affordable housing on ppp - copy

8/2/2019 Affordable Housing on PPP - Copy

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1. INTRODUCTION

Home is where the heart is, and owning a house is a basic

human right. It is not only a luxury but also a necessity.

A strong economy causes an increase in the demand for housing; the

increased demand for housing drives real-estate prices and rentals

through the roof. And then affordable housing becomes completely

inaccessible. - William Baldwin

Indias cities need at least 25 millions more homes in year 2012,

according to report from McKinsey, a consultancy, and the Federation

of Indian Chambers of Commerce.

The reason for such a huge demand for housing is migration of mass

people from rural area towards urban area or cities for their livelihood.

Most of the persons who migrate belong to economically weaker

group, lower income group, and middle income group. Government

has recognized the need of owning a house and thus has formulated

the policy:-

AFFORDABLE HOUSING ON PUBLIC PRIVATE PARTNERSHIP

Affordable homes or affordable housing is set to encompass the low

budget houses by providing flats and apartments at a low cost. The

Government should also keep in mind that though flat is being made

available at a comparative lesser price, it should not lack in quality.


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RAJASTHAN

Total Population - 68,621,012*

Urban Population - 17,080,776*

Percentage of Urban Population - 24.89%*

(*Provisional figures of census of India 2011)

Projected total housing shortage in urban areas of Rajasthan by the

year 2021 is estimated to be 17.06 lacs Out of this more than 85%

shortage is likely to be in the category of EWS/LIG Housing. Therefore

shortage of affordable housing is emerging as a major challenge for

Government of Rajasthan.

JODHPUR

Total Population -36, 85,681*

Urban Population -12, 64,060*

Percentage of Urban Population -34.30%*

Proportion to Rajasthan Population -5.37% *


To meet the requirement of Affordable Housing in second largest city

of state (JODHPUR) for the urban population, the Government of

Rajasthan formulated the policy:-

AFFORDABLE HOUSING POLICY 2009MODEL NO. 2

The main objective of the policy is to provide Affordable houses to

EWS/LIG/MIG category of the urban society. Public PrivatePartnership(PPP) model is used for faster implement of the policy.

In this report I focused on the following points:-

1.Public Private Partnership (PPP).2.Affordable Housing.3.An Overview on Affordable Housing Policy 2009

Model No. 2.


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While its size and growth potential make India attractive as a market,

the most compelling reason for investors to be in India is that it

provides a high Return on Investment. India is a free market

democracy with a legal and regulatory framework that rewards free

enterprise, entrepreneurship and risk taking.

While the India growth story is often plugged as the saga of corporate

enterprise and innovation, the governments contribution to its making

remains largely unsung. Be it in the form of policy reforms or

development of infrastructure, the government, both at the central

and the state levels, has been working in tandem to make India the

second most attractive investment destination in the world. The state

governments have already embarked on a war path to make their

respective states investment friendly.

They are on a three-point agenda:

Providing basic infrastructure and encourage private sectorparticipation in infrastructure provision.

Providing policy stability to businesses to encourage investment andgrowth.

Creating employment opportunities by developing the services sector.Each state has its own strengths for the potential investor. While West

Bengal has surplus electricity, Tamil Nadu is considered one of the

most developed states in the country. The latter is also known for

having the fastest growth rate in software exports 700 per cent

from 1998 to 2001. Haryana, which has the fourth highest per capita

income in India, produces half of the cars and two-wheelers produced

in India, while Goas economy is based on tourism. Rajasthan turning

the fortune by rapid development in real state market and housing.


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3. PUBLIC PRIVATE PARTNERSHIP

3.1 Overview

Public Private Partnerships offer a unique and innovative method of

involving the private sector in the nation building activity and in

accelerating the delivery of public goods and services of high quality

through joint enterprises, without spreading the limited available

resources too thin. The Eleventh Five Year Plan has estimated that in

order to sustain the envisaged high annual growth rate, the

investments in the infrastructure sector will have to be of massive

proportions. It would be impossible for the public sector to meet such

huge commitments in view of its limited capability for additional

capital mobilization. The anticipated shortfall of at least 30 percent of

the estimated total plan requirements, which itself will be of a huge

magnitude will have to be met by seeking active private sector

involvement in the development of the infrastructure sector. Public

Private Partnership (PPP) will be an attractive option in meeting this

challenge.

Private sector participation in infrastructure development is not,

however, a simple matter. It requires a framework that can enable theprivate sector to secure a reasonable return at manageable risk,

assure the user of adequate service quality at an affordable cost, and

facilitate the Government in procuring value for public money. These

conditions are more difficult to fulfill than is commonly realized.

Because of multiple stakeholders pursuing conflicting interests, risk

mitigation arrangements are usually complex. Inadequate preparatory

work in relation to the framework for PPP projects, identification of

projects, selection of private participants, preparation of strategic planand project reports, drafting of contracts and other associated

activities will only lead to excessive transaction costs, years of delay in

project implementation, inadequate quality, and large contingent

liabilities to the Government. A project beset with such problems even

after completion can get enmeshed in a high cost low demand

syndrome.


