Q. The Hybrid Annuity Model (HAM) is a type of Public-Private Partnership (PPP) model used for infrastructure development in India. Which one of the following is the main feature that distinguishes HAM from other PPP models?

[A] The project construction and funding are entirely the responsibility of private enterprises.

[B] The government takes over the project after construction and collects tolls or user fees.

[C] The government and private partner share the costs and responsibilities of the project.

[D] The project is entirely financed by the government, with private companies only involved in construction.

Answer: C
Notes:

Explanation – In the HAM model, the government and the private partner each bear a portion of the project cost, typically 40% and 60%, respectively. The private partner is responsible for the construction and maintenance of the project for a specified period, usually around 15 years. During the operations period, the government collects tolls or user fees and pays a fixed annuity to the private partner, sharing both the financial burden and revenue generated by the project. This model aims to balance the risks and rewards between the public and private sectors while ensuring the successful development and maintenance of infrastructure projects.

Source: The Hindu

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