Hybrid annuity contracts in infrastructure have revived private sector participation with the number of projects awarded under this mode nearly equaling the Engineering-procurement-construction (EPC) deals.
Under EPC model private entity will bid for the tender and execute infra projects on behalf of government. The cost for executing the project would be borne by government and designing to the execution will be done by the private entity.
While the Hybrid annuity model is a modified application of BOT (Build, operate and transfer) model. Under it the government will contribute 40% to the project equity and substantial risk of the project is not transferred to the private sector but is borne by the government.