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3.2 Definition Public Private Partnership

The Government of India defines PPPs as:

A partnership between a public sector entity (sponsoring authority)

and a private sector entity (a legal entity in which 51% or more of

equity is with the private partner/s) for the creation and/or

management of infrastructure for public purpose for a specified period

of time (concession period) on commercial terms and in which the

private partner has been procured through a transparent and open

procurement system. (Department of Economic Affairs, Ministry of

Finance, Government of India, 2007a)

"The Public-Private Partnership (PPP) Project means a project

based on contract or concession agreement between a

Government or statutory entity on the one side and a private

sector company on the other side, for delivering an

infrastructure service on payment of user charges."


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3.3 What is Public-Private Partnership (PPP)?

PPP is a broad term that can be applied to anything from a simple,

short term management contract (with or without investment

requirements) to a long-term contract that includes funding, planning,

building, operation, maintenance and divestiture. PPP arrangements

are useful for large projects that require highly-skilled workers and a

significant cash outlay to get started. They are also useful in countries

that require the state to legally own any infrastructure that serves the

public.

The public partners in a PPP are government entities, including

ministries, departments, municipalities, or state-owned enterprises.

The private partners can be local or international and may include

businesses or investors with technical or financial expertise relevant to

the project. Increasingly, PPPs may also include nongovernment

organizations (NGOs) and/or community-based organizations (CBOs)

who represent stakeholders directly affected by the project.

Effective PPPs recognize that the public and the private sectors each

have certain advantages, relative to the other, in performing specific

tasks. The government's contribution to a PPP may take the form of

capital for investment (available through tax revenue), a transfer of

assets, or other commitments or in-kind contributions that support the

partnership.

The government also provides social responsibility, environmental

awareness, local knowledge, and an ability to mobilize political

support. The private sector's role in the partnership is to make use of

its expertise in commerce, management, operations, and innovation

to run the business efficiently. The private partner may also contribute

investment capital depending on the form of contract. The structure of

the partnership should be designed to allocate risks to the partners

who are best able to manage those risks and thus minimize costs

while improving performance.


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In some types of PPP, the government uses tax revenue to provide

capital for investment, with operations run jointly with the private

sector or under contract. In other types (notably the private finance

initiative), capital investment is made by the private sector on the

strength of a contract with government to provide agreed services.

Government contributions to a PPP may also be in kind (notably the

transfer of existing assets). In projects that are aimed at creating

public goods like in the infrastructure sector, the government may

provide a capital subsidy in the form of a one-time grant, so as to

make it more attractive to the private investors. In some other cases,

the government may support the project by providing revenue

subsidies, including tax breaks or by providing guaranteed annual

revenues for a fixed period.


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Typically, a private sector consortium forms a special company called

a special purpose vehicle (SPV) to develop, build, maintain and

operate the asset for the contracted period. In cases where the

government has invested in the project, it is typically (but not always)

allotted an equity share in the SPV. The consortium is usually made up

of a building contractor, a maintenance company and bank lender(s).

It is the SPV that signs the contract with the government and with

subcontractors to build the facility and then maintain it. In the

infrastructure sector, complex arrangements and contracts that

guarantee and secure the cash flows, make PPP projects prime

candidates for Project financing. A typical PPP example would be a

hospital building financed and constructed by a private developer and

then leased to the hospital authority. The private developer then acts

as landlord, providing housekeeping and other non medical services

while the hospital itself provides medical services.

PPPs can only be mainstreamed by continuous response to the varying

goal of people and economy in general. The boundary domains of PPPs

should be increased in order to prosper the infrastructure

development of India.

Government of Indias globalmanufacturing & trading hub, issupported by world classinfrastructure through PublicPrivate Partnership. DMIC* is

reported to have IntegratedIndustrial Areas & InvestmentRegions developed from 2008 to2016. Mott MacDonald is workingwith Gujarat state on this projectpreparing reports for Bharuch-Dahej Investment Region andVadodara Ankleshwar &Palanpur Mehsana Industrialareas.

Example of Public Private Partnership *Delhi Mumbai Industrial Corridor (DMIC).


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3.4 Why Public-Private Partnership (PPP)

Sufficient instruments as well as the ability to undertake long-termequity cannot be provided by the market in the present financial

scenario. Also financial liability required by infrastructure projectswould not be sufficed.

Most sectors face a lot of hindrance in enabling a regulatoryframework as well as a consolidated policy. So its important to

convert such policies into PPP friendly. To achieve the desires results,

active participation of various state projects are essential.

Lack of ability of private sectors to fit into the risk of investing indiversified projects also needs to be overcome. Modernization of new

airports, transmission systems and building power generating plants

are some of the avenues which required skilled manpower.

Ability of public institutions to manage the PPP process should alsobe subdued. Maximizing the return of the stakeholders needs to be

managed due to the involvement of long term deals including the life

cycle of the asset infrastructure.

