NEW DELHI: After reviving highway projects with newer hybrid annuity mode (HAM), the model is being used for sewage treatments plants aimed at checking pollution and cleaning Ganga with approval to 16 such projects, Union Minister Nitin Gadkari said Monday.
In order to fast-track highway projects, revive the public-private-partnership (PPP) mode and attract more investments to the sector, the government had approved HAM under which it provides 40 per cent of the project cost to the developer to start work while the remaining investment is made by the developer.
These 16 projects are in addition to three HAM projects at Varanasi, Haridwar and Mathura where work has already commenced.
"To address pollution issues and to fast-track Ganga cleaning programmes, we have approved 16 STP projects in Uttar Pradesh, Bihar and West Bengal," River Development and Ganga Rejuvenation Minister Gadkari told PTI.
Gadkari said of these six are in Uttar Pradesh, three in Bihar and seven in West Bengal.
These are in addition to three plants at Varanasi, Haridwar and Mathura to treat 200 MLD (million litre per day) on a cumulative basis.
The projects approved now are for about 725 MLD capacity, he said.
Under hybrid annuity mode (HAM), 40 per cent of the capital cost is paid during construction period and balance 60 per cent is paid as quarterly annuity, over a period of 15 years linked with STP performance.
An official said that linking the payment with STP performance has resulted in better implementation by the developers and was resulting in good quality of work.
The projects earlier were implemented through DBOT (design, build, operate and transfer) or EPC (engineering, procurement and construction) mode with 5 years of operation and maintenance.
In these projects there were issues of sub optimal design and lack of proper operation and maintenance issues as there was no effective mechanism for linking the payment to operation and maintenance.
HAM has already become the preferred contract for the National Highways Authority of India (NHAI) in just three years of launch, rising from less than 10 per cent (Rs 7,700 crore) of awards in fiscal 2016 to nearly 50 per cent (Rs 76,500 crore) in fiscal 2018.
A rating agency has recently said that going forward too, HAM projects are expected to be constitute 60 per cent of the projects awarded by NHAI.