According to the rating agency Moody’s study, the Hybrid Annuity Model (HAM) triggered a significant increase in projects award and the model accounted for around 46% of total awards in terms of highway length and 63% in terms of total value worth ₹765 billion in the last fiscal. As a matter of fact, the Union government's thrust on awarding highway projects based on HAM has rekindled private developers' interest in the sector after private investment in PPP highway projects had declined. But the government's introduction of the hybrid annuity model (HAM) in 2016 - as a variation of PPPs - has triggered new investment inflows, said Moody's Vice President and Senior Analyst, Abhishek Tyagi, elaborating that other sectors, such as ports, shipping and railways, are also looking at adopting the PPP framework in order to attract private investment. The PPP model was adapted to India's highways sector in a way which, relative to more traditional PPPs, rebalances certain project risks between the public and private sectors. In addition, the government provides funding during the construction phase, thus addressing some of the key concerns of the earlier model, the report observed. Factually, the government pumps in 40% of the equity in the project and the remaining funds are arranged by the concessionaire. The report also observed that private-sector participation in the traditional Indian PPP models such as build-operate-transfer (BOT) toll and BOT-annuity remained muted prompting the government to introduce new model.