Lack of credibility of bankable infrastructure projects used forfinancing the private sector should also be overcome. Inconsistency is

still visible in the limitations of PPP projects, despite of continued

initiatives by States and Central ministries.

Inadequate support to enable greater acceptance of PPPs by thestakeholders forms another source of constraint.


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3.5 Public-Private Partnership (PPP) Types

1. Built, Operate and Transfer (BOT)

Under this category, the private partner is responsible to design,

build, operate (during the contracted period) and transfer back thefacility to the public sector. The private sector partner is expected to

bring the finance for the project and take the responsibility to

construct and maintain it. The public sector will either pay a rent for

using the facility or allow it to collect revenue from the users. The

national highway projects contracted out by NHAI* under PPP mode

is an example. (*NHAI National Highway Authority of India)

2. Lease, Operate and Transfer (LOT)

As the name indicates, under this type of PPPs, a facility which

already exists and is under operation, is entrusted to the private

sector partner for efficient operation, subject to the terms and

conditions decided by mutual agreement. The contract will be for a

given but sufficiently long period and the asset will be transferred

back to the government at the end of the contract. Leasing a school

building or a hospital to the private sector along with the staff and allfacilities by entrusting the management and control, subject to pre-

determined conditions could come under this category.

3. Built, Own, Operate (BOO)

This is a variation of the BOT model, except that the ownership of the

newly built facility will rest with the private party during the period of

contract. This will result in the transfer of most of the risks related toplanning, design, construction and operation of the project to the

private partner. The public sector partner will however contract to

purchase the goods and services produced by the project on

mutually agreed terms and conditions. However, the facility/project

built under PPP will be transferred back to the government

department or agency at the end of the contract period, generally at

the residual value and after the private partner recovers its

investment and reasonable return agreed to as per the contract.


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4. Design, Built, Finance and Operate (DBFO)

These are other variations of PPP and as the nomenclatures highlight,

the private party assumes the entire responsibility for the design,construct, finance, and operate or operate and maintain the project

for the period of concession. These are also referred to as

Concessions. The private participant to the project will recover its

investment and return on investments (ROI) through the concessions

granted or through annuity payments etc. It may be noted that most

of the project risks related to the design, financing and construction

would stand transferred to the private partner. The public sector may

provide guarantees to financing agencies, help with the acquisition ofland and assist to obtain statutory and environmental clearances and

approvals and also assure a reasonable return as per established

norms or industry practice etc., throughout the period of concession.

5. Operations Concession

This is a generic term, used to clarify the essential features of PPP

arrangements. The PPP agreements which authorize the privatepartner to recover its investments and expected returns on

investments through concessions granted for a certain period,

computed on the basis of demand projections and growth, and are

called operations concession (OC). In these cases, the public sector

which is responsible to provide the service to the public and collect

revenue by way of user charges, toll, tariff etc., assigns its legal or

statutory right to the private partner in return for the latter

undertaking the responsibility to implement the project and maintainthe required quality. The concession may be by collecting tolls and

user charges or by the public sector making periodical payments of

annuities or monthly/quarterly/half-yearly charges on certain

assumed basis, like shadow tolls etc.


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6. Joint Ventures

In a PPP arrangement commonly followed in our country (such as for

airport development), the private sector body is encouraged to form

a joint venture company (JVC) along with the participating publicsector agency with the latter holding only minority shares. The

private sector body will be responsible for the design; construction

and management of the operations targeted for the PPP and will also

bring in most of the investment requirements. The public sector

partners contribution will be by way of fixed assets at a pre-

determined value, whether it is land, buildings or facilities and /or it

may contribute to the shareholding capital. It may also provide

assurances and guarantees required by the private partner to raisefunds and to ensure smooth construction and operation. The public

service for which the joint venture is established will be provided by

the entity on certain pre-set conditions and subject to the required

quality parameters and specifications. Examples are international

airports (Hyderabad and Bangalore), ports etc.

Development of Roads through Public Private Partnership


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3.6 Main Features of PPPs:

1. Cooperative and contractual relationships:

PPPs represent cooperation between the government and the private

sector. PPPs are not the same as privatization in that both public

sponsors and private providers function as partners throughout project

development and delivery, and often in operation and maintenance.

The most successful partnership arrangements draw on the relative

strengths of both the public and private sector in order to establish

complementary relationships between them.PPP arrangements are

long-term in nature, typically extending over a 15 to 30 year period.This is a factor which helps to which establish productive and lasting

relations between the public and private sectors. Demonstrating an

enduring public sector commitment to the provision of quality services

to consumers, under terms and conditions agreeable to both the

government and the private sector, PPPs are used to develop and

operate public utilities and infrastructure. These collaborative ventures

are built around the expertise and capacity of the project partners and

are based on a contractual agreement, which ensures appropriate andmutually agreed allocation of resources, risks, and returns

2. Shared responsibilities:

While the specific responsibilities for delivery will vary according to

each project, a key feature of PPPs is that these responsibilities will be

shared between the public body and the private consortium. In some

initiatives, this might require the private sector company to play a

significant role in all aspects of delivery of the service, while in others

its functions may be more limited. However, unlike instances of

privatization, the overall role of government remains unchanged in a

PPP: it is the government which remains ultimately accountable and

responsible for the provision of high quality services that meet the

public need.


