Hybrid Annuity Model Gets Government Nod, Infra Stocks Gain

Mumbai: The government on Wednesday approved a hybrid annuity model for building roads to fast-track highway projects. The move is also expected to revive the PPP (public-private-partnership) mode and attract more investments in the sector.

Infrastructure stocks gained after the government move, with Jaiprakash Associates settling 0.77 per cent higher, while Hindustan Construction Company ended the day up 2.21 per cent on the BSE.

Similarly, IRB Infrastructure closed 0.53 per cent up while ARSS Infrastructure Projects finished up 0.97 per cent.

Under the hybrid annuity model, the government will provide 40 per cent of project cost to the developer to start work while the remaining investment has to be made by the developer.

"Adopting such a model for projects not found viable on BOT (Toll) mode, shall be more effective in terms of maximising the quantum of kilometers implemented within the available financial resources of the Government," a statement from the Ministry of Road Transport and Highways said.

The main objective of the approval is to revive highway projects in the country by making one more mode of delivery of highway projects, it added.