In the TOT model, the right to collect and monopolize royalties for certain operational highway (NH) projects built with public funds is granted to concessionaires (developers/investors) for a predetermined concession period, upon advance payment of a lump sum to NHAI. This transfer of rights is based on the toll revenue potential of the identified NH projects. The operation and maintenance (O&M) obligations of such projects are due to the concessionaire until the end of the concession period. The concessionaires of these projects shall be designated under a transparent and uniform procurement procedure within a pre-established and approved implementation framework. The Ministry of Road Transport and Motorways has introduced the hybrid annuity model for the implementation of motorway projects in order to promote private sector participation through appropriate incentives. The objective is to maximize the quantum of highway projects implemented within the limits of the government`s available financial resources. According to this model, 40% of the project costs must be paid by the government as “construction support” for the private developer during the construction period and 60% in repo during the duration of the concession, as well as interest on the outstanding amount to the concessionaire. There is a separate provision for O&M payments made by the government to the concessionaire. The individual does not have to bear the risk of traffic. All payments were indexed to inflation by a multiple price index, which is a weighted average of WPI and CPI (IW) on a 70:30 basis.
This reduces the risk of inflation for the developer. (This story was not edited by standard professionals and is automatically generated from a syndicated feed.) The government approved the proposal to allow NHAI, monetize publicly funded NH projects that operate and generate toll revenue for at least two years after CSB through the toll operate transfer (ToT) Model, subject to case-by-case approval by the competent Authority of MoRTH/NHAI. Business Standard has always strived to provide up-to-date information and feedback on developments that interest you and have a broader political and economic impact on the country and the world. . . .