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3. A method of procurement:

PPPs are instruments for government bodies to deliver desired

outcomes to the public sector, by making use of private sector capital

to finance the necessary assets or infrastructure. The private companyis rewarded for its investment in the form of either service charges

from the public body, revenues from the project, or a combination of

the two. This renders affordable those projects that might not

otherwise have been feasible, because the public body was unwilling

or unable to borrow the requisite capital. PPPs allow the private sector

to play a greater role in the planning, finance, design, operation and

maintenance of public infrastructure and services than under

traditional public procurement models. Moreover, where traditionalprocurement models begin with the question of what assets the public

body has as its disposal and how these might be used to deliver

required services, PPP arrangements place the emphasis on the

desired service or outcome as identified by the public organization and

how the private sector might help to make this happen.

4. Risk Transfer:

A key element of PPPs is their potential to deliver public projects and

services in a more economically efficient manner. At the beginning of

the relationship, potential risks associated with the project are

identified and each party adopts those which it is best equipped to

manage.

The public sector can therefore transfer appropriate risks to the

private partner, who has the necessary skills and experience to

manage them.For example, overall risk to the public sector can be reduced by

transferring those associated with design, construction and operation

to the private partner. The incentive for the private body comes in the

form of higher rates of return related to high standards of

performance.


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5. Flexible Ownership:

PPPs enable flexible arrangements between public and private bodies,

where the public body may or may not retain ownership of the projector facility that is produced. In some cases, the private organization

may be contracted only to construct facilities or supply equipment,

leaving the public body as owners, operators and maintainers of the

service. Alternatively, the public sector may decide it is more cost-

effective not to own directly and operate assets, but to purchase these

instead from the private entity. Services may be purchased for use by

the government itself, as an input to provide another service, or on

behalf of the end user.

Fast Growth in Agriculture Sector by Implementing PPP

Public

Private

Partnership

PPP


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3.7 Strengths & Weaknesses of PPP

A. Strengths:The major strength of PPPs is their ability to deliver value for money in

public service procurement and operation. By utilizing the differing

skills, resources and experience of each party, they allow the publicand private sectors to complement each other the public sector

provides its expertise in identifying public needs, service requirements

and desired outcomes, and the private sector brings its capacity to

effectively utilize assets and manage the construction and operation of

services.

1.Benefits to the public sector:The foremost benefit of PPPs, alluded to above, is the scope such

partnerships allow for public authorities to raise capital for high

priority works that might otherwise not be possible in the face of

budgetary and borrowing constraints. Here, PPPs can draw on private

sector expertise in order to deliver services and infrastructure

efficiently and cost-effectively, and to bridge the gap between the

resources required and those available from the public purse.

Gains in efficiency and effectiveness can be realized in a number ofways. Most importantly, the PPP approach encourages private sector

innovation by allowing government to delegate responsibility for

service design and construction to the private contractor. This enables

the public body to identify desired services, outcomes and outputs,

while allowing room for the private contractor to innovate in the

search for the most appropriate solution to meet those requirements.

Additionally, PPPs can enable the optimum allocation of public

resources in the pursuit of infrastructural development. Whereastraditional models of public procurement focus on achieving the lowest

upfront costs in delivering infrastructural projects PPPs concentrate on

delivering cost effectiveness over the duration of the asset including,

in particular, those costs associated with operation and ongoing

maintenance. This allows the public sector to realize value for money

for the entire life of the project or service, rather than just in its initial

construction phase.


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2.Benefits to the private sector:Engaging in PPPs offers private sector companies a wide range of

business opportunities that were previously confined to public

agencies. Given the long term nature of these relationships,undertaking work under PPP arrangements provides a stable

foundation for the growth of the business. In addition, PPP

arrangements encourage the private sector to engage in a broader

spectrum of activities, throwing open the possibility of designing and

delivering innovative solutions, rather than merely constructing assets

to existing standards and designs.

3.Benefits to the public:By combining the skills and expertise of public and private partners,

PPPs are able to provide services which meet the needs of the public

in a more efficient and cost-effective manner. When appropriately

designed and implemented, PPPs can yield better quality services

without compromising public policy objectives or broader public need.

At the outset of the PPP relationship, the desired quality of service to

be achieved from the development of the infrastructural asset isclearly specified, and the expectation is that high standards will be

maintained throughout the duration of the project. This contrasts with

traditional procurement methods, where the construction of assets is

formally separated from operation and maintenance, and

consequently, levels of service and conditions of assets will frequently

decline over time.

Development of country through Public Private Partnership


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B.Weaknesses (and risks):PPPs, like conventional service delivery mechanisms, also have

disadvantages and drawbacks. In order to minimize or eliminate

these, it is vital that public sector managers recognize and understandthem in order to better address problems as they arise, through

careful contractual arrangements and negotiations.

