Hybrid Annuity Model for building roads modified

Sakal Times
Tuesday, 24 October 2017

Earlier, the government was supposed to invest 40 per cent of the project cost and rest would be by the contractor appointed for the project. The money invested by the private contractor will be returned in installments over the course of 15 years. Also, the works were to be divided into packages of 100 km

Mumbai: The State Cabinet on Tuesday modified the Hybrid Annuity Model for the construction of roads in the State. The Public Works Department (PWD) plans to upgrade State highways and important roads connecting major cities in each district under a ‘hybrid annuity’ model at a cost of over Rs 30,000 crore.

Earlier, the government was supposed to invest 40 per cent of the project cost and rest would be by the contractor appointed for the project. The money invested by the private contractor will be returned in installments over the course of 15 years. Also, the works were to be divided into packages of 100 km.

On Tuesday, the government changed these conditions and the government’s share will be increased to 60 per cent. With less investment from private players, the time period during which investment was to be returned was reduced to 10 years from 15 years.

In a bid to allow smaller contractors, the road packages have been cut to 50 km. According to the PWD officials, it will ensure larger participation of private players. The State Cabinet has also decided to undertake road improvement work under Engineering, Procurement and Construction (EPC) basis, if it fails to attract contractors for the 50 km packages as well.

Related News