Govt's road annuity liability still more than thrice the project cost

Liability under the BOT annuity model will fall by a marginal one per cent in 2015-16

The liability of the government for 49 projects undertaken under the Build, Operate, Transfer (BOT) annuity model for road construction will fall by a marginal one per cent from Rs 98,228 crore in 2014-15 to Rs 97,154 crore in 2015-16.

The decline is primarily on account of fewer projects being given out this way. The overall liability, however, is still over three times the value of the total project cost (TPC) awarded under this mode so far. In these 49 projects, the  under the annuity model, the TPC is Rs 29,888 crore.

The BOT model is of two types, toll and annuity. Both entail construction from concessionaires (private companies). A BOT annuity involves fixed payments from the government to the company over a period. So, the concessionaire is not subject to a risk on traffic numbers. The toll model involves this risk.

The average annual annuity outgo in 2015-16 has also fallen by 1.3 per cent to Rs 6,236 crore from Rs 6,322 crore in 2014-15. BOT projects are awarded under the aegis of the National Highways Authority of India.

Of the 49 projects, 22, under phases I, II and III of the National Highways Development Programme, have been completed. The remaining 27 are in different stages of implementation and mostly belong to Phases III & IV of the NHDP. Six of the 27 are in Jammu & Kashmir and the northeast.

Under annuity, payments from the government start once the project is complete. Only a single project began operation in 2014 under this model. The highest number of annuity projects starting operations was in 2011, followed by 2012.