1.There is the possibility that the public sector may lose managerialcontrol of its services. Under PPPs, the management of outputs is

transferred to the private sector, meaning that the public sector has

very limited ability to intervene, as long as services are being

delivered. The public body has no day-to-day control over themanagement of the project and is reduced in its capacity to change

the project or cooperate with wider public sector services, and indeed

may not be able to make use of its own expertise in the area.

2.The process of PPP procurement can be time consuming andexpensive. In order for a PPP to be successfully realized, it is vital that

before bidding starts, a detailed, clearly structured project appraisal

and specification of desired outputs is drawn up. Although this isimportant to the development of projects that are affordable and

provide value for money, it has the potential to make procurement a

lengthy and costly procedure.

3.There is the problem of the higher cost of finance in the privatesector. The weighted cost of finance in the private sector, including

both debt and equity, is typically between 1% and 3% higher than the

public sectors cost of debt on a non- risk adjusted basis. This has theeffect of increasing the overall cost of PPP in comparison to traditional

procurement methods, unless this can be offset by the increased cost

efficiencies that the private sector should deliver.


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4.PPPs can sometimes prove to be rather inflexible instruments especially given the long term nature of most PPP contracts. While

there can be significant financial benefits in setting rigidly defined

output specifications for the life of the PPP, these should be weighedagainst the inflexibility this inevitably brings. Under PPP

arrangements, there is limited potential for modifying services or

flexible spending. Certain sectors of service provision may require a

much greater degree of flexibility and in these cases, an approach

which makes use of long-term rigid specifications of outputs may

prove difficult or counterproductive.

5.In some areas of public service provision there may be greaterpublic demand for accountability and responsiveness than in others.

This may give rise to public criticism or even hostility towards PPP

arrangements. Moreover, under PPP arrangements, lines of

accountability can be less straightforward (and transparent) than

under traditional methods of procurement where lines of

accountability (for example, to government ministers) are more direct

and immediate. In these circumstances, there may be a need for

greater government involvement in the relationship, to ensurecompliance and responsiveness to public concerns.


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4. NINE GLOBE INDUSTRIES PVT. LTD.

Registered OfficeNINE GLOBE INDUSTRIES PVT. LTD.A-402, Prathmesh Tower,

Raghuvansi Mill Compound,Senapati Bapat Marg,Mumbai 400 013 (India)Tel : (+91 22) 2494 5252Fax : (+91 22) 2496 5252Email: [email protected]

Corporate officeNINE GLOBE INDUSTRIES PVT. LTD.1st Floor ,113,Machar Tower

1st B Road SardarpuraJodhpur 342003 (India)Tel : (+91 291) 2645774

4.1 Company Overview

Nine Globe Industries Pvt. Ltd. is a customerdriven Indian

company with a reputation for innovation, quality, speed and flexibility

backed by three decade old rich experience and vision of its

promoters. Companys business is spread globally, but is principally

operated from and is located in India, one of the fastest growing large

economies in the world.

Nine Globe Industries Pvt. Ltd. is an exceptional diversified companywith a world class resource and product base and strong foothold in

the areas ofReal Estate, Mining, Metals and Exports.

Company believes in expertise and experience of global operations

will complement operations and expansion of its businesses in India

and will allow company to capitalize on attractive growth opportunities

arising from India's developing economy, relatively low cost of

operations and large and inexpensive labour and talent pools.
mailto:[email protected]:[email protected]


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Efforts are always on to identify new markets, varying customer/

country requirements, understand their social & cultural patterns,

develop and design new products to suit their specific requirements.

With these guiding principles Nine Globe is poised for an excitingjourney in this new millennium.

MissionMission is to aim for excellence in every field we enter and work in and

to create sustainable high growth businesses and win-win situations

for the company and our partners.

ValuesEntrepreneurship

We encourage an entrepreneurial spirit throughout our businesses and

value the ability to foresee business opportunities early in the cycle

and act on them swiftly. Our ability to translate an idea into reality

within the shortest possible timeframe is critical to our rapid growth

and diversification into new areas. People are our most important

asset and from day one we actively encourage them to seek newopportunities and pursue their goals.

Growth

We have pursued growth across all our businesses and into new

areas; always on the basis that value must be delivered. We do not

believe that we are the only beneficiary of our growth. We see growth

as a means to increase the wealth and prosperity of our society at

large.

Excellence

Achieving excellence in all that we do is our way of life. We

consistently deliver projects ahead of time at industry-leading costs

and within budget. Equally important to us is achieving benchmarks in

health, safety and environment standards. It is our people who make

all this possible. They benchmark our operations and identify

opportunities for continuous improvement and projects with highpotential.


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Integrity

Total honesty, transparency and accountability are virtues deeply

embedded in all our activities. These values have earned credibility

for the company and loyalty from its partners/clients.

TrustThe trust that our partners/clients place in us is key to our success.

We recognize that we must responsibly deliver on the promises we

make to earn that trust. We constantly strive to meet their

expectations of us and deliver ahead of expectations. We always

behave in a manner that is consistent and upholds our value system.

