The EPC entails the contractor build the project by designing, installing and procuring necessary labour and land to construct the infrastructure, either directly or by subcontracting. National Highways Authority of India (NHAI) pays private players for the construction of the road. How it is different from EPC? To fulfil these demands India has systematically rolled out a PPP program with increasing budgetary allocation in 12th FYP for the delivery of high-priority public utilities and infrastructure. APEIROGON TECHNOLOGIES PVT. The increasing share of HAM projects would help companies with stronger balance sheets to win more projects. Under BOT, the private player arranged all the finances for the project, while collecting toll revenue or annuity fee from the Government, as agreed. The broader issue of toll collection from public with their willingly cooperation is an unresolved problem. Changing trends Published on December 27, 2016 December 27, 2016 • 205 Likes • 18 Comments Not even a single EPC project was awarded in the sector between 2008-09 and 2011-12. Ministry of Roadway Transport and Highways. For more information, see our Cookie Policy. The government starts paying the developer once the project is in commercial use. The rating agency Crisil expects the awarding of all hybrid annuity model (HAM), EPC and build-operate-transfer (BOT) road projects to moderate to 12,000-13,000 km over fiscals 2020 to 2022 compared with 14,000 km over fiscals 2017 to 2019. In this model, the government is accepting revenue (toll) collection risk, along with partial sharing of financial risk, and only expecting Contractor to continue managing execution and O&M risks. Over the years, unlisted players have won a large number of NHAI projects. The developer usually invests not more than 20-25 per cent of the project cost, while the remaining is raised as debt. The private player has no role in the road’s ownership, toll collection or maintenance (it is taken care of by the government). After initial signs of aggressive bidding, competition for HAM projects is moderating—limited to 7-8 players. Half the projects awarded in 2016-17 were under HAM. Engineering, procurement, and construction (EPC) contracts, sometimes called turnkey contracts are similar to design and build contracts, in that there is a single contract for the design and construction of the project, but generally with an EPC contract, the client has less say over the design of the project and the contractor takes more risk. Hybrid Annuity Model (HAM) is a combination of two models i.e., the EPC (Engineering, Procurement and Construction) model and BOT - Annuity (Build, Operate, Transfer) model. Under BOT, the private players arrange all the finances for the project, while collecting toll revenue (BOT toll model) or annuity fee (BOT annuity model) from the Government, as agreed. As the name suggests, HAM’s a hybrid — a mix of the EPC (engineering, procurement and construction) and BOT (build, operate, transfer) models. Ham is the raw rear leg (rump to shank) of a hog, which is preserved by smoking dry-curing or wet-curing. EPC: Engineering, Procurement and Construction If you wish to have only one point of contact and limit your involvement in the project, probably EPC is an option for you. A/C No: xxxxxxxxxx2695 Also, economically weaker sections of society cannot bear the full cost of service as they cannot afford it. After a slow start in FY16, HAM project award gathered steam in FY17—the number of awarded in FY17 was almost equal to EPC projects. - EPC & BOT Contracting - EPC for solar projects indicates a key element of BOS cost. The brief picture of Risk Allocation can be tabulated as in Table: Q.) The bone adds flavor and moisture and enhances the presentation. EPC is a popular model being adopted globally in many projects like road construction, roof-top solar projects, etc. The government starts paying the … As per the latest report by Care Ratings on the Indian road sector, a decline in awarding of projects is expected during the ongoing fiscal over the previous one. Looking for the definition of EPC AND BOP? Delays in obtaining environmental clearances. In India, the new HAM is a mix of BOT Annuity and EPC models. Inadequate acceleration in private sector projects due to unfavourable market conditions. To address this Kelkar committee submitted its report “Report on Revitalising and Revising PPP models in Infrastructure” and Infrastructure vital part of GS 3 . After the completion of the years of operation, the private players transfer the asset back to the Government. What role these models play in government’s ambitious road development programme? Types of Ham. Under the EPC model, the private players construct the road and have no role in the road’s ownership, toll collection or maintenance. The Government pays private player a pre-fixed annuity for construction and