Comparative Study of Prospective PPP Models for Highway Projects of India

Infrastructure is necessary for any development, and for development, finance is required. Therefore, the government introduced the public–private partnership in infrastructure development to fulfill the need for finance. Generally, in India, three basic models, namely EPC, BOT (toll), and BOT (annuity), are adopted to fulfill infrastructure needs using private investment. As a result, they will get a good return on investment. However, due to specific terms and conditions of finance and a few government loopholes, the private firms interest is declining in PPP infrastructure development, particularly in the road sector. Therefore, the government introduced a new model in January 2016, the Hybrid Annuity Model (HAM), in the road sector, combining EPC and BOT (annuity). In the present study, a financial study has been carried out for three different PPP models for a case study of Porbandar-Dwarka. HAM is the best suitable model for a financial return on investment and the development of new infrastructure in low traffic, a region having only religious and social importance.