We take feedback seriously and act upon it. We continuously work to

improve ourselves and enhance our ability to deliver at all times. We

actively foster a culture of mutual trust in our interactions with ourstakeholders and encourage an open dialogue which ensures mutual

respect. We believe that this is part of being a good corporate citizen.

Team Spirit

None of us is as good as all of us together. When we work in synergy

complementing each other in a spirit of partnership, our strengths are

not added but multiplied resulting in optimum output.

Nine Globe Industries Pvt. Ltd. has a team of professionally

skilled workforce that ensures the highest standards of quality

and timely schedules to fulfill the need of global market.


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5. AFFORDABLE HOUSING INJODHPUR

Nine Globe Groups vision of Higher Focused Development extends toits social responsibilities, to society and the community at large to

create a better life for its brethren in society through this project of

providing mass and affordable housing to people of Jodhpur city. With

the nodal agency (Avas Vikas Ltd., Jaipur, Rajasthan) Nine Globe

Industries Pvt. Ltd. is coming with housing scheme of

EWS/LIG/MIG-A flats, Model No.2 in City Of Jodhpur, Rajasthan

on Public Private Partnership with Government of Rajasthan

under :-Affordable Housing Policy 2009 Model No. 2.

EWS/LIG/MIG-A flats (G+2/G+3 formats) are to be constructed on

minimum 52% of the Total Land. Built up EWS/LIG/MIG-A flats to be

handed over to nodal agency i.e. Avas Vikas Ltd. at predetermined

prices which in turn will be allotted to the eligible beneficiaries.

EWS Economically Weaker Section.

LIG Lower Income Group.

MIG - Middle Income Group.

G+2 - Ground Floor + 2 Floors.

G+3 - Ground Floor + 3 Floors.

Nine Globe takes pride in announcing the affordable housing scheme

(EWS, LIG, MIG-A) for the ones deprived of comfortable livelihood due

to the ever escalating cost of living. With the Governments

openhanded affirmative nod, the company is elated to fulfill not only

the dreams of the underprivileged but also to accomplish the

companys goal of working towards a more developed and disparity

free society. With the initiation in areas like SURPURA and

RALAWAS in Jodhpur, the companys idea is to soar high with

improvement in the infrastructure sector throughout India.


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AFFORDABLE HOUSING EWS/LIG/MIGJODHPUR, RAJASTHAN

(EWS Economically Weaker Section, LIG - Lower Income Group)

(MIG Middle Income Group)


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6. AFFORDABLE HOUSING

6.1 Overview

Right to adequate housing is a basic human right as shelter is a basic

human need. Provision of adequate housing is emerging as a major thrust

area for Government of India as well as the State Governments.Government of Rajasthan accords a very high priority to this task. With

all round increase in cost of land, building materials, labour and

infrastructure, affordable housing has become a distant dream for the

economically weaker and low income groups. Hence the role and

intervention of the State Government becomes all the more important.

Sustainable human development can not be achieved without adequate &

affordable housing. Affordable shelter for the masses or creation of

productive and responsive housing for all is not a simple technologicalissue or a mere problem of the finance. It is a complex amalgam of a host

of factors, which need to be tackled at all levels and in a synchronized

manner.

3-D view of affordable housing at Surpura, Jodhpur, Rajasthan

The goal to provide affordable housing to the needy has an economic and

social significance. Rajasthan has the largest area in the country which is

10.41% of the country's area. As per the 2011 census, urban population

in Rajasthan is 27.89%* whereas the national average is 29.78%*.



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At the National level total housing shortage in urban sector as estimated

in 2012 is 25 million*, out of which over 90 percent shortage is of

EWS/LIG housing. In Rajasthan total housing shortage in urban sector as

estimated in 2011 is 1.07 million, (10.70 lacs), out of which 86.73

percent (9.3. lacs) is in EWS/LIG category.

Due to rapid pace of urbanization, increasing rural to urban migration and

gap between demand and supply, there is a growing requirement for

shelter and related infrastructure in urban areas of Rajasthan. Projected

total housing shortage in urban areas of Rajasthan in the year, 2012,

2017 and 2021 is estimated to be 1.282 million, (12.82lacs) 1.494 million

(14.94 lacs) and 1.706 million, (17.06 lacs) respectively. Out of this more

than 85% shortage is likely to be in the category of EWS/LIG Housing.Therefore shortage of affordable housing is emerging as a major

challenge for the government and is sought to be tackled through a series

of measures and policy guidelines set down for this purpose.

"Affordable housing for all and integrated habitat development

with a view to ensure equitable supply of land, shelter and services at

affordable prices in Rajasthan, with special focus on urban poor and

excluded groups of society".

In JODHPUR affordable housing is developed by Nine Globe

Industries Pvt. Ltd. and Government of Rajasthan on Public

Private Partnership.

The affordable housing scheme (EWS, LIG, MIG-A) for the ones deprived

of comfortable livelihood due to the ever escalating cost of living.