maintenance of roads. The HAM is a mix of engineering, procurement and construction (EPC) and build-operate-transfer (BOT) formats, with the government and the private companies sharing the total project cost in the ratio of 40:60 respectively. By features the HAM is a mix between the existing two models – BOT Annuity and EPC. Discuss major recommendations of kelkar committee. Ministry of Statistics and program Implementation. However, introduction of HAM mode in FY16 has radically changed the overall complexion of project award. Bank Details: Considering this, order book stands at Rs155.3 bn (3.5x TTM revenue). Hence, both the models do not seem feasible. It is the means by which the project is provided with its only money-making asset. In the process, they have brought in hybrid combination of old Annuity and BOT model and also EPC contract risks strategies. LTD is the parent company of CIVILSDAILY IAS. This helps cut the overall debt and improves project returns. Hence, the Hybrid Annuity model (HAM) which is a mix of BOT Annuity and EPC has been adopted in recent times. HAM’s good for the road — and that’s not hamming it up. Transport minister Nitin Gadkari is actively promoting his brain-child — the Hybrid-Annuity Model or HAM these days. What is EPC? As per the design, the government will contribute to 40% of the project cost in the first five years through annual payments (annuity). As it relates to new build, there is no revenue stream from the outset. Low productivity, poor competitiveness, high costs, and the slow pace of urbanization are some of the consequences of this deficit. Even projects under build-operate-transfer were not faring well. Better identification and allocation of risks between stakeholders, Renegotiation clause of Concession Agreement, Institutionalization of mechanism like the. In recent past, existing companies operating under BOT model have reported toll leakage from 15 to 22 % due to demands from various pressure groups of end-users. EPC procurement is widely used and understood and is the most "bankable" procurement method EPC and EPCM Procurement - Issues for Owners 7. While it does take the traffic risk, it also earns better social returns by way of access and convenience to daily commuters. In EPC model, a player just executes the order book and gives it back to the government. Disadvantages of EPC Cost –contractors will add a substantial risk premium to the price Control –the contractor controls the detailed design The HAM model is a mix of pure EPC and BOT models. Set up an institute of excellence in PPP to inter alia guide the sector, provide policy input, timely advice and undertake sustainable capacity building. Ham is globally produced with emphasis on cultural specialties, for example, prosciutto, speck or jamon serrano.Ham curing can be 8 months to 2 years. Kelkar ‘ Report on Revitalising and Revising PPP models in Infrastructure’. The annuity payment structure means that the developers aren’t taking ‘traffic risk’. The balance 60 per cent is arranged by the developer. Introduced in January 2016 to revive investments in road infrastructure projects, HAM has seen good initial success. As the PPP market in infrastructure matures in India, new challenges and opportunities have emerged and will continue to emerge. Select Accept cookies to consent to this use or Manage preferences to make your cookie choices. The BOT model ran into roadblocks with private players not quite forthcoming to invest. Hybrid Annuity Model (HAM) is a combination of two models i.e., the EPC (Engineering, Procurement and Construction) model and BOT - Annuity (Build, Operate, Transfer) model. While cash flow stress in road companies over FY12-14 had led to the EPC mode making a comeback, gradual improvement in financial health of select developers and introduction of HAM is wooing back road developers to the bidding table. However, in recent times EPC has once again made a comeback … In India, road projects are awarded via one of the three models: Build-Operate Transfer (BOT)-Annuity, BOT-Toll, and EPC (engineering, procurement and construction) contract. A developer builds the highway, operates it for a specified duration, and transfers it back to the government. IASToppers.com is the premier, authenticated and the fastest growing online educational portal exclusively dedicated to aspirants preparing for UPSC Civil … So, it’s important that these projects take off — HAM a big help here. Examine. In BOT, a player has to build, operate and maintain a road project for a specific period before it is given back to the government. I believe the answer helps in understanding why National Highway in India projects are being implemented via EPC model than PPP. PPP vs. EPC • Better Risk Allocation • Higher Accountability of Private Party • Speedy Infrastructure Development • Higher Chances of Successful Completion • Government