Presentation Contracting Urban Transport (Copy Taken From The Internet)

Capacity Building for
Sustainable Urban Transport

Planning
Training Module Contracting
in Urban Transport
Session 1 : Project Life Cycle
Structure of Presentation
Objectives of Session
Define Project
Introduce Project Life Cycle
Components of Project Life Cycle
Role of Contracting in Project Life Cycle
Introduction to Contracting
Objectives of the Session

Components of project life cycle
Understand the role of contracting in project life
cycle
Introduction to concept of Contracting
Understand Bid Process Management
Understand the importance of Contract
Monitoring
What is a Project?
A Project is a set of coordinated activities, with definite
starting and finishing points, undertaken by an individual or
organization to meet specific objectives within defined
schedule, cost, and performance parameters
4
Source: BS 6079 Guide to Project Management. Elsevier
Project
Identification
Monitoring &
Evaluation
Project
Scoping
Implementation
Project Life Cycle
Contracting
Project
Planning &
Preparation
Appraisal
Project
Structuring
Public
Consultation
How do we identify a Project?

Introduction
Project
Identification
Project Scoping
Project Planning &
Preparation
Project Appraisal
Public
Consultation
Project Structuring
Identification and prioritization of projects in conformity to

State & National Policies & Guidelines:
National Urban Transport Policy,
Jawaharlal Nehru National Urban Renewal Mission
A comprehensive vision document of a city must identify a
sustainable project:
Master plan
City development plan
Comprehensive traffic and transportation study
Bid Process
Management
Project
Implementation
Monitoring and
Evaluation
Comprehensive Mobility Plan

Project ideas may also come from:
ULBs,
Stakeholder departments
Donors or from
NGOs
Project Scoping
Introduction
Project
Identification
Project Scoping
Project Planning &
Preparation
Project Appraisal
Public
Consultation
Project scope : Definition of what the project is

supposed to accomplish in the allocated budget (time
and money) to achieve the project objectives
A project scoping study gives the project manager the
opportunity to look at and assess the project before it
becomes formally "live".
Project Structuring
Time
Bid Process
Management
Project
Implementation
Monitoring and
Evaluation
Budget
Project
Scope &
Quality
Resource
Project Scoping
Introduction
Project
Identification
Project Scoping
Project Planning &
Preparation
Project Appraisal
Public
Consultation
Project Structuring
Bid Process
Management
Project
Implementation
A SMART analysis. Projects should be SMART i.e. Specific,

Measurable, Achievable, Realistic, and Time-bound.
Project scoping does not check the feasibility of the project
but establishes how it needs to be organized and managed:
what the project aims and objectives should be
what the risks, limitations, and possible difficulties are
how the project should be organized and tackled
vision of a long-term sustainability of the project
infrastructure requirements
capacity of operations and maintenance during the
project life cycle
Monitoring and
Evaluation
Project Planning & Preparation

Introduction
Project
Identification
Project Scoping
Project Planning &
Preparation
Project formulation is a process of documenting the eligible facility,

the eligible work, and the eligible cost for projects.
Formulation allows for the consolidation of similar work items into
projects to expedite approval and funding and to facilitate project
management
Project formulation includes:
Project Appraisal
Public
Consultation
Project Structuring
Bid Process
Management
Project
Implementation
Monitoring and
Evaluation
Preliminary Project Report

Feasibility Analysis
Techno-Economic Analysis
Project Design and Network Analysis
Input Analysis
Financial Analysis
Cost-Benefit Analysis
Pre-Investment Analysis
Preliminary Project Report

Feasibility Report
Detailed Project Report
Project Appraisal
Introduction
Project
Identification
Project Scoping
Project Planning &
Preparation
Project Appraisal
Public
Consultation
Project Structuring
Bid Process
Management
Project
Implementation
Monitoring and
Evaluation
The key criteria for an appraisal of a project are:

Relevant:
consistent with the policy and programming framework and other
ongoing and planned projects
within the institutional capacity of the project sponsor to implement
addressing key problems of the sector or stakeholders
Feasible:
Strategy is realistic and within government policy
Cost estimates are sound
Assumptions made by the project are justified
The project implementing agency has the management, coordination,
and financing arrangements to implement the project
Sustainable:
There is adequate ownership of the project by project beneficiaries
Technology is appropriate
Environmental concerns have been addressed
Financial or economic analysis is reliable (e.g. a cost-benefit analysis)
10
Public Consultation
Introduction
Project
Identification
Project Scoping
Project Planning &
Preparation
At each stage, public/ stakeholders consultation is required

to ensure the project is accepted by the end-users
Project details should be prepared through a consultative
or participatory process involving stakeholders and the
community.
Project Appraisal
Public
Consultation
Project Structuring
Bid Process
Management
Project
Implementation
Public participation should be generated with stakeholders

through the use of various methods, such as in-depth
interviews, public meetings, workshops, focus group
discussions, etc.
Consultations should also be held with vulnerable groups.
Monitoring and
Evaluation
11
Project Structuring- Beginning of Contracting process

Introduction
Project
Identification
Project Scoping
Project Planning &
Preparation
Project Appraisal
Public
Consultation
Project Structuring
Bid Process
Management
This stage of the project cycle involves structuring of the

project and securing financing for the same, either
through:
the Government budget,
or through aid donor funds,
or through private sector investors under a suitable
Public Private Partnership (PPP) format.
It is important the once a project has been approved,
discussions should be held with donors to secure their
commitments to fund the projects.
Project
Implementation
Monitoring and
Evaluation
12
Project Structuring Options

Public Sector
Private Sector
Design
Finance
Construct
O&M
Ownership
EPC Trunkey
EPC
Item Rate
Service
Contract
Management
Contract
Public Ownership
Lease
Concession
BOT/
BOO
Divest
Private Ownership
13
Source: Sustainable Urban Transport Planning Toolkits for Public Private Partnership in Urban Transport, 2008, Ministry of Urban Development
Issues in Project Implementation

