Download - Public Private Partnership (PPP) - Group D
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Public Private Partnerships in
India
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Why PPP?
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China v/s India
China India
GDP US$ 5.02 Trillion US$ 1.3 Trillion
GDP Growth Rate 9% 7%
Infrastructure
Ports 27 major sea ports 11 major sea ports
irports 147 airports(43 international)
Plans: 244 airports in 2020
92 airports(12 international)
Highways Expressways: 65,000 kmHighways: 3.73 mn km
Density: 39 km/100 sq km
Expressways: 200 kmHighways: 70,548 km
Density: 2 km/100 sq km
Urban areas / cities 160 cities with population > 1million
43 cities with population > 1million
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Infrastructure gap in the country was holding
back economic growth by 1.5 2% every year
- Planning Commission
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As per the 11th Five Year Plan
Investments in Infrastructure:
Investment by Centre: ` 7,656 billion
Investment by States: ` 6,709 billion
Balance Investment: ` 6,196 billion
From Private Sector
Including Public Private Partnerships
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What is PPP?
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Public Private Partnership
Government and a private corporation combine toprovide a public service through the creation and use ofnew assets for a set time period
Private sector consortium forms a special company calleda Special Purpose Vehicle (SPV) to develop, build,maintain and operate the asset for the contracted period
Goal: To combine the best capabilities of the public andprivate sectors for mutual benefit.
Result: Integration and cross-transfer of public andprivate sector skills, knowledge and expertise
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Risk Allocation
Public Shared Private
Land Acquisition
Connectivity
Permissions &Authorisations
Regulatory Risks
Political Risk
Change in Laws
[Financial Support]
Volume Risk
Inflation Risk
Force Majeure
Design
Construction
CommissioningOperating Performance
Project Finance
Technology obsolescence
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PPP Variants
Management
Contracts
LeaseContracts
ConcessionContracts
Service
Contracts
Outsourcing
AffermageEnhanced Affermage
BOT, BTO, BOO,
BOOT, DBO, LDOT,
BDO etc..
States Risk
Investors RiskTechnical
Assistance
FullDivesture
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PPP Variants
Build/Operate/Transfer (BOT) or Build/Transfer/Operate (BTO)
Build-Own-Operate (BOO)
Build-Own-Operate-Transfer (BOOT)
Buy-Build-Operate (BBO) Design-Build (DB)
Design-Build-Maintain (DBM)
Design-Build-Operate (DBO)
Developer Finance
Lease/Develop/Operate (LDO) or Build/Develop/Operate (BDO)
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PPPs Imply
Efficiency gains
Efficient use of resources
Availability of modern technology
Better project design...... Leading to
Faster implementation
reduced life cycle costs and
optimal risk allocation.
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Advantages of PPP
Frees limited Public Finances for other priorities
Helps remove key economic bottlenecks
Improved service delivery and efficiency
Enables access to private sector resources, technology, andmanagerial skills
Access to long-term financing
Shifts risk to the private sector
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Government incentives for PPP
Regulatory clearances by Government
100% FDI allowed through automatic route
100% tax exemption on income for certain years
Allowing developers to charge user fees / tariffs
Government Subsidies (VGF)
Cheaper loans
Allow commercial exploitation to generate revenue
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Public Private Partnerships in India
Sector #Projects
Value(In
Crores)
Roads 271 102,005
UrbanDevelopment 73 15,288
Ports 43 66,499
Tourism 29 2,467
Energy 24 17,110
Airports 5 19,111
Railways 4 1,601
Education 1 93
450 projects
2,25,000 crores
http://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=MAHARASHTRAhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=MADHYA%20PRADESHhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=ORISSAhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=WEST%20BENGALhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=MAHARASHTRAhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=ANDHRA%20PRADESHhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=MAHARASHTRAhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=MAHARASHTRAhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=TAMILNADUhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=TAMILNADUhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=KARNATAKAhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=KARNATAKAhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=WEST%20BENGALhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=WEST%20BENGALhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=UTTAR%20PRADESHhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=UTTAR%20PRADESHhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=ANDHRA%20PRADESHhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=ANDHRA%20PRADESHhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=ORISSAhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=ORISSAhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=RAJASTHANhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=RAJASTHANhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=GUJARAThttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=GUJURAThttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=JHARKHANDhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=JHARKHANDhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=DELHIhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=DELHIhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=MADHYA%20PRADESHhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=MADHYA%20PRADESHhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=BIHARhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=BIHARhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=GOAhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=GOAhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=MANIPURhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=MANIPURhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=KERALAhttp://www.cry.org/mainapp/cryuserapps/projectsearch.aspx?state=KERALA -
