UPSC Economy GS 3

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📍 V-BOT #Infrastructure 💡 There are instances in a BOT project where the contractor realizes the investment and profit ahead of the contract period, and there are cases where the contractor does not realize it even after the contract period is over. There should. thus be flexibility taking this variability into consideration. 💡 Under the variable build operate and transfer (V-BOT) model, if toll collection increases beyond the projection due to high traffic growth, the contractor will recover the cost before the quoted period and National Highways Authority of India (NHAI) will terminate the contract. 💡 NHAI will then collect toll. When that amount is recovered, toll will be cut. All such projects will compulsorily have 100 per cent electronic toll collection, installation of automatic traffic count, video image detection and other systems. If the collections are inadequate relative to investment and operation costs, the period of concession is extended. That is why it is called variable model of BOT. ➡️ JOIN AND SHARE - @upsc_economy_notes

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📍 BOT and BOOT #Infrastructure 💡 Build-operate-transfer (BOT) and build-own-operate-transfer (BOOT) are forms of project financing in which a private entity receives a project (concession) from the corporate or public sector to finance, design, construct, own, and operate (toll collection) a facility stated in the concession contract. 💡 This enables the concessionaire to recover investment for operating and maintenance expenses in the project. 💡 In BOOT, the concessionaire owns the project temporarily so that he can use it as collateral for raising capital for further investment. 💡 During the period of concession, the private party is entitled to retain all revenues generated by the project. The facility will then be transferred to government at the end of the concession agreement. ➡️ JOIN AND SHARE - @upsc_economy_notes

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📍 VIABILITY GAP FUNDING #Infrastructure 💡 Viability Gap Funding The VGF scheme aims to enhance the financial viability of infrastructure projects which do not have commercial viability, to be taken up by the private parties under the Scheme. Government gives a grant of up to 20 per cent of capital costs to PPP project of any central ministry, state government, statutory entity or local body, thus leveraging budgetary resources to access a larger pool of private capital. An additional grant of up to 20 per cent of project costs may be provided by the sponsoring ministry, state government or project authority. 💡 UDAN (Ude Desh ka Aam Naagrik) is an ambitious regional air connectivity scheme for which GOI set up a trust for disbursing viability gap funds to the participating airline companies. Airports Authority of India (AAI) is the nodal authority for the scheme, which aims to connect unserved as well as underserved airports and make flying affordable for the masses. ➡️ JOIN AND SHARE - @upsc_economy_notes

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