HYBRID ANNUITY MODEL ASSIGNMENT SOLUTION

INTRODUCTION

BACKGROUND

India, being one of the fast growing economists in the world, has to depend on the improvement and expansion of its road infrastructure to sustain its growth. The NHDP is a program to upgrade, rehabilitate and widen major highways in india to a higher standards. As governments, particularly in those developing countries, usually find it difficult to provide sufficient capital for public infrastructure development, the BOT contract is widely used to attract private capital to assist in developing public infrastructure. The projects in the NHDP program are thus of BOT type. It is observed that they were many issues in the tendering process which resulted in slow progress of the NHDP program. The tendering and bidding process of the BOT contract thus becomes very vital stage.

In this thesis an attempt has been made to study the RFP&RFQ document in detail& to analyze the changes that have been taken place in the tendering process. Our major interest is to analyze the B.K.Chaturvedi committee report which were prepared for recommending ways to accelerate developments of highways in the country and thus has increased the number of award of contract and bidders also we have attempted to analyze the impact of B.K.Chaturveedi recommendations on HYBRID ANNUITY model and its current progress of NHDP. This move has definitely helped the government to move a step closer of achieving its target of building 20 kilometers of road per day.

OBJECTIVES

To study the NHAI structure & NHDP program.
To study the different PPP models used by NHAI for highway development
To analyze B.K.Chaturvedi committee report
To study the impact of progress of NHDP after B.K.C.C Recommendations

To critically analysis the problems encountered and the evolution of HYBRID ANNUITY MODEL.

1.3METHODOLOGY OF STUDY

The methodology for completion of the study includes the analysis of the fallowing aspects

Detailed literature survey
Overview of NHs and the industry structure along with the introduction to PPP
Impact of B.K.Chaturvedi report on award of contracts
Analysis of statistics regarding award of contracts- Pre -BKCC& Post –BKCC
Analysis of hybrid annuity model
Observations and recommendations
Final report writing

HISTORICAL DEVELOPMENT OF NHAI

The National Highways Authority of India (NHAI) is an autonomous agency of the Government of India, responsible for management of a network of over 70,000 km of National Highways in India. It is a nodal agency of the Ministry of Road Transport and Highways.

Creation of National Highways Authority of India:

National Highways Authority of India (NHAI) was constituted by an Act. of Parliament, namely the National Highways Authority of India Act , 1988, to develop, maintain and manage the National Highways vested or entrusted to it by the Central Government. It became operational in February, 1995.

Organizational Set up

The Authority consists of Chairman and not more than five full time Members [One Member (Admn.), One Member (Finance) and three Members (Technical)] and four part time Members [namely Secretary Department of Road Transport & Highways, Director General (Road Development), Secretary Planning and Secretary Expenditure].

The Authority has Technical, Finance and Administrative wings at Headquarters. At present the Authority has 76 Project Implementation / Corridor Management Units headed by a Project Director and supported by technical and finance officers / staff.

Functions of the Authority

The Authority is mandated to develop, maintain and manage the national highways and any other highways vested in, or entrusted to, it by the Government.

The Authority may, for the discharge of its functions:

Survey, develop, maintain and manage highways vested in , or entrusted tit;
construct offices, or workshops and establish and maintain hotels, motels, restaurants and rest rooms at or near the highways vested in , or entrusted to, it;
Construct residential buildings and townships for its employees
Regulate and control the plying of vehicles on the highways vested in, or entrusted to, it for the proper management thereof
Develop and provide consultancy and construction services in India and abroad and carry on research activities in relation to the development, maintenance and management of highways or any facilities thereat;
Provide such facilities and amenities for the users of the highways vested in, or entrusted to, it as are, in the opinion of the Authority, necessary for the smooth flow of traffic on such highways;
Form one or more companies under the Companies Act, 1956 ( 1 of 1956) to further the efficient discharge of the functions imposed on it by this Act;
engage, or entrust any of its functions to, any person on such terms and conditions as may be prescribed;
Advise the Central Government on matters relating to highways;
assist, on such terms and conditions as may be mutually agreed upon, any State Government in the formulation and implementation of schemes for highway development;
Collect fees on behalf of the Central Government for services or benefits rendered under section 7 of the National Highways Act, 1956 ( 48 of 1956) , as amended from time to time, and such other fees on behalf of the State Governments on such terms and conditions as may be specified by such State Government; and
Take all such steps as may be necessary or convenient for, or may be incidental to, the exercise of any power or the discharge of any function conferred or imposed on it by this Act.

ROAD NETWORK IN INDIA:

Gross Domestic Product (GDP). Road transport has emerged as the dominant segment in India’s transportation sector with a share of 5.4 per cent in India’s GDP. Road transport demand is expected to grow by around 10% per annum in the backdrop of a targeted annual GDP growth of 9% during the Eleventh Five Year Plan. The road network can be broadly classified into five broad categories:

(1) Expressway

(2) National Highways (NHs)

(3) State Highways (SHs)

(4) Other Roads and

(5) Rural Roads

National Highways comprise less than 2 per cent of the road network, but carry 40 percent of the road-based traffic. State Highways (SHs) and Major District Roads (MDRs) constitute the secondary system of road transportation in the country. The State Highways connect National Highways, district headquarters, important towns, tourist locations and minor ports. About 61% of the total road length in India is accounted for by rural roads. The decadal figures of the road network under all

these categories are provided in the Table As would be seen from the table, the aggregate length of roads, which was 0.4 million km in 1950-51 has increased more than 10 fold to 4.24 million km by 2009-10.