Affordable housing is developed at two sites in jodhpur:-

1. SURPURA2. RALAWAS

(*report from McKinsey, a consultancy, and the Federation of Indian

Chambers of Commerce)


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6.2 DEFINITION OF AFFORDABLE HOUSES

Keeping in mind that the housing shortages affect mostly the EWS

and LIG, and the younger group of urban-urban migrants changing cities

in search of better prospects, affordable houses, for the purpose of this

scheme, may be taken as houses ranging from about 300 square feet

(super built up area) for EWS, 500 square feet for LIG and 600 square

feet to 1200 square feet for MIG, at costs that permit repayment of

home loans in monthly installments not exceeding 30% to 40% of

the monthly income of the buyer. In terms of carpet area, an

EWS category house would be taken as having a minimum 25

square meters of carpet area and the carpet area of an LIG category

house would be limited to a maximum of 48 square meters. The

carpet area of an MIG house would be limited to a maximum of 80

square meters.

(According to Government of India Ministry of Housing & Urban Poverty

Alleviation)


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7.AFFORDABLE HOUSING POLICY 2009MODEL NO. 2

PRIVATE DEVELOPER ON PRIVATE LAND

(WITH INCENTIVES TO OFFSET LAND COST FOR EWS/LIG)

(i) Minimum 40% (maximum up to 100% of land area) land to

be earmarked for EWS/LIG & remaining land allowed for

MIG/HIG/commercial purposes

Under this model selected developers would take up construction work

of EWS/LIG houses/flats on minimum 40% of land under the project.

Out of the total EWS/LIG houses/flats, minimum 50% would be EWS

and balance could be LIG houses/flats. On the balance land the

developer would be allowed to construct MIG-A, MIG-B, HIG

houses/flats and 10% of this portion of the land would be permitted to

be used for commercial purpose.

The total built up EWS/LIG houses/flats will be handed over to the

nodal agency at pre-determined prices for allotment to the eligibleapplicants. On the balance land area with the developer, he will be

required to construct at least 20% (treating balance MIG& HIGH area

as 100%) of the area for MIG-A houses. The remaining area could be

used for MIG-B/HIGH/commercial purposes. The developer will be free

to sell the balance area on which MIG-A/MIG-B/ HIG/commercial

houses/flats are constructed, as per his choice. However for the MIG-

A category also applications would be invited by the nodal agency and

allotments made accordingly, at the sale price worked out jointly bythe developer & nodal agency.

EWS/LIG flats should be in the G+3 format(G+2 may also be allowed

in certain cases) while the MIG-A, MIG-B & HIG-H flats can be

constructed up to any height as per prevailing building regulations in

the town/city.

(EWS Economically Weaker Section, LIG - Lower Income Group)(MIG Middle Income Group, HIG Higher Income Group)


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(ii) Land use analysis

Roads -20 to 25%

Parks -10%

Amenities -10 to 15%

Ground Coverage

Residential

Maximum 50% for EWS/LIG plot area and 35% for

MIG/HIG/Commercial.

Commercial

5% additional (5% of minimum 40% reserved for EWS/LIG) in

EWS/LIG Plot area (10% in MIG/HIG Plot area which will be part of35% ground coverage allowed), in no case the overall commercial

area shall exceed 10% of total plot area.

(iii) Commercial area will be disposed off by developer and amenities

will be developed by him at his own level or with the involvement of

other agencies.

NotesA.The power to relax any of the norms mentioned above shall vest with

the State Government / Empowered committee.

B.The sides/rear setbacks on EWS/LIG plot area can be relaxed up tominimum 3.0 m by the local authority to achieve 50% ground

coverage.

C.Parking norms can also be relaxed suitably to achieve 50% GroundCoverage

(iv) Time allowed for completion of the project.

Time allowed for completion of the project would be as follows:-

EWS/LIG houses/flats 200 nos. - 01 year

EWS/LIG houses/flats 400 nos. - 02 years

EWS/LIG houses/flats 600 nos. & above - 03 years

(EWS Economically Weaker Section, LIG - Lower Income Group)

(MIG Middle Income Group, HIG Higher Income Group)


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(v) Additional FAR (Floor Area Ratio) to be allowed

For the minimum 40% (maximum up to 100% of land area) of land to

be utilized for EWS/LIG categories of houses/flats. The land and

development cost is to be taken as zero, therefore additional FAR

(double of the normal FAR for the area) would be allowed.

If EWS/LIG flats are constructed by developer on the minimum 40%

of total built up area (as per permissible FAR) he will get double of the

normal FAR on the full land of the scheme.

For example

If the plot area of the scheme is 10.0 acres, minimum 40% of the plot area i.e. 4.0

acres is to be reserved for construction of EWS/LIG category of flats & on this 4.0

acres of land, minimum 40% of the total permissible built up area (as per normal

permissible FAR) is to be constructed by the developer.

This built up area of EWS/LIG flats will be handed over to the nodal agency on

predetermined prices & in lieu of this the developer will get additional FAR

equivalent to normal FAR on the complete land area in addition to the already

permissible normal FAR, thus he gets double of the normal FAR on the complete

land area of 10.0 acres.