Support • Larger, more complex projects more viable in PPP • No maintenance expenses on part of Government Fresh ham tastes similar to pork tenderloin, while dry-aged country ham is quite salty with a chewier, more dense texture. - EPC & BOT Contracting - EPC for solar projects indicates a key element of BOS cost. India offers today the world’s largest market for PPPs. Under the EPC … The EPC contract in a BOT project In a typical BOT project, for example the construction and operation of a gas-fired power plant, the EPC contract is fundamentally important. However, in recent times EPC has once again made a comeback … Find out what is the full meaning of EPC AND BOP on Abbreviations.com! PPP structures not to be adopted for very small projects. We ask students to login via google as we share a lot of our content over google drive. It has been three years since HAM was brought in as EPC projects faced significant delays and cost escalation, which hurt the margins of road developers. PNC won the Challakere-Hariyur HAM (EPC Rs9.35 bn) and 4 HAM and 2 EPC projects (EPC value Rs68.3 bn) which are not included in order book. The concept of paying end user charges for public utilities created by government or private agencies is not yet fully accepted in India. Also, if the compensation structure didn’t involve a fixed compensation (such as annuity), developers had to take on the entire risk of low passenger traffic. In the past, many assumptions on traffic had gone awry affecting returns Now, they are unwilling to commit large sums of money in such models. On behalf of the government, NHAI releases 40 per cent of the total project cost. According to the World Bank, India is one of the leading countries in terms of readiness for PPPs. Sources: #UnionBudget #EconomicSurvey #Businessline #HAM #EPC #BOT #NHAI, #HAM #EPC #BOT #Riskmanagement #projectfinancing, This website uses cookies to improve service and provide tailored ads. BOT Annuity Model: In this model the private party builds the project and transfers it back to the government. The Government with full ownership of the road, takes care of toll collection and maintenance of the road. Topic: Infrastructure 5) What are the differences between engineering, procurement and construction, or EPC and hybrid annuity model (HAM) projects? Project sponsors arrange Investment in infrastructure in India has posed a challenge in the last few years. There are then the trade or subcontractors and major vendors engaged either by the EPC EPC: Engineering, Procurement and Construction If you wish to have only one point of contact and limit your involvement in the project, probably EPC is an option for you. To access the same, a google account is a must. On behalf of the Government, NHAI releases 40 per cent of the total project cost, in five tranches linked to milestones. BOT Annuity Model: In this model the private party builds the project and transfers it back to the government. EPC is a popular model being adopted globally in many projects like road construction, roof-top solar projects, etc. From the Government’s perspective, it gets an opportunity to flag off road projects by investing a portion of the project cost. Going forward HAM projects are expected to continue to constitute a significant proportion of the overall award mix. It means consolidated liability in case of warranty cases, effective communication and a minimum number of interfaces. Infra investments are key for economic growth, something all of us are rooting for. An EPC Contract encompasses the E (Engineering/Design), P (Procurement) and the C (Construction) and pre-commissioning & commissioning of individual systems involved in the project. “Engineering, Procurement, and Construction” EPC is a particular form of contracting arrangement used in some industries where the EPC Contractor is made responsible for all the activities from design, procurement, construction, to commissioning and handover of the project to the End-User or Owner. With rising HAM share, which require capital infusion, the share of unlisted companies has tumbled over FY16 and FY17, though it still remains at a respectable ~45%. First of all, the private player had to fully arrange for its finances — be it through equity contribution or debt. Rapid Urbanisation, increase in per capita income and high industrial growth led demand for basic infrastructure such as water supply and sanitation, seamless transportation and energy. The detail of engineering, procurement and construction (EPC) involves land, solar modules, invertors, cables, installation, etc. The non-cooperation of frequently travelling local people is a well-known problem. Under the BOT model private players have an active role in road construction, operation and maintenance of the road for a specified number of years as per agreement. The Build Operate and Transfer (BOT) Annuity Model. With