Explanation:

The Government of India had accorded Cabinet approval to Hybrid Annuity-PPP model in 2016 with 100% central sector funding.

Statement 1 and 2: Under this model, the development, operation and maintenance of the sewage treatment STPs will be undertaken by a Special Purpose Vehicle (SPV) to be created by the winning bidder at the local level. As per this model, 40% of the Capital cost quoted would be paid on completion of construction while the remaining 60% of the cost will be paid over the life of the project as annuities along with operation and maintenance cost (O&M) expenses. One of the most important features of this model is that both the Annuity and O&M payments are linked to the performance of the STP. This will ensure continued performance of the assets created due to better accountability, ownership and optimal performance. A tripartite agreement has been signed between National Mission for Clean Ganga (NMCG) and the state level executing agencies Uttarakhand Pey Jal Nigam and Uttar Pradesh Jal Nigam, with concessionaires for setting up of India’s first Sewage Treatment Plants under  Hybrid Annuity mode, at Haridwar and Varanasi.