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What is Hybrid Annuity Model (HAM) in infrastructure development? What are the risks associated with the HAM model. 10 marks

Written by

Parth Verma

in

Mentor’s comment-
  • https://www.financialexpress.com/opinion/hamsome-gains/2171329/
  • In the intro, mention various model like EPC, BOT and HAM in the infrastructure development.
  • In the body, explain the model and how it is linked with the interest rate in the market. In the risks mention the risks of affecting viability due to low-interest rates and second risk is related with delayed interest rate transmission.
  • Conclude by mentioning the need to deal with the issues of low interest rates and delays in transimission.

Comments

2 responses to “What is Hybrid Annuity Model (HAM) in infrastructure development? What are the risks associated with the HAM model. 10 marks”

  1. KG Avatar
    KG

    .

    1. Parth Verma Avatar
      Parth Verma

      Hi KG
      Good intro
      You can write that Hybrid Annuity Model is a mix of the EPC and BOT models. The government will contribute to 40% of the project cost in the first five years through annual payments (annuity). The balance 60 per cent is arranged by the developer, and is recovered as variable annuity amount after the completion of the project from NHAI which collects revenue.
      Reforms are discussed in a decent manner.
      Good structure.
      Keep writing.

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