What are the issues faced by you in your city for
implementation of any project?
Scoping
Planning
Financing
Political environment
Public consultation- consensus
Project preparation
Selection of contractor
Contract monitoring
14
Contracting
What is a Contract?
Contracts, as defined by CPWD Works Manual,
2003, is when two or more persons have common
intention communicated to each other to create
some obligation between them, there is said to be
an agreement. An agreement which is enforceable
by law is a Contract.
In India, contracts are governed by the Indian

Contract Act of 1872
16
Contracts as defined by ADB/World Bank
Agreement entered into between the Purchaser and the supplier,

together with the contract documents referred to therein, including
all attachments, appendices, and all documents incorporated by
reference therein
17
What is a Contract?
The following are the essential ingredients of a Contract:

(a) Offer made by one person called the Promisor
(b) Acceptance of an offer made by the other person called the Promisee
(c) The act of doing, or abstaining from doing, a particular act by the promisor for
the promisee is called consideration.
(d) The offer and acceptance should relate to something that is not prohibited by law.
(e) Offer and acceptance constitute an agreement, which, when enforceable by law,
becomes a contract.
(f) In order to make a valid and binding agreement, the party entering into such an
agreement should be competent to make such an agreement.
For the purpose of an agreement, there must be a communication of intention

between the parties thereto. Hence, in the form of a contract is:
(a) Proposal
(b) Communication of the proposal
(c) Communication of acceptance of the proposal
18
FIDIC Guidelines
During the past half century, the International Federation of Consulting

Engineers (FIDIC) has devoted itself to the compilation of management
documents for all kinds of projects, among which the FIDIC Conditions of
Contract are of the highest influence and are the most popular application
Handbooks
FIDIC Conditions of Contract for Construction, the (New Red Book)
FIDIC Conditions of Contract for Plant and Design/Build, the (New Yellow
Book)
FIDIC Conditions of Contract for EPC Turnkey Projects, the (Silver Book)
FIDIC Short Form of Contract, the (Green Book)
FIDIC Conditions of Contract for Design-Build-Operate Contract, the (Gold

Book)
19
Legal Framework- Constitutional Provisions

Under Article 299 of the Constitution of India
All contracts made in the exercise of the executive power of the Union or
the State shall be expressed to be made by the President or by the
Governor of the State as the case may be and all such contracts and all
assurance of property made in the exercise of that power shall be
executed on behalf of the President or the Governor by such person and
in such manner as he may direct or authorize.
Neither the President nor the Governor shall be personally liable in
respect of any contract or assurance made or executed for the purpose
of this Constitution, or for the purposes of any enactment relating to the
Government of India heretofore in force nor shall any person making or
executing any such contract or assurance on behalf of any of them be
personally liable in respect thereof
20
Legal Framework
Indian Contracts are governed by statutory law, which may require contracts
to be put in writing and executed with particular formalities. The Indian
Contract Act of 1872 contains the law relating to contracts
ICA deals with the general principles of contracting.
It is not the entire law relating to contracts.
If the ICA has a provision pertaining to an issue it has to be followed. ICA
is exhaustive to that extent.
If ICA is silent on a particular issue, Common Law principles can be used.
ICA also deals with certain special contracts such as guarantee,
indemnity, bailment, pledge, and agency.
Other acts governing the contracts are:
Negotiable Instruments Act 1881
The Indian and Arbitration and Conciliation Act 1996
Sale of Goods Act 1930
21
Methods of Procurement
There are various methods of procurement, some of which include:
1. International Competitive Bidding
2. National Competitive Bidding
3. Limited International Competitive Bidding
4. Shopping
5. Direct Contracting
6.Procurement from Specialized Agencies
7.Procurement in Loans to Financial Intermediaries
8. Performance-based Procurement
9.Procurement under Disaster and Emergency Assistance
22
Bid Process Management

Introduction
Project
Identification
Project Scoping
Bid process management is a systematic process to

identify a technically and financially sound bidder for
operation/ construction/ consultancy of a project.
Project Planning &

Preparation
Project Appraisal
Public
Consultation
Project Structuring
Bid Process
Management
Project
Implementation
Monitoring and
Evaluation
23

EoI/ RFQ
Technical
Short-listing
Financial
Opening
Queries/
Response
Two cover bid

submission
Financial
Evaluation
Short listing
Amend bid
document
Issue of LoI
Issue of RFP
Pre bid
meeting
Negotiation
and Contract
Signing
24
Project Implementation Options

Introduction
Project
Identification
Modes
Urban Rail Transit
Project Scoping
Project Planning &
Preparation
Project Appraisal
Bid Process
Management
Project
Implementation
Monitoring and
Evaluation
Primarily Government funded except in case of high density and

above ground construction where PPP maybe feasible with VGF
Bus provisioning by Central Government/State Government.
Bus Rapid Transit

System / City Bus
Service
Public
Consultation
Project Structuring
Project Implementation Options/ Contracting Strategy
MultiMulti-level Parking
Projects
Public Bicycle
Scheme
Bus
depots/Terminal
depots/Terminal
and workshops
Network
Improvement
Infrastructure provisioning by Government on a PPP basis or

development of infrastructure on a EPC
Operations and Maintenance preferably on PPP with revenue
risk with Government /private
Infrastructure provisioning by Private sector on BoT basis or
development of facility by Government on EPC basis
Operations and Maintenance preferably on PPP with revenue
risk with Government /private
Cycle stations , Cycles, Control Centre by Government
Operations and Maintenance by PPP
Land by Government
Development preferably on PPP
Existing roads up-gradation by Government
New roads/ links : Government or PPP basis
25
Contract Management
Introduction
What is Contract Management?
Project
Identification
The Central aim of contract management is to obtain a product as

agreed upon in the contract and achieve value for money.
Project Scoping
Project Planning &
Preparation
Project Appraisal
Public
Consultation
Project Structuring
Bid Process
Management
Project
Implementation
Monitoring and
Evaluation
Factors essential for Contract Management

