Consider the following statements regarding hybrid annuity model for building national highway...........

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Consider the following statements regarding hybrid annuity model for building national highways:

1. Currently all the highways in India are constructed through this model.

2. In this model developer builds a highway, operates it for a specified duration and transfers it back to the government, which then pays the developer annuity over the period of concession.

3. Under this model Revenue collection would be the responsibility of the National Highways Authority of India (NHAI).

Which of the above statements are correct?

1 and 3 only

1 and 2 only

1, 2 and 3 only

3 only

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Explanation:

Hybrid Annuity Model
• The union government approved the hybrid annuity model for building national highways, paving the way for construction of 28 projects worth Rs. 36,000 crore this fiscal year.
• Under this model,the government will contribute to 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. Here, hybrid annuity means the first 40% payment is made as fixed amount in five equal installments whereas the remaining 60% is paid as variable annuity amount after the completion of the project depending upon the value of assets created. As the government pays only 40%, during the construction stage, the developer should find money for the remaining amount. Here, he has to raise the remaining 60% in the form of equity or loans. There is no toll right for the developer. Under HAM, Revenue collection would be the responsibility of the National Highways Authority of India (NHAI).
• There are other ways also for constructing highways in India like Build Operate and Transfer (BOT) Annuity Model and BOT Toll Model.