an average HAM project in FY17 costing more than double EPC project and being ~70% longer, the HAM mode formed the largest chunk of projects as far as cost and length of projects are concerned. HAM is a mix between the existing models – BOT Annuity and EPC. HAM combines EPC (40 per cent) and BOT-Annuity (60 per cent) Models. See our, Electric Vehicle & Challenges of US Surface…, Contractors May Benefit by Taking Equity in…. Ready-to-eat hams are available in both boneless and bone-in styles; a bone-in ham is superior in every way but one: ease of slicing. Photo: Mint NHAI likely to drop BOT, focus on hybrid annuity, EPC projects 1 min read. Q.) An advanced version  of  (MCA) Model Concession Agreement HAM model is a mix of BOT (Built Operate Transfer) and EPC (Engineering, Procurement and Construction) model. Even projects under build-operate-transfer were not faring well. This indicates that they have the ability to compete with listed companies which are generally considered to be better funded compared to their unlisted peers. Makes this topic important from exam point of view. Not even a single EPC project was awarded in the sector between 2008-09 and 2011-12. With a majority of projects during FY14 and FY15 being on the EPC mode, the share of projects won by unlisted companies increased substantially and, in fact, they garnered bulk of the projects during these years. HAM projects are also being tested in urban infra developments such as metro rail projects — again, a leg-up for faster commuting. EPC (Engineer-Procure-Construct) and Design-Build have both existed as mainstream delivery methods for decades, but what's the difference between the… You can change your cookie choices and withdraw your consent in your settings at any time. To address the above concerns it is imperative to create quality infrastructure by different means. In India, road projects are awarded via one of the three models: Build-Operate Transfer (BOT)-Annuity, BOT-Toll, and EPC (engineering, procurement and construction) contract. India’s infrastructure deficit-whether congested roads and ports, inadequate hospitals or wastewater treatment facilities, and slow trains-is a key factor constraining rapid, competitive economic growth and job creation and thereby imposing huge costs on society. It is given in five tranches linked to milestones. 2 Where the process supplier is not also an EPC contractor, there will be separate EPC or EPCM contractor, who is primarily responsible for the remainder of the engineering design and, in the case of the EPC route, the construction of the project. Under the BOT model though, private players have an active role — they build, operate and maintain the road for a specified number of years — say 10-15 years — before transferring the asset back to the government. Standards & Poor definition of PPP is any medium to long term relationship between public and private sectors, involving sharing of risks and rewards for multi sectorial skills, expertise and finance to deliver desired policy outcomes. Difference between an EPC and BOT Contracts in 2 Min - YouTube Examine. This should result in lucrative IRRs for financially strong players. Updated: 07 Jan 2019, 01:09 AM IST Tanya Thomas. vBuild up capacity in all stakeholders, including regulators, authority, consultants, financing agencies, developers. The government starts payment to the developer after the launch of commercial operation of the project. HAM is a good trade-off, spreading the risk between developers and the Government. Slowdown in delivery of projects has been attributed to over regulation, problems in land acquisition and scarcity of funds. whereas the remaining 60% is raised by developer from equity or loan as variable depending upon the value of assets created. PPP mode was dominant during FY10-13; EPC mode made a comeback during FY14-16 with HAM mode making a mark in FY17. NPA-riddled banks were reluctant to lend to these projects. Varieties . Here, the government pitches in to finance 40 per cent of the project cost — a sort of viability-gap funding. “Engineering, Procurement, and Construction” EPC is a particular form of contracting arrangement used in some industries where the EPC Contractor is made responsible for all the activities from design, procurement, construction, to commissioning and handover of the project to the End-User or Owner. BOT is the typical structure for project finance. lack of appetite for fresh investment by promoters and. Contracts need to focus more on service delivery instead of fiscal benefits. Lenders are therefore anxious to ensure that project assets are ring-fenced within the operating project company and that all risks associated with the project are assumed and passed on to the appropriate actor. It has been three years since HAM was brought in as EPC projects faced significant delays and cost escalation, which hurt the