Good preparation of bid document
Scope of work
Eligibility criteria
Evaluation procedure
Right Contract form
Specifications/ BoQ
Strong Project Team
Contractor bonus
Professional assistance
Liquidated damages
Time period
Good Communications
Price adjustment procedure

Variation control
Foreclosure / Termination
26
Contract Monitoring and Evaluation

Introduction
Project
Identification
Contract Monitoring Framework

What to Monitor? Cost, Time, Quality
Project Scoping
Project Planning &
Preparation
Project Appraisal
Public
Consultation
Project Structuring
Bid Process
Management
Project
Implementation
Monitoring and
Evaluation
Who will Monitor?

Frequency of Monitoring
Achievement of Project Purpose/ Objectives
Resources for Monitoring
Format for Reporting/ Monitoring
Monitorin
g
Grievance Rederesal Mechanism

Action Taken Report
Lessons Learned
Evaluatio
n
Annual
Monitoring
Report
27
Annual Monitoring Report

Introduction
Project
Identification
Details of the work done during the year

Implementation problems that were addressed
Project Scoping
Project Planning &
Preparation
Project Appraisal
Public
Consultation
Project objectives that were achieved

Projects intended consequences
Targets set for the year that were achieved
Project Structuring
Bid Process
Management
Project
Implementation
Monitoring and
Evaluation
28
What have we Learned?

Defining project
Introduce various components of project life cycle
Key steps for ensuring successful completion of the project
Role of Contracting in the project life cycle
Introduction to Contracting
Sharing of experiences in Project Implementation
29
Questions??
Thank You!
You!

Planning
in Urban Transport
Session 2 : Feasibility Report and
Detailed Project Report
32
Objective of the Session

The objective of this session is to introduce the participants to:
Contents of Preliminary Project Report (PPR), Feasibility Report (FR)
and Detailed Project Report (DPR)
To learn the basics of
What DPR is
How a DPR varies across Urban Transport Projects
How to Select a consultant for Conducting a DPR
How to Appraise a DPR
33
Project Life Cycle PPR, FR, DPR

Step 1: Preliminary Project Report (PFS)
PFS): Defined as a preparatory study, enabling
organizations to undertake a successful feasibility study for a particular
investment opportunity. The study comprises of sector investment
options and priorities, initial scoping and costing of the identified
investment project, and designing the governance and financing
structures for implementation.
Step 2: Feasibility Report:
Report: Aims to objectively and rationally uncover the pros and
cons of the proposed project, to assess if a project is viable (based on
Physical parameters, Technical and Financial, Economic parameters).
Step 3: Detailed Project Report:
Report: DPR analyze the technical and financial aspects of
each of the project components, in detail. The report provides various
alternative approaches to a project and identifies an optimum, feasible
technical and financial solution.
34
Defining Feasibility Report and DPR

PrePre-Feasibility
Report
Feasibility
Report
Detailed Project
Report
Introduction and Objective of Study
Project Need and Justification, Project Area Characteristics
Existing Situation and Anticipated Demand
Options Considered and Comparison of Feasible Options - Preliminary technical & financial
assessment
Conclusions and Recommendations- Gives a GO/No GO
Introduction and other elements same as Pre-feasibility Report
Definition, Scope and, Purpose
Technical Specifications- Scope, Features of the project, location, broad alignment
Examination of the Critical Risks and Problems of the Project
Broad estimation of Financial and Economic returns from the project
Evaluation and Conclusion- Gives Recommendations - is the project technical and financially
feasible and does it warrant a DPR to be made
Introduction and other elements same as Feasibility Report
Existing Situation - Traffic and Transportation Characteristics - Issues and Policy
Project Details - Detailed Design and drawings of Project components - Technical

Specification Detailed Project Cost and BoQ
Social and Environmental Impacts
Project Implementation Framework - Project Institutional Framework

Project Financial Structuring and Phasing - Project O&M Framework and Planning
Project Financing - Financial Viability & Sustainability Project Benefits Assessment (Social Cost-Benefit Assessment) - Risk Management
Framework
Conclusion - Detailed Design Drawing and Technical Specification ; Cost and Revenue
Estimates
35
What is Feasibility Report?

A typical Feasibility Report should contain information about the
economic and institutional environment, demand forecast, available
technology, personnel requirements, scale of the project, location,
physical inputs, timing and implementation, phasing of the project
(expansion), financial planning, and environmental aspects.
Conclusion of the feasibility report shall clearly state, if the project can be
implemented and if so, that it will it meet its desired project objectives.
The objective of a feasibility report is to assess if a project is viable based
on physical, technical, financial, and economic parameters
36
Contents of a Feasibility Report

Introduction
Rationale and Scope
Definition, scope and, purpose and level of detail of the feasibility study
Technical Specifications
Financial and Economic plans of a project
Social and Environmental Impacts
Examination of the critical risks and problems of the project
Evaluation and conclusion
37
What is DPR?
Detailed project report is a complete document for investment
decision-making, approval, planning whereas feasibility study report is
a base document for investment decision-making. Detailed project
report is base document for planning the project and implementing the
project.
It provides a detailed technical and financial analysis of each of the
project component. The report provides various alternative approaches
to a project and identifies an optimum, feasible technical and financial
solution.
38
Components of DPR
Broad Components of a DPR:
Demand Analysis: To establish the demand-supply gap for services. Involves

consultations with stakeholders.
Least cost Analysis: To identify the best and cost-effective solution; usually
economical to adopt a technology already applied elsewhere.
Structures and Civil Works: To bring out type of designs and site development
that should be followed during implementation. Quality, quantity, cost
estimates, etc. of materials required should be detailed.
Work Schedules: Consultants preparing DPR must include work-schedule for

