government pays to private
national highway authority on india pays a private player to develop a road network or to lay roads.
after given money the private player has no role in ownership of the road and collection of toll is done by government.
here private player has active role.
- build roads using its own financial arrangement then operation project and also maintaining the built road for a specified number of years, say up to 15 to 20 years.
- after operating for this number of years, then the build property road ownership will be transferred to government.
- they also collect toll from user or government pay to company as a yearly payment for number of years called annually payments.
BOT model has annual arrangements under bot model and toll collection arrangement is called as BOT toll.
In case of BOT toll raising revenue through toll because risk of developer where as incase of BOT annually the toll revenue is taken by government unlike toll player is payed by fixed annually.
mix of EFC and BOT models
the finance from government will be released in parts or installments and there are linked to completion of milestone.
once the projects completed government repay the financial investment.
so the revenue risk is not part of developers sides rather the risk is on the government.
these model gained recognition because it spreads the risk between developers and the government and it is reported that private sectore is more interested in PPP because of reduced revenue risked increased support from government.