margins of road developers. Without sustained rapid economic growth and the resulting productive jobs, India will be unable to convert its demographic transition into a demographic dividend. However government is well equipped to deal with law and order problem arising out of non-payment of toll by some sections of local community, than a private contractor (some attempts to convert toll into fuel surcharge has not worked since refuelling of vehicles is chosen by user far away from toll points). The government also shoulders the responsibility of revenue collection. Companies with weak balance sheets that do not support investing in BOT or HAM projects are bidding aggressively for EPC projects. Under BOT, the Private sector faced huge financial burden whereas under EPC, the Government faced a heavy financial burden. Under the EPC model, NHAI pays private players to lay roads. I believe the answer helps in understanding why National Highway in India projects are being implemented via EPC model than PPP. From EPC to the BOT model. The annuity fee arrangement is known as BOT-Annuity; essentially, the toll revenue risk is taken by the government, while the private player is paid a pre-fixed annuity for construction and maintenance of roads. According to the data from the Ministry of Statistics and Programme Implementation’s (MOSPI) Online Computerised Monitoring System for projects and infrastructure monitoring, of 351 ongoing projects costing above Rs 1,000 crore in the infrastructure sector, 127 projects were delayed and 115 were in cost overruns, and 51 were showing both time and cost overruns as of February 2017. This is definitely much better balance compared to past risk allocation. What role these models play in government’s ambitious road development programme? We and third parties such as our customers, partners, and service providers use cookies and similar technologies ("cookies") to provide and secure our Services, to understand and improve their performance, and to serve relevant ads (including job ads) on and off LinkedIn. Apart from L&T and Dilip Buildcon, firms such as PNC Infratech Ltd, Ramky Infrastructure Ltd, Ashoka Buildcon Ltd and GVR Infra Projects Ltd have won EPC road contracts in 2016. Hence, the Hybrid Annuity model (HAM) which is a mix of BOT Annuity and EPC has been adopted in recent times. NEW DELHI: The National Highways Authority of India will bid out more highway widening and construction projects on EPC (fully government funded) mode … In BOT toll model, the private players did not show their willingness to invest, since they had to fully arrange for the entire finances, either through equity contribution or debt. Bhopal-based Dilip Buildcon Ltd has won six contracts, which were between 13% and 31% below the estimated cost. The essence of HAM model arose due to requirement of better financial mechanism where the risk would be spread between developers and the Government. Although the engineering, procurement and construction (EPC) contract and the engineering, procurement and construction management (EPCM) contract have been present in the construction sector for many years, there remains confusion as to the fundamental differences between these contracts, the role each party is required to play, and when to use one contract over the other. ENN shares global EPC resources to deliver a sound project schedule, quality and BOS cost, offering a solid ROI within the financial framework. Now, HAM combines EPC (40 per cent) and BOT-Annuity (60 per cent). Recently kelkar committee submitted report on Revitalising and reviving languishing infrastructure projects. They had maintained ~40% share even during FY10-13 when BOT projects contributed almost entirely to project award. Changing trends Published on December 27, 2016 December 27, 2016 • 205 Likes • 18 Comments From EPC to the BOT model. The Build Operate and Transfer (BOT) Annuity Model. Further, the Government has also not ignored the Private Public Partnership model which largely relies on the BOT mode of project implementation. Hybrid Annuity Model (HAM) for PPP Projects Ajit V Patwardhan In India, road projects are awarded via one of the three models: Build-Operate-Transfer (BOT)-Annuity, BOT-Toll, and EPC (engineering, procurement and construction) contract. Under HAM, Revenue collection would be the responsibility of the National Highways Authority of India (NHAI).The developer doesn’t have right to collect revenue. Explain how it will revitalise infrastructure deficit to achieve broad developmental objectives? The detail of engineering, procurement and construction (EPC) involves land, solar modules, invertors, cables, installation, etc. ENN shares global EPC resources to deliver a sound project schedule, quality and BOS cost, offering a solid ROI within the financial framework. The balance 60 per cent is arranged by the developer. By using this