executing work by contractor.
Implementation Plan: Consultants should prepare an implementation plan to

be followed by contractors during execution.
39
Table of Contents- PPR/ FR/DPR

Group Activity
40
Contents of a DPR
Project Background
Introduction - City Profile
Sector background context & broad project rationale
Project Definition, Concept and Scope
Existing Situation
Traffic and Transportation Characteristics in the City
Existing Issues and Policy
Project Details
Detailed Design of Project
Project Cost
Project Implementation Framework
Project Institutional Framework
Project Financial Structuring and Phasing
Project O&M framework and planning
Project Financing
Financial Viability & Sustainability
Project Benefits Assessment (Social Cost-Benefit Assessment)
Risk Management Framework
Conclusion
41
What to do with a DPR?

The main objective of a DPR for a local agency is to identify projects that
offer solutions to pertinent development problems. This funding can be
available from Central Government Schemes e.g., JnNURM, International
Funding Organizations, e.g., JICA and Banks, e.g., WB.
DPR is helpful for local agencies in:
1. Justifying the implementation of certain projects agency may already
be aware of the solutions but a DPR details the same solution and
offers a sound basis for funding organizations to believe in the worth
of implementation.
2. Justifying Funding
3. Laying out an Implementation Plan for the Projects
4. Identifying the sources for Funding
42
DPR across Projects

For Urban transport Projects, DPRs need to be prepared for the following
components:
NMT
Public Transport
Parking
Road Infrastructure
Road Safety
TOD
While the broad context of all these projects remains the same, being the
context of urban transport in India and Indian cities, the individual
components of each project will vary.
43
How to select a consultant for preparing DPR?

Consultants are hired for a project under three broad areas works, goods, and
services. Generally, hiring is undertaken through the following two procedures:
1. QCBS- Quality and Cost-Based Selection
Followed through competition among qualified shortlisted firms where
selection is based on quality of proposal and cost of services
2. QBS- Quality-Based Selection
Followed for projects where QCBS is not appropriate. These include projects
that are:
Complex and highly specialized
Require innovations
44
How to select a consultant for preparing DPR?

Procedures and steps for hiring consultants
Preparation of Terms of Reference (TOR)
Preparation of cost estimate and the budget
Advertising
Preparation of the shortlist of consultants
Preparation and issue of the Request for Proposal (RFP);
(i)
Letter of Invitation (LOI)
(ii) Information to Consultants (ITC)

(iii) Proposed contract
Receipt of proposals
Evaluation of technical proposals: consideration of quality
Evaluation of financial proposal
Final evaluation of quality and cost
Negotiations and award of the contract to the selected firm
45
Terms of Reference (TOR) for engaging a Consultant

A precise statement of objectives
Define Scope of work
An outline of the tasks to be carried out
A schedule for completion of tasks
The support/ inputs provided by the client
The final outputs that will be required of the Consultant
Composition of Review Committee to monitor the Consultants works
Procedures for Mid-term review and Progress Reports required from
Consultant
Experience Profile of the Consultant
List of key positions - CV and experience would be evaluated
46
How to appraise the DPR?

Project Appraisal is an important step for accessing grants
(financial).
The Local Agencies should make sure that the DPR should fulfill
guidelines and parameters laid out under the schemes of the
funding agencies.
The DPR appraisal criteria include the following:
Technical
Financial
Social and Environmental
Institutional
47
Checklist for Appraisal of DPR JnNURM

Objectives/Project Details & Need for the project
Technical
Appraisal
Compliance with National Urban Transport Policy

Whether CDP/ CMP is prepared, appraised, and approved
Whether PPP is envisaged or not
Land Required under Project and Status of Land Acquisition.
Timelines for implementation
Whether Project technical feasibility study has conducted
surveys for explaining existing conditions
List anticipated hindrances in project implementation and
measures for solutions
Assessment of the existing user demand and forecast the same
A detailed design of physical infrastructure, bill of quantities, and
cost estimates.
An evaluation plan & a detailed list of monitoring and evaluation
indicators for the project outcomes
48
General Appraisal Criteria - JnNURM
Financial &
Economic
Appraisal
Phasing and Estimated (Amount/Share) cost of the Project, O & M Cost and
Financial Sustainability
ULB/Parastatal share (financial); Funding Pattern for Capital cost and to meet
O&M expenditure
Project proposals shall present the cost-benefit analysis incorporating a life-cycle
cost analysis
Technical feasibility and selection of a least life-cycle cost should be based on
financial and economic viability parameters
For ULB/parastatal agency-sponsored projects, DSCR (incl. sinking & revolving
fund), should be at 1.
The cost- benefit analysis for individual projects of Rs.50 crores or more shall
demonstrate a positive Net Present Value (NPV) and an ERR equal to or above the
appropriate opportunity cost of capital.
For projects undertaken by Special Purpose Vehicle (SPV) on a Public-Private
Partnership (PPP):
Internal Rate of Return (IRR) greater than the cost of capital raised for the
project.
Proposal shall demonstrate financial viability based on a targeted IRR of at
least 200 basis points above cost of capital. DSCR should not be less than
1.25.
Project should provide an Economic Rate of Return (ERR) greater than the cost
of capital and the proposed minimum
49
General Appraisal Criteria - JnNURM

Social and Environmental
Social &
Environment
Appraisal
Whether proper identification of environmentally and socially sensitive

areas has been carried out.
Whether Environmental Assessment Study outcomes and Social
Assessment Study clearly listed
Incorporation of suggestion on mitigation measures to minimize the
negative impacts
Whether all concerned authorities issued clearance, ed.
Environmental. NHAI and others
Institutional
Institutional
Assessment of existing required Institutional framework of the

implementation and further monitoring of project
Identification of areas for capacity building and strengthen of
institution
50
Conclusions Lessons From the Discussion

