for award of
            acquisition, clearances, operation, toll           contracts.
            collection and commercial while the risks     (vi) PPP Model for other sectors: Though, the
            related to inflation and cost over-runs are        idea of PPP model was originally evolved
            shared in ratio of the project cost sharing.       for the infrastructure sector, in recent
            But the private sector is still exposed            times, there have been proposals for its uses
            to the construction and maintenance                in other areas, too—such as education,