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With reference to the Hybrid Annuity Model (HAM) model for Public-Private Partnership in highway construction, consider the following statements:
1. As per the model, the government will contribute 60% of the project cost in the first five years through annual payments (annuity).
2. Under HAM, a road developer constructs the road and he/she is allowed to recover his/her investment through
toll collection.
Which of the statements given above is/are correct?
1. As per the model, the government will contribute 60% of the project cost in the first five years through annual payments (annuity).
2. Under HAM, a road developer constructs the road and he/she is allowed to recover his/her investment through
toll collection.
Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'D'. Can you explain this answer?
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Most Upvoted Answer
With reference to the Hybrid Annuity Model(HAM) model for Public-Priva...
Statement 1: As per the Hybrid Annuity Model (HAM), the government will contribute 60% of the project cost in the first five years through annual payments (annuity).
Statement 2: Under HAM, a road developer constructs the road and is allowed to recover their investment through toll collection.
Explanation:
The Hybrid Annuity Model (HAM) is a public-private partnership model that was introduced by the Government of India for highway construction projects. It aims to attract private investment in the road sector while reducing the financial burden on the government.
Statement 1: As per the model, the government will contribute 60% of the project cost in the first five years through annual payments (annuity).
- Correct: This statement is incorrect. In the HAM model, the government contributes only 40% of the project cost in the first five years through annuity payments. The remaining 60% is to be invested by the private developer.
Statement 2: Under HAM, a road developer constructs the road and is allowed to recover their investment through toll collection.
- Correct: This statement is incorrect. Under the HAM model, the road developer is allowed to recover their investment through a combination of annuity payments from the government and toll collection. The developer receives 40% of the project cost as a lump sum from the government during the construction period, and the remaining 60% is to be recovered through annuity payments over the concession period. The toll collection is used to supplement the annuity payments received by the developer.
In conclusion, neither statement 1 nor statement 2 is correct. The correct answer is option D. The government contributes 40% of the project cost through annuity payments, and the road developer recovers their investment through a combination of annuity payments and toll collection.
Statement 2: Under HAM, a road developer constructs the road and is allowed to recover their investment through toll collection.
Explanation:
The Hybrid Annuity Model (HAM) is a public-private partnership model that was introduced by the Government of India for highway construction projects. It aims to attract private investment in the road sector while reducing the financial burden on the government.
Statement 1: As per the model, the government will contribute 60% of the project cost in the first five years through annual payments (annuity).
- Correct: This statement is incorrect. In the HAM model, the government contributes only 40% of the project cost in the first five years through annuity payments. The remaining 60% is to be invested by the private developer.
Statement 2: Under HAM, a road developer constructs the road and is allowed to recover their investment through toll collection.
- Correct: This statement is incorrect. Under the HAM model, the road developer is allowed to recover their investment through a combination of annuity payments from the government and toll collection. The developer receives 40% of the project cost as a lump sum from the government during the construction period, and the remaining 60% is to be recovered through annuity payments over the concession period. The toll collection is used to supplement the annuity payments received by the developer.
In conclusion, neither statement 1 nor statement 2 is correct. The correct answer is option D. The government contributes 40% of the project cost through annuity payments, and the road developer recovers their investment through a combination of annuity payments and toll collection.
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Community Answer
With reference to the Hybrid Annuity Model(HAM) model for Public-Priva...
- Hybrid Annuity Model (HAM) has been introduced by the Government to revive PPP (Public-Private Partnership) in highway construction in India.
- HAM is a mix of The Build Operate and Transfer (BOT) Annuity and Engineering, Procurement and Construction (EPC) Models. As per the design, the government will contribute 40% of the project cost in the first five years through annual payments (annuity). The remaining payment will be made on the basis of the assets created and the performance of the developer. Hence, statement 1 is not correct.
- Unlike the BOT model, under HAM there is no toll right for the developer. Under HAM, Revenue collection would be the responsibility of the National Highways Authority of India (NHAI). Hence, statement 2 is not correct.
- The advantage of HAM is that it gives enough liquidity to the developer and the financial risk is shared by the government. While the private partner continues to bear the construction and maintenance risks as in the case of the BOT (toll) model, he is required only to partly bear the financing risk. The government’s policy is that the HAM will be used in the case of stalled projects where other models are not applicable.
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With reference to the Hybrid Annuity Model(HAM) model for Public-Private Partnershipin highway construction, consider thefollowing statements:1. As per the model, the government willcontribute 60% of the project cost in thefirst five years through annual payments(annuity).2. Under HAM, a road developerconstructs the road and he/she is allowedto recover his/her investment throughtoll collection.Which of the statements given above is/arecorrect?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer?
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With reference to the Hybrid Annuity Model(HAM) model for Public-Private Partnershipin highway construction, consider thefollowing statements:1. As per the model, the government willcontribute 60% of the project cost in thefirst five years through annual payments(annuity).2. Under HAM, a road developerconstructs the road and he/she is allowedto recover his/her investment throughtoll collection.Which of the statements given above is/arecorrect?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about With reference to the Hybrid Annuity Model(HAM) model for Public-Private Partnershipin highway construction, consider thefollowing statements:1. As per the model, the government willcontribute 60% of the project cost in thefirst five years through annual payments(annuity).2. Under HAM, a road developerconstructs the road and he/she is allowedto recover his/her investment throughtoll collection.Which of the statements given above is/arecorrect?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to the Hybrid Annuity Model(HAM) model for Public-Private Partnershipin highway construction, consider thefollowing statements:1. As per the model, the government willcontribute 60% of the project cost in thefirst five years through annual payments(annuity).2. Under HAM, a road developerconstructs the road and he/she is allowedto recover his/her investment throughtoll collection.Which of the statements given above is/arecorrect?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer?.
With reference to the Hybrid Annuity Model(HAM) model for Public-Private Partnershipin highway construction, consider thefollowing statements:1. As per the model, the government willcontribute 60% of the project cost in thefirst five years through annual payments(annuity).2. Under HAM, a road developerconstructs the road and he/she is allowedto recover his/her investment throughtoll collection.Which of the statements given above is/arecorrect?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about With reference to the Hybrid Annuity Model(HAM) model for Public-Private Partnershipin highway construction, consider thefollowing statements:1. As per the model, the government willcontribute 60% of the project cost in thefirst five years through annual payments(annuity).2. Under HAM, a road developerconstructs the road and he/she is allowedto recover his/her investment throughtoll collection.Which of the statements given above is/arecorrect?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to the Hybrid Annuity Model(HAM) model for Public-Private Partnershipin highway construction, consider thefollowing statements:1. As per the model, the government willcontribute 60% of the project cost in thefirst five years through annual payments(annuity).2. Under HAM, a road developerconstructs the road and he/she is allowedto recover his/her investment throughtoll collection.Which of the statements given above is/arecorrect?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer?.
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