To expedite highway building, the government by March will award projects worth more than Rs 40,000 crore on the new hybrid model while 100 projects will be bid out next fiscal, Union Minister, Nitin Gadkari, has stated.
"We have already prepared 28 projects on hybrid model. Out of these, we will award four soon. We will award projects worth over Rs 40,000 crore by March," Road Transport and Highways Minister Gadkari said.
He added, "For the next year we are going to identify 100 projects on this hybrid model."
The hybrid annuity mode is set to revive the interest of investors in the sector who were shying away from bidding road projects due to equity crunch and other issues.
Under this model, the government will provide 40 percent of the project cost to the developer to start work while the remaining investment has to be made by the developer.
"Under hybrid mode 40 percent grant in aid will be given by the government to the project with 60 per cent contribution from the from the contractor of which 30 per cent will be his investment and remaining 30 percent from the bank," Gadkari said.
The minister added that the government will offer the project with at least 80 percent land acquisition but also provide necessary regulatory clearances like environment and forest besides utility shifting will be the responsibility of the government.
By adopting the model, all stakeholders in the PPP arrangement - the NHAI, lender and the developer would have an increased comfort level resulting in revival of the sector through renewed interest of private investors.
The investment in this model is recovered through annuity payments to be made by the government over a specified period commencing from the date of commissioning of the project.