Hybrid Annuity Model (HAM)
The hybrid annuity model (“HAM”) was introduced in January 2016 by the Government with an intent to share the financial risk with the developers, given that infrastructure projects are capital intensive in nature. In a HAM project, the Concessioning authority shares a portion of the total project cost during the construction phase. As a mix of EPC and annuity models, HAM provides an assured revenue in form of annuities, interest on reducing balance of completion cost (BCC) and O&M payments linked to inflation in the operational phase. Annuity payments eliminate the risk of income fluctuations resulting from changes in traffic volumes.