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Box: 1-Models of Public Private Partnership (PPP) under NHDP
PPP is a contractual agreement between a public agency and a private sector
entity. Through this agreement the skills and assets of each sector are shared in
delivering a service/facility. Besides, each party shares in the risks and rewards
potential in the delivery of the service/facility.
BOT – Toll Based
• The Department gives land free from encumbrances to the
Concessionaire.
• The Concessionaire constructs the road and other facilities.
• The Department pays grant/subsidy (viability gap) to the Concessionaire
if required.
• The Concessionaire maintains the road for the Concession period (15-20
years, in general; maximum period upto 30 years).
• The Concessionaire collects and retains fee (Toll) collected from the road
users.
• The Concessionaire hands over the project including all the facilities on
the expiry of the concession period.
BOT – Annuity Based
• The Department gives land free from encumbrances to the
Concessionaire.
• The Concessionaire constructs the road and other facilities.
• The Department collects and retains fee (Toll) collected from the road
users.
• The Department pays Annuity (annually or biannually) to the
Concessionaire.
• The Concessionaire maintains the road for the Concession period.
• The Concessionaire hands over the project and facilities on the expiry of
the concession period.
BOT – SPV (Toll Based)
• The Department and the Concessionaire and other stake holders form
Special Purpose Vehicle Company (SPV) to undertake construction and
operation of a road project.
• The SPV invests equity and borrows money for implementation of the
project.
• The Department gives land free from encumbrances to the SPV.
• The SPV constructs the road and other facilities.
• The SPV maintains the road during the concession period.
• The Department pays grant/subsidy to the SPV.
• The SPV collects and retains fee (Toll) collected from the road users
during operation.
• The SPV hands over the project including other facilities to the
Department on completion of the concession period.
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