Where the PPR, FR, and DPR fit into the project life cycle
What is the overall structure of a DPR?
What should form the contents of a DPR?
How to appraise a DPR?
Checklists for various components of DPR appraisal
How to select a Consultant for conducting a DPR?
What are the TOR for selecting a Consultant?
51
Questions??
52
Thank You!
You!
53

Planning
In Urban Transport
Session 3: Project Financing and
Implementation
54

The objective of this session is to introduce the participants to :
Project Implementation Models
Project Financing Options
Key Risks in financing urban transport projects
Case Study of RRTS project
55
Investments in Urban Transport

Investment of Rs 3,88,308 crores is required in 12th Five Year Plan Working Group Report
Projects
Investments (Rs.
Rs. Crores)
Street Infrastructure
1,67,218
Public Transport
2,02,628
ITS and ATC
8,520
Parking
1,943
Institutions and Capacity Building
5,000
Innovations, R&D & Pilot projects
1,000
NMT and IPT projects
2,000
Total
3,88,308
Need for exploring alternative sources of financing for

implementing the capital intensive projects
56
Exploring Financing Options!
57
Means of Finance
Cities identify urban transport projects; essential for improving urban mobility
Feasibility/ Detailed Project Report
PPP
Public Funding
Traditional Means of
Finance
At National/State Level
General budget funding
National level funding (like JnNURM)
Financial Institution/ Banks
At Local Level
Advertisement
Fare box revenue
Alternative Means
of Finance
Dedicated Urban Transport Fund
Parking, toll plaza
Congestion pricing
Cess on fuel, private vehicle
taxation/ green cess on existing
private vehicles
Property development/ TOD
Land value capture/ Betterment
charges/ Vacant land tax
Municipal bonds
Carbon Finance
Viability gap funding

upto 40% of the project
cost
Financial Institution/
Banks
Advertisement
Fare box revenue
58
Other Financing Options

Financing Options
Sources of Funding
Development Finance
Institutes
India Infrastructure Finance Company (IIFC)

Infrastructure Leasing & Financial Services (IL&FS)
Infrastructure Development Finance Company (IDFC)
Industrial Finance Corporation of India (IFCI)
Commercial Banks
Nationalized Banks; e.g. SBI

Private Sector; e.g. ICICI
Long-term
Infrastructure Bonds
Industrial Finance Corporation of India (IFCI)

Life Insurance Corporation of India (LIC)
Infrastructure Development Finance Company (IDFC)
NBFC classified as an Infrastructure Finance Company by the RBI
Municipal Bonds
External Commercial
Borrowings
Term loan from overseas bank

Foreign Currency Convertible Bonds (FCCB)
Foreign Currency Exchangeable Bond (FCEB)
Non Partially convertible preference shares which would be considered as ECB
Multilateral Funding
Asian Development Bank (ADB)/ World Bank (WB)

Japan International Cooperation Agency (JICA)/ International Finance Corporation (IFC)
Private Equity
IDFC Private Equity

ICICI Venture
SREI Venture Capital
Blackstone Group
IL&FS Investment Managers Ltd
59
Innovations in Financing
Indian Context
60

Mode of Transit
Implementation Options
Case Studies
Sources of Revenue
Urban Rail Transit
Primarily Government funded except in case of high

density and above ground construction where PPP
maybe feasible with VGF
Public Sector Model; Revenue Share Model; PPP
Model
Hyderabad
Metro (VGF)
Delhi Airport
Express
(Revenue Share)
Fare box revenue

Property development
Advertisements
Transit Oriented
Development
Bus Rapid Transit

System / City Bus
Service
Buses funded by Central Government/State

Government./ Financial intermediaries
Infrastructure provisioning by Government on a PPP
basis or development of infrastructure on EPC
Operations and Maintenance preferably on PPP with
revenue risk with Government /private
Permits to private buses for public carriage;
Management contract; Net Cost; Gross Cost
Indore City Bus

service
Bhopal City Bus
Service
Ahmedabad
BRTS
Fare box revenue

Advertisements
Transit Oriented
Development
Multilevel Parking
Projects
Infrastructure provisioning by Private sector on BoT

basis or development of facility by Government on
EPC basis
Operations and Maintenance preferably on PPP with
revenue risk with Government /private
On-street & Off-street Parking Concession; DBFOT
Sarojini Nagar
Market, Delhi
Ramniwas
Gardern , Jaipur
Parking Charges
Commercial
development
Advertisements
61

Mode of Transit
Implementation Options
Case Studies
Sources of Revenue
Public Bicycle
Scheme
Cycle stations , Cycles, Control

Centre by Government
Delhi Green Bike

scheme
Rental revenue
Advertisements
(Integrated with
development of a
transit network)
Bus
depots/Terminal
depots/Terminal
and workshops
Land by Government
Amritsar
Ludhiana
Manali
Adda fees, etc.

Advertisements
Network
Improvement
Existing roads up-gradation by

Government
New roads/ links: Government or
PPP basis
Surat Ring Road

Urban roads in
Thiruvananthapuram
Toll tax
Advertisement
BusBus-QueueQueueShelter
Private Sector Party (PSP) develop

Bus-Q-Shelters by undertaking
Construction, Operation, &
Maintenance and Transfer (BOT) to
Government agency thereafter
Bus Q Shelters in
Delhi (DTC)
Advertisement
62
National Urban Transport Fund

A Green Surcharge of Rs. 2/lt. on petrol sold across the country- the
rationale behind the fact that petrol is consumed exclusively by the
personalized vehicles
A Green Cess on existing personalised vehicles at 3% of the annual
insured value both for car and two wheelers
Urban Transport Tax on purchase of new cars and two-wheelers at
7.5% of the total cost of the petrol vehicles and 20% in case
personalized diesel cars
12th FiveFive-Year Plan period
Total annual yield : Rs 42,199 Crore in the first year
Rs 1, 93, 542 Crore in four years
MouD is encouraging cities to use innovative financing mechanisms for
implementing capital-intensive projects
63
Initiative in Karnataka : Metro Infrastructure Fund

