Investment model's in India UPSC

Investment model's in India

Types of investment models 

Build Operate and Transfer (BOT) Toll model:

• Under this model, a road developer constructs the road and he is allowed to recover his investment through toll collection. 
• There is no government payment to the developer as he earns his money invested from tolls. 

BOT Annuity Model: 

• A developer builds a highway, operates it for a specified duration and transfers it back to the government. 
• The government starts payment to the developer after the launch of commercial operation of the project. 

Engineering, Procurement and Construction (EPC) Model:

• Under this model, the cost is completely borne by the government. 
• Government invites bids for engineering knowledge from the private players. 
• Procurement of raw material and construction costs are met by the government. 
• The private sector’s participation is minimum and is limited to the provision of engineering expertise 

Hybrid Annuity Model (HAM)

• HAM is a mix of BOT Annuity and EPC models. 
• As per the design, the government will contribute to 40% of the project cost in the first five years through annual payments (annuity). 
• The remaining payment will be made on the basis of the assets created and the performance of the developer.