This additional FAR, if unutilized on the same project land, would be given in the

form of TDR, to be allowed in other parts of the town as per norms and guidelines

fixed in this regard.

(vi) Use of Transferable Development Rights (TDR) as a result

of additional FAR:-

Efforts should be made by developer to consume maximum FAR

(including additional FAR) on the same project land. If he is unable to

do so balance/unutilized FAR will be allowed to him in the form of

TDR, under separate guide lines approved by the State Government in

this regard, use of TDR will be allowed after successful completion of

the project. Allowable TDR should normally be in the same

sector/area/zone of master plan having more or less equivalent value

of land. However in case this is not feasible TDR will be allowed to be

transferred to other areas as per norms to be issued in this regard.

TDR certificate issued may be utilized or transferred by the developer.


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9. PROCEDURE AND GENERAL

GUIDELINES

9.1. Eligibility for Developers:-

Any developer fulfilling the following criteria will be eligible to apply under

various models.

Has experience in building construction works for at least threeyears and should have a good track record of quality

construction works.

Total net worth (Reserve & Capital) of last three years (of thecompany or its sister concern or consortium) should beequivalent to at least 10% of the project cost (excluding land

cost) i.e. cost of proposed EWS/LIG houses.

For applying under model no.2, the developer should hold atleast 5.0 acres of land in the concerned town.

The developer should have executed minimum 2.0 acres ofResidential or other type of Development in a single project

during the last 3 years. (As a developer or builder or as

construction agency) Joint venture or Special Purpose Vehicle by private developers

will also be eligible under the Policy.

9.2 Eligibility for Beneficiaries/Applicants:-

As per the criteria laid down by Government of India the monthly income

of applicant should be as follows:-


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10. ROLE OF AVAS VIKAS LIMITED-

THE NODAL AGENCY

(EOI Expression of Interest, AVL Avas Vikas Limited)(ULB- Urban Local Bodies)


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(QC Quality Control)

AVAS VIKAS LIMITEDA Company of Rajasthan Housing Board

(A Statutory Body under Rajasthan Sate Act No. 4 of 1970)


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11. FLOW CHART

(For Processing and approval of proposals by Developer)

(EOI Expression of Interest)(AVL Avas Vikas Limited)


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12.CONCLUSION

INDIA ,one of the five largest economies of the world with growth rate

of about 8 % for next year ,the total population of India is about

1,210,190,422*out of which 377,105,760* lives in urban areas i.e.

31.17%*.

The need for housing is about 45 million for next 5 years, to meet the

demand of housing Government initiates different policies and

schemes but the demand is very high and to fulfill such a high

demand is a very difficult task. Affordable Housing is one of the

solutions to this problem.

By using Public Private Partnership (PPP) platform we can build houses

under Affordable Housing Policies, since it is a joint venture between

private firms and Government, things really work very fast and come

into reality from paper work.

The basic aim of this policy is to provide stimulus economic activities

through affordable housing programmes in partnership. Its immediate

effect is having employment generation to urban poor, especially

construction workers. This policy will also strive to ensure equitable

supply of land, shelter, and services at affordable prices to all the

section of society, and thereby to prevent the growth of slums in

urban areas.

Finally we can say that to move India we need hands of both

Government entities and private entities and since housing is one of

the basic need of every human being it is prime importance of every

Government to provide habited to its citizens.

AFFORDABLE HOUSING ON PUBLIC PRIVATE PATNERSHIP

MODEL is best alternative to provide housing to each and

every citizen of the country.



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13. REFERENCES

1.Affordable housing Partnership Guidelines 2009.2.Affordable housing for urban poor Kiran Wadhva 16 July

2009.

3.Department of Urban Development Housing & Local SelfGovernment Dec 2009 Government of Rajasthan.

4.Scheme_Guidelines_India_Infrastructure_Project_Development_Fund-English.

5.Government of Rajasthan draft guideline PPP_ 2009.

WEBLIKS TIME* DATE^

6. www.nineglobe.com/business_infra_lig

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PM

1/10/11

7. http://avlrajasthan.com/affordable

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PM

10/10/11

8. http://ppp.rajasthan.gov.in/policy/draftpp

ppolicy.pdf

10:00

PM

20/10/11

9. http://ppp.rajasthan.gov.in/Rajasthan_171109.pdfhttp://ppp.rajasthan.gov.in/Rajas

than_171109.pdf

6:00AM 21/10/11

10. http://www.indiahousing.com/affordable-

housing-in-india/policy.html

4:00

PM

21/10/11

11. http://www.censusindia.gov.in/2011-

prov- results/indiaatglance.html

3:30

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12/11/11

12. http://www.census2011.co.in/census/distr

ict/438- jodhpur.html

3:40

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12/11/11

13. http://timesofindia/rajastahn-adf 5:00

PM

28/11/11

14. http://www.pppinindia.com/financing.php

#1

7:40

PM

28/11/11

15. http://ibef/rejasthan_ppp2009.html 3:30

PM

30/11/11
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