Government of Karnataka while sanctioning Phase II of Bangalore Metro project has
decided the following sources to be credited to Metro Infrastructure fund :
Levy of cess and surcharge under Karnataka Town and Country Planning Act at 5%
of market value of land/ building
Extend benefit of 4 FAR for all properties lying within a distance of 500 meters from
metro alignment
Levy cess of 10% for residential and 20% for commercial on the additional FAR
granted
Issue TDR in lieu of compensation for acquisition of land for Metro Rail project
Revenue from additional FAR and levy of cess on transaction : Rs 432 crores
in 5 years
Revenue from cess of 5% of the market value : Rs 1250 crores in 5 years
64
Draft of National PPP Policy - 2011

As per the Draft PPP Policy, PPP means an arrangement between a Government /
statutory entity / Government-owned entity on one side and a private sector entity
on the other, for the provision of public assets and/or public services, through
investments being made and/or management being undertaken by the private
sector entity, for a specified period of time, where there is well defined allocation of
risk between the private sector and the public entity and the private entity receives
performance linked payments that conform (or are benchmarked) to specified and
pre-determined performance standards, measurable by the public entity or its
representative.
PPP in infrastructure sectors like roads, ports, power generation has evolved and
matured over the time, and the same model is being replicated in urban
infrastructure and transportation. Delhi Metro Airport Express link, Hyderabad
Metro, and Mumbai Metro are some of the new examples of the PPP projects.
65
PPP Models
S.No.
S.No.
Format
VGF Model
Structure
Entire project cost borne by the private player.

Land is acquired by the Government and rights are granted for Property Development/TOD
to the concessionaire.
The overall share of VGF in the project cost would be capped at 40%
An SPV would be formed for the project implementation by the Government
Private sector would however bear the entire project cost
Revenue would be collected by the SPV
Payment to private on annuity basis
Annuity Model
Grant During
Operation
Private sector would bear 100% of project cost and collect the revenue as well.
Government would provide an equal amount of revenue shortfall grant every year
This model is a variation of the public sector model.

All activities other than property development continue to be undertaken by the Public
Sector SPV.
Property development business can be concessioned to a private player.
Private sector would pay upfront premium in installments during the initial years of
operation.
Property
Development by
Private Sector
66
Rail projects being implemented on a PPP format
Projects
Concessionaire
Hyderabad
Metro (VGF
Model)
L&T Metro Rail

(Hyderabad) Ltd.
Mumbai
Metro - VAG
Corridor
(VGF Model)
Mumbai Metro
One Pvt. Ltd.
Joint Venture of
Reliance Energy
Ltd and Veolia
Transport of
France
Project
cost
16378
2356
VGF
Rs.
Rs. Crore
1458
(9% Total
Project
Cost)
650
(28% of the
Total
Project
Cost)
Revenue
Share (pa)
Means of Finance
Equity
Debt
Nil
21%
(Rs.3440
crore)
crore)
70%
(Rs.11480
crore)
crore)
Nil
22%
(Rs.513 crore)
50%
(Rs.1194
crore)
67
Implementation model for road projects in Thiruvananthapuram Annuity based
68
Source: Thiruvananthapuram City Roads Improvement Project, Transport Infrastructure, PPP India, Ministry of Finance, GoI
Key Risks in project financing of Urban Transport

Before Project Construction
Land Acquisition
Permits and clearances
R &R
Financial Closure
During Construction
Unforeseen physical challenges (soil type, etc.)
Unfactored Inflation /forex rate/interest rate changes
Inadequate Design
Technology choice
Utilities shifting
Force Majeure
After Construction (Operation Stage)
Ridership/Demand
Tariff / Political
Operations and Maintenance
Force Majeure
69
Case Study of Regional Rapid

Transit System (RRTS)
70
Introduction to RRTS
Selected Corridors for Study
Delhi Gurgaon Rewari Alwar (158
Kms)
Kms) [DGRA - Project Corridor]
Delhi Ghaziabad Meerut (67 Kms)
Delhi Sonipat Panipat (89 Kms)
Estimated Capital Cost : Rs 32,141 crores
over 5 years
Estimated O&M expenses
2017 : Rs 794 crores
2021: Rs 2,376 crores
2041: Rs10,558 crores
71
RRTS - Objectives
To provide fast, safe, reliable, comfortable and rapid transport of
commuters between RNCR and NCTD
To decongest NCT Delhi by dedicated high speed rail connectivity to
Rewari, Alwar and industrial growth centers in Haryana
Collection / Dispersal of RNCR commuter traffic at major O/D points like
ISBTs, Rly stations, and metro stations
Will result in significant financial and economic benefits to the States
Will speed up the development in the RNCR region with rapid passenger
connectivity
72
Financing Options Questions

How can such capital-intensive projects be financed?
What could be additional sources of revenue other than fares?
Should capital recovery an objective for such projects?
Will the choice of financing influence the implementation models?
What are the possible implementation models?
73
Revenue Capture Instruments

Nature of Benefit
Revenue Capture Instrument

Fare Box
Direct
Advertisement
License Fees from station assets
Status of capture
Captured in terms of fare,
advertisement revenue, and license
fee from kiosks, stalls, and other
assets
Increase in business next to stations

Proximate
Real Estate development rights arising

from ToD.
Captured from property development

near stations for TOD
Rise in property value around stations
Economic development on the corridor

