Hybrid-annuity contracts in infrastructure have revived private sector participation, with the number of projects awarded during the last financial year under this mode nearly equalling the EPC (engineering-procurement-construction) deals.
Some experts say that the EPC mode of highway construction is a better option than the hybrid annuity one because the government can raise funds for these contracts at a much lower rate than a private company.
For instance, the Union government or the National Highways Authority of India (NHAI) can raise funds at 8 per cent while the rate of interest for a private company, executing a hybrid-annuity highway contract, is about