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Some examples of PPP
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Urban Development Initiatives
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Mumbai MetroRail Project
Versova-Andheri-Ghatkopar
Charkop-Bandra-Mankhurd
Colaba-Mahim-Bandra
Charkop - Dahisar
Ghatkopar Mulund
BKC-Kanjur Marg via Airport
Andheri (E) Dahisar (E)
Hutatma Chowk - Ghatkopar
Sewri Prabhadevi
Total Length: 146.5 km
9 Corridors to be implemented in 3 Phases
Total Cost ` 47,092 Cr (US $10 bn)
Metro Master Plan was prepared withthe help of DMRC, IIT Mumbai and TCS
in the year 2003
Phase
I
Phase
II
Pha
seI
II
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Corridor 1: Versova Andheri Ghatkopar
First PPP in BOOT framework
Awarded to JV between Reliance Energy Limited,
Veolia Transport, France and
MMRDA
JV called: Mumbai Metro One Pvt Ltd
Designed to carry about 6 lakhs commuters per day initially
Will reduce travel time from Versova to Ghatkopar from existing 90 minutes to about 21minutes
World class features, facilities and quality standards
Highest levels of safety
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Corridor 1: Versova Andheri Ghatkopar
Consessioning Authority : MMRDA
Fixed Concession period : 35 years
Viability Gap : Bidding Criteria
12 elevated stations
Project Cost: ` 2356 Cr ($ 501 M)
Likely to be completed by March 2011
Viability Gap Fund of` 650 crores being provided by thegovernment
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Other Similar Projects for UrbanDevelopment
Other projects undertaken in India under PPP
Delhi Metro Rail Corridor (DMRC)
Mumbai Metro: Balance 8 corridors
Bandra Worli Sea Link etc
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Airports inIndia
Mumbai Airport
Delhi Airport
Bangalore Airport
Ahmedabad Airport
Mumbai Airport
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Hyderabad InternationalAirport Limited (HIAL)
Greenfield Project Type of PPP: BOOT
Concession period: 30 years
Project period: 2005 - 2008 Project cost: ` 2,478 crores
Investment pattern:
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Mumbai InternationalAirport Limited (MIAL)
Brownfield Project Type of PPP: LDOT
Concession period: 30 years
Project period: 2004 - 2010 Estd. Project cost: ` 5,800 crores
Investment pattern:
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Going Forward
Development of 25 non-metro airports (Ahmedabad,Amritsar, Agatti, Aurangabad, Agartala, Agra, Baroda, Bhopal, Bhubaneshwar, Chandigarh, Coimbatore,
Dehradun, Dimapur, Guwahati, Jaipur, Jammu, Khajuraho, Nagpur, Patna, Portblair, Pune, Rajkot, Ranchi,
Raipur, Goa, Imphal, Indore, Lucknow, Madurai, Mangalore, Trichy, Trivandrum, Udaipur, Visakhapatnam
and Varanasi)
Particulars Airport Indicative Cost
` crores
Restructuring/ Modernization forworld class airports
Delhi & Mumbai
Chennai & Kolkatta
15,000
5,000
Green Field Airports Bangalore, Hyderabad, Goa, Pune, NaviMumbai, Nagpur (Hub) and Greater Noida
10,000
Upgradation 25 selected airports 7,000
Modernization/ Improvement 55 airports 3,000
Greenfield Airports in north east 454
Total investment 40,454
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PPP for Highways
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Mumbai Pune Expressway
Greenfield project Length of expressway: 95 km Type of PPP: BOT (30 years) GoM appointed MSRDC Project Cost: ` 1,630 crores
Land acquisition: 1,030 Ha Contractors appointed:
IJM / SCL Joint Venture Hindustan Construction Co. Mumbai Larsen and Toubro Ltd. Mumbai V.M. Jog Engineering Ltd. Pune
Konkan Railway Corporation Ltd Operation & Maintenance:
Ideal Road Builders (IRB)
MSRDC exploring options for commercial utilisation ofland
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NHDP Plan
The main components ofNHDP include:
Golden Quadrilateral (GQ)
Length :- 5,846 kmConnecting Delhi, Kolkata,Chennai and Mumbai
North-South & East-WestCorridors
Length :-7 ,300 kmKashmir to Kanyakumari -4000km (with a spur to Cochin) andSilchar to Porbandar- 3300 km
http://www.nhai.org/nh2.asphttp://www.nhai.org/nh5.asphttp://www.nhai.org/nh4.asphttp://www.nhai.org/nh8.asphttp://www.nhai.org/nh8.asphttp://www.nhai.org/nh4.asphttp://www.nhai.org/nh5.asphttp://www.nhai.org/nh2.asp -
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Ports
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Mundra Port
Greenfield port Project cost: ` 2,151 crores
Commenced operations in 1999
Private partner: Gujarat Adani Port Ltd. (GAPL)
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Issues in PPPs
Slow decision making
Selection Criteria Revenue share
Tariff Regulation
Post selection alteration in scope of business
PPPs must be thoroughly cultivated and managed interms of planning, monitoring, and acceptance of lossof some control
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Thank You