Less congestion for road users
Indirect
Captured from revenue from carbon

credits.
Improvement in air quality

Availability of more public space
Reduction in use of fossil fuels
Cess on Property transaction and cess

on VAT in the states also considered.
74
Tentative TOD Area

S. No.
No.
Station
Area under TOD (ha)
PANCHGAON
30
DHARUHERA
22
BTK
28
MBIR
60
REWARI
40
BAWAL
30
SNB
125
KHAIRTHAL
28
ALWAR
28
Total
391
TOD
LOCATIONS
75
Summary of Revenue
2017
Revenue sources
2021
2031
2041
2046
Revenue (Rs.
Rs. Crores)
995
1583
4090
9237
12801
62%
Advertisement
17
51
101
162
194
1%
License Fees
11
20
29
34
0%
Carbon Credit
99
133
185
1%
Revenue From TOD
794
2792
5412
36%
1911
4570
9807
9428
13029
100%
Fare Box
Total
14000
12000
10000
Net Revenue From TOD
8000
Carbon Credit
License Fees
6000
Advertisement
4000
Fare Box
2000
76
0
1
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
RRTS Project : Financial Returns in Generic terms

Particular
Outflows
Project Investments
O&M Costs
Total Outflows (A)
Inflows
Revenue
Total Inflows (B)
Net Cashflow (B-A)
Project IRR
2012
2013
2014
2015
2016
2838
6016
9565
10139
3583
2838
0
-2838
6016
0
-6016
9565
0
-9565
10139
0
-10139
2017
2021
2031
2041
2046
3583
794
794
2376
2376
5573
6879
10558
10558
5911
8303
0
-3583
1911
1911
1117
4570
4570
2195
9807
9807
2928
9428
9428
-1130
13029
13029
4726
10.55%
If the project is developed by the Government SPV, the Weighted

Average Cost of Capital (WACC) would be around 5% due to
access to soft loans from the multilaterals at low interest rates
to the Government agencies.
In this case, the project is financially viable.
WACC in case of private sector could be as high as 12%12%-15%, in

which case the project becomes unviable.
The return can reduce nominally with inclusion of Interest

During Construction (IDC) in the project cost.
Paucity of budgetary allocation and

limited multilateral finance pose a
challenge to the government in execution
of such large scale projects.
77
Under such circumstances, project structuring becomes the crucial issue for successful implementation
of the project
Financing and Implementation Models

1. Public Sector Model
PSUs
2. Public Private Partnership
3. Mix of public and private sector

models (Revenue Share Model)
78
Public Sector Model

Structure
Implemented by SPVs owned by Central / State Governments
The SPV would develop, operate, and maintain the RRTS project.
Develop and sell the commercial residential properties at RRTS
stations
Financing
Central and State Govts. - equity in the SPV
Debt - multilaterals like JICA at concessional rates
Alternative means of finance
Cess on Property Transactions in TOD area
Mass Rapid Transit fund
Issue of tax free infrastructure bonds, etc.
79
Public Sector Model

Means of Finance
Contribution
Rs. Crore
Equity- Central Govt.
15%
4900
Equity State Govts.
15%
4900
Senior Debt (Term loan from Multi Laterals 1.9% pa, 30 yrs)
45%
14678
Cess on Property Transactions
2%
728
Mass Rapid Transit Fund
5%
1633
Tax Free Bonds (Coupon -8% pa)
5%
1633
Subordinate Debt (Interest Free Loan from Central/State Govts. towards

Taxes) (10 years)
8%
2611
Subordinate Debt (Interest-Free Loan from State Govts. towards cost of

land ) (10 years)
5%
1581
100%
32664
Total
80
Revenue Share model

Govt. of India
State Govt.
(MoUD, IR and
(Delhi, Haryana,
NCPRB)
50%
MRT Fund
& Infra
Bonds
Cess on
Transactio
ns
Rajasthan)
Private Sector
50%
Share holder
Agreement
Company
Banks / FI
Concession
NCRTC
Revenue
Share
R&R
and Ops.
Company (Pvt.)
Lenders
Land Acquisition
Bridges and
Stations Bldgs.
Revenue
- Fare
- Ad
- License
- TOD
Technology
SPV
Loan Agr .
Alignment &
Formation
Lenders
EPC Contracts
(JICA /WB/
ADB)
Civil Maintenance
sub - contract
P - Way, Traction
and Power
Rolling Stock
Rolling Stock,
E&M
Maintenance
sub - contract
Signaling and
Telecom
81
Utilities
Some other Implementation Models

Models
Construction
O&M
Property Dev.
Attractiveness
SPV
Higher
Public Sector Model

Public Sector
SPV
SPV
Public Private Partnership Models

O& M by Private sector
SPV
Private
SPV
Moderate
VGF
Private
Private
Private
Limited
Annuity
Private
Private
Private
Limited
Grant During
Operations
Private
Private
Private
Limited
Only Property Dev. by

private sector
SPV
SPV
Private
Limited
Private
Moderate
Revenue Share Model

Revenue Share
SPV and Pvt.

Sector
Private
82
Lessons Learned
Understand the various options in Project financing
Know the problems and challenges in selection of appropriate options for
Project implementation
Know the various Public Private Partnership Models
Understand the advantages and limitations of PPP including various PPP
models
Understand the reason for PPPs an attractive option to governments
Know the basic structure of a PPP arrangement
Understand the latest PPP Process in India - National Public Private
Partnership Policy 2011 (Draft)
83
Questions??
84
Thank You!
85

Planning
in Urban Transport
Session 4: Contracting options for
Urban Transport
Infrastructure
86

The objective of this session is to introduce the participants to:
Need for PPP in urban transport infrastructure
Contracting options for urban transport infrastructure
Designing the RFP for urban transport infrastructure
Designing a contractual framework and Concession Agreement
Case Studies
87
Components of Urban Transport Infrastructure

