NHAI’s Contract Models — EPC, BOT, HAM & TOT
Funding and risk-sharing frameworks for highway development in India
Flowchart — Choosing the Model
flowchart TD
A[Start: New NH Project] --> B{Is it operational (Brownfield)?}
B -- Yes --> TOT[TOT: Upfront fee, 30 yrs O&M and toll rights]
B -- No --> C{Traffic predictability?}
C -- High --> D[BOT (Toll): Private finances, toll risk on concessionaire]
C -- Medium --> E[HAM: Govt 40% during construction, 60% via annuities]
C -- Low --> F[EPC: 100% public funded, Design & Build contract]
D --> G[Transfer back at end of concession]
E --> G
F --> H[O&M by Authority]
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Quick Comparison
| Model | Funding | Who Builds | O&M | Revenue / Payment | Best Use |
|---|---|---|---|---|---|
| EPC | Authority (100%) | Contractor | Authority | — | Uncertain traffic / strategic |
| BOT (Toll) | Private | Concessionaire | Concessionaire | Toll revenue (traffic risk) | Predictable traffic |
| BOT (Annuity) | Private, reimbursed via annuities | Concessionaire | Concessionaire | Fixed annuities from Authority | Budget certainty |
| HAM | Govt ~40% + 60% annuities | Concessionaire | Concessionaire | Semi-annual annuities + O&M | Balanced risk |
| TOT | Investor upfront fee | — (Brownfield) | Concessionaire | Toll rights for ~30 yrs | Monetisation of assets |
Key Formulae
- Net Present Value (NPV): $$ \mathrm{NPV} = \sum_{t=0}^{T} \frac{CF_t}{(1+r)^t} $$
- Internal Rate of Return (IRR): $$ 0 = \sum_{t=0}^{T} \frac{CF_t}{(1+\mathrm{IRR})^t} $$
- HAM Annuity Payment: $$ A = P \cdot \frac{r}{1-(1+r)^{-n}} $$
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