Chhattisgarh to adopt annuity model for road construction

Chhattisgarh would adopt the proposed new model of road development by executing the projects through the annuity model in the state.

"In next four years, Chhattisgarh government had planned to construction roads with an estimated cost of Rs 20,000 crore through the annuity model," Chief Minister Raman Singh said. The new model that covered the revenue uncertainty of the developers had been proposed by the ministry of road transport and highways.

The annuity model would help the developers from recovering the risk of revenue uncertainty arising from inaccurate traffic projections. It would also divide the financial burden between the developer and the government. The developer would contribute just 60 per cent of the total project cost while the remaining amount would be invested by the government.

The toll would be collected by the government authorities and would pay the developer annuity for recovering investment and interest costs besides fee for operations and maintenance. The model would be introduced for the first time in the state.