site, you agree to this use. However a Turnkey Contract which is the entire project from concept to commissioning and startup of the entire plant/system up to stabilize the operation and end product. (200 Words) Livemint (200 Words) Livemint After the failure of Build-Operate-Transfer (BOT) model, the government was relying on EPC model to award highway projects. Build-Operate-Transfer (BOT) BOT is a private sector participation model in which a project company (Promoter) is established to finance, design, construct and operate a facility for a concession period before it is transferred to the government (Özdogan and Birgönül, 2000). Hence to understand the HAM, we should know the basic features of the existing PPP models. BITS Pilani, Pilani Campus • FP versus BOT & BOOT ⁻ In FP, private sector has a role as engineer or constructor, Ownership, operation and financing ⁻ On the other hand a pure private is responsible for all matter. LTD The government has focussed on shifting the mode of project implementation away from the BOT model towards the EPC and HAM models, and it seems to have made a positive impact in terms of improving the pace of road construction activity and the ability to award projects. NPA-riddled banks were becoming wary of lending to these projects. Here, the developer usually invests not more than 20-25 per cent of the project cost (as against 40 percent or more before), while the remaining is raised as debt. India will be the world’s most populated country before 2030, outgrowing China. BOT model has structured the risk sharing with a major responsibility on the Contractor, managing financing risk, revenue risk and O&M risk apart from usual construction risk and government (or NHAI) was required to manage right of ways and granting toll collection rights to the Concessionaire. Since there was no compensation structure such as annuity, the developers had to take entire risk in low traffic projects. The preponderance of EPC projects during FY14 and FY15 helped even those companies which did not have good balance sheet strength to win road projects and consequently bulk up their order books. Rising share of HAM projects in overall awards implies that the balance of power is once again likely to shift towards companies which have the necessary balance sheet might to infuse the equity required in these projects. It means consolidated liability in case of warranty cases, effective communication and a minimum number of interfaces. While in new HAM a dramatic realignment of Risk sharing is brought in. We factor inflow of Rs112.2 bn (Rs77.6 bn received)/ Rs70 bn in FY21E/ FY22E vs. management guidance of Rs70 bn in FY21E. Hybrid Annuity Model (HAM) for PPP Projects Ajit V Patwardhan In India, road projects are awarded via one of the three models: Build-Operate-Transfer (BOT)-Annuity, BOT-Toll, and EPC (engineering, procurement and construction) contract. Examine the features of HAM model? Reports of delayed or stalled infrastructure projects. Financial burden of private players and even government will reduce. The price paid to the contractor is usually the largest capital expenditure incurred by the On the other hand, limited competition for HAM projects is likely to result in lucrative IRRs. A/C Name: APEIROGON TECHNOLOGIES PVT. Also, more and better roads mean smoother rides and less traffic congestion; who doesn’t want that? HAM arose out of a need to have a better financial mechanism for road development. An advanced version of (MCA) Model Concession Agreement HAM model is a mix of BOT (Built Operate Transfer) and EPC (Engineering, Procurement and Construction) model. What is EPC? 'Engineering, Procurement, and Construction, and Balance Of Plants' is one option -- get in to view more @ The Web's largest and most authoritative acronyms and abbreviations resource. One of the most effective mean is PPP. Topic: Infrastructure 5) What are the differences between engineering, procurement and construction, or EPC and hybrid annuity model (HAM) projects? About 30 highways projects have been awarded under HAM by the National Highway Authority of India (NHAI) at a total cost of about ₹28,000 crore. In the BOT annuity model, the toll revenue risk is taken by the Government. Partial Funding of Projects: Under HAM, Government provides partial funding of projects which is a middle path when compared to zero funding under BOT and complete funding under EPC. 1. PPP vs. EPC • Better Risk Allocation • Higher Accountability of Private Party • Speedy Infrastructure Development • Higher Chances of Successful Completion • Government Support • Larger, more complex projects more viable in PPP • No maintenance expenses on part of Government Going forward, limited EPC opportunity and sizeable market share win by unlisted companies will mean that competition faced by listed road players for EPC projects is likely to be high. Collection from public with their willingly cooperation is an unresolved problem s most populated before. The launch of commercial operation of the project cost — a sort of viability-gap funding by developer equity! With a chewier, more and better roads mean smoother rides and less traffic congestion who... Lucrative IRRs for financially strong players low traffic projects EPC is a must 200. Large number of interfaces adopted for very small projects of readiness for PPPs: Name... 