Bus stops
Bus Stations/ Terminals
Bus Depots
Multi-level Parking
Road Infrastructure
88
Contracting Options
EPC / Cash Contract Mode: State Undertaking / SPV intend to
create / upgrade the facilities Design Parameters fixed by Administrative Department (AD)
Bids are called on BOQ / Item Rate Contract basis
Supervision with AD
Funds for development to be arranged by the AD
89
Public Private Partnerships (PPP) vs. Engineering Procurement

Construction (EPC) Contracts
EPC
Project is implemented by a public/ Government
agency. Herein, private goods/ services can be
procured by the public agency by competitive bidding
process. Though private sector wont be allowed
entailed as a revenue share stakeholder.
PPP
An arrangement between the public and private
sectors with clear agreement for delivery of public
infrastructure and/or public services, revenue and
risk sharing.
BENEFITS
NEED FOR EPC

Guaranteed Price
Speedy, Efficient and Cost-effective delivery of

Projects
Guaranteed Timeline for Completion
Higher Performance Incentives
Specified Level of Performance
Better Value of Money
Single Point of Responsibility
Competition and Greater Construction Capacity
Post-Commissioning Services
Higher Accountability
Flexibility and Certainty
Better Risk Allocation
Higher Supervision and Control
Government Support
90
Source: http://ecurrentaffairs.in/blog/special-article-on-epc-mode-vs-ppp-mode-for-national-highways/
Contracting Options
PPP Mode:
Mode developing facilities through offering the project to Private Sector
Player (PSP), by giving it the right to earn revenues / user charges from the
project, for a defined concession period
a) Management Contract (O & M)M) Contractual arrangement for the management of a part or whole
public facility or service by the PSP.
Capital investment is typically not the primary focus in such
arrangements
Revenue retained by the AD, the PSP gets a fixed fee for O & M
91
Contracting Options
c) Lease Contracts
Asset is leased by AD to PSP
Involves building an asset, transferring it to the Govt and leasing it back
PSP delivers the service and collects user charges, intern may offer a
fixed fee to the AD
d) Build Operate Transfer (BOT
(BOT/
BOT/ BOOT) Contracts
Design frozen by the AD
The bidding Parameter can be Concession Period / Annual Concession
Fee / Upfront Premium / Revenue Share
Private partner has the responsibility for construction and operations
Ownership is with the private partner for the duration of the concession
For example, Ludhiana, Amritsar & Jalandhar Bus Stands
92
Contracting Options
e. DesignDesign-BuiltBuilt-FinanceFinance-OperateOperate-Transfer (DBFOT
(DBFOT)
DBFOT)
PSP responsible for designing, financing, construction, and operations
Bidding Parameter can be Concession Period / Annual Concession Fee /
Upfront Premium / Revenue Share
Sub-leasing rights with the PSP for the concession period
Right to Escrow the revenue for raising the Finances.
Mohali Bus Stand, Himachal Bus Stands (Una, Hamirpur, Parwanoo)
Most Preferred mode of development appropriate risks transferred to PSP
93
Deciding mode of Contracting

Need for a particular infrastructure facility
Scale of development, and Greenfield / Brownfield development
Need for PSP considering the Value for Money (VFM) analysis
Balance between viability and welfare objectives
However, the most preferred mode of Development of Bus Terminus
Projects for State Undertakings is DBOT mode as this distributes the risk
among stakeholders.
94

Modes
Urban Rail Transit
Primarily Government funded except in case of high density and above ground construction
where PPP maybe feasible with VGF
Public Sector Model; Revenue Share Model; PPP Model
Bus Rapid Transit

System / City Bus
Service
Bus provisioning by Central Government/State Government.

Infrastructure provisioning by Government on a PPP basis or development of infrastructure on
a EPC
Operations and Maintenance preferably on PPP with revenue risk with Government /private
Permits to private buses for public carriage; Management contract; Net Cost; Gross Cost
MultiMulti-level Parking
Projects
Infrastructure provisioning by Private sector on BoT basis or development of facility by

Government on EPC basis
On-street & Off-street Parking Concession; DBFOT
Public Bicycle
Scheme
Cycle stations , Cycles, Control Center by Government

Bus depots/Terminal
depots/Terminal
and workshops
Land by Government
Network
Improvement
Existing roads up-gradation by Government

New roads/ links : Government or PPP basis
BusBus-QueueQueue-Shelter
Private Sector Party (PSP) develop Bus-Q-Shelters by undertaking Construction, Operation &
Maintenance and Transfer (BOT) to Government agency thereafter. The Concessionaire would
be permitted to earn revenue from advertisement; Kiosk and Toilet will have to pay
Concession Fee
95
Contracting-Urban Rail Transit System

Modes

Public Sector Model : Implementation of the project components and the associated risks are borne by the
Government, by forming an SPV. SPV shall also be responsible for operation and maintenance, and revenue
collection from the system. e.g. Delhi Metro.
PPP Models : In case of high ridership and above ground construction where PPP may be feasible with VGF,
the project may be implemented on PPP basis. e.g. Hyderabad Metro.
Urban Rail
Transit
In a PPP model, full or partial projects are implemented by the private sector and the capital and operation
expenditure is recovered either through right to revenue streams or through annuity payments by the
Government .
Revenue Share Model : In case the system is exceedingly viable, the project can be bid out to design, build,
finance, and operate (DBFO) the system. SPV can be created with equity contribution from State/ Central
Government or private parties. This SPV would promote/implement the project as owner. Some of these
arrangements could be in the form of PPP whereby some part of the risks and revenues are shared.
Scope of the Project
Tenure of Contract
Role of the Contractor (Construction, Designing, Financing, O&M)
Salient
Features of
Contract
Role of the Government (Depending on Implementation Model)

Performance Standards
Terms of Payment
Risk Mitigation Strategies
Bidding Parameter (Monthly /Annual Subsidy/premium payments or revenue share)
96
Contracting- Bus System

Modes

Bus provisioning by Central Government/State Government
