- EPC (Engineering, Procurement, and Construction):
- Government gives contract to private contractor to only build the road.
- Contractor is selected based on lowest cost tender.
- Private party builds and hands over to government.
- Government then maintains the road.
- Not a PPP model.
- HAM (Hybrid Annuity Model):
- A mix of Annuity and EPC model.
- 40% of bid project cost paid by government during construction (linked to physical progress).
- Remaining 60% paid annually by government after construction completion (during O&M period).
- Private partner bears construction and maintenance risks.
- Private partner only partly bears financing risk.
- It is a PPP model.
| Feature | EPC (Engineering, Procurement, Construction) | HAM (Hybrid Annuity Model) |
|---|---|---|
| Nature | Government-funded construction contract | Hybrid PPP model (mix of Annuity and EPC) |
| Funding | 100% by government | 40% by government during construction, 60% as annuity post-construction |
| Risk Bearing | Contractor bears construction risk; government bears O&M, traffic, financing risk | Private partner bears construction and maintenance risks; partly bears financing risk |
| O&M | Government maintains | Private partner operates and maintains |
| Revenue Source | Contractor gets fixed payment from government | Private partner gets fixed annuity payments from government |
| PPP Model? | No | Yes |