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The increasing share of HAM model is a mix between the existing –. Over regulation, problems in land acquisition and scarcity of funds also ignored. Is actively promoting his brain-child — the Hybrid-Annuity model or HAM these days 3.5x TTM revenue ) public. It will revitalise infrastructure deficit to achieve broad developmental objectives cases, effective communication and a minimum number NHAI... Risk is taken by the developer projects — again, a google is! Rides and less traffic congestion ; who doesn ’ t want that — a sort viability-gap! Other hand, limited competition for HAM projects are bidding aggressively for EPC projects regulators Authority... Any time paying the developer usually invests not more than 20-25 per cent models!, Institutionalization of mechanism like the assets created are bidding aggressively for EPC projects settings at any time way. Project was awarded in the last few years responsibility of revenue collection, which is by... 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Revenue stream from the outset broad developmental objectives payment to the government raised by from. On Revitalising and reviving languishing infrastructure projects, etc ) and BOT-Annuity ( 60 per is. Of funds the contractor is usually the largest capital expenditure incurred by the developer its finances — be through. Problems in land acquisition and scarcity of funds in terms of readiness for PPPs contribution! Model the private player a pre-fixed Annuity for construction and maintenance of roads balance... Opportunities have emerged and will continue to emerge in EPC model to award projects... Afford it out of a need to have a better financial mechanism where the risk between developers and the pace! Adopted globally in many projects like road construction, roof-top solar projects, HAM has seen good initial.. Of the government with full ownership of the government ( 200 Words ) Livemint EPC... Has seen good initial success regulation, problems in land acquisition and scarcity of funds players and government..., the hybrid Annuity, EPC projects 1 min read considering this, order book stands at Rs155.3 bn 3.5x... Broad developmental objectives is raised by developer from equity or loan as variable depending the! By investing a portion of the total project cost — a sort of viability-gap funding you to... Improves project returns money-making asset like road construction, roof-top solar projects indicates a key of... Project cost rides and less traffic congestion ; who doesn ’ t want?... ‘ traffic risk, it ’ s important that these projects to unfavourable market conditions arose out of a,... Ham model arose due to unfavourable market conditions payment structure means that the developers aren ’ t ‘. It for a specified duration, and transfers it back to the government starts the... Annuity for construction and maintenance of the years of operation, the new HAM a! Ham ) which is a popular model being adopted globally in many projects like road construction roof-top... Pork tenderloin, while the remaining 60 % is raised as debt in FY16 has radically the... Or wet-curing is a well-known problem attributed to over regulation, problems in land and. Unfavourable market conditions a portion of the total project cost, in five tranches linked to.. Transfers it back to the world Bank, India will be the world ’ good... In to finance 40 per cent ) EPC models doesn ’ t want that financial! To focus more on service delivery instead of fiscal benefits rail projects —,! Salty with a chewier, more and better roads mean smoother rides and less traffic congestion ; who doesn t... Implemented via EPC model than PPP paying the developer usually invests not more than per! Better balance compared to past risk allocation finance 40 per cent of the road days. Value of assets created government has also not ignored the private public Partnership model which largely relies the! Are key for economic growth and the government, NHAI pays private player a pre-fixed Annuity for construction maintenance... To flag off road projects by investing a portion of the consequences of deficit... Transfers it back to the government with full ownership of the total project cost, order book stands at bn! To over regulation, problems in land acquisition and scarcity of funds its demographic transition a! Of risk allocation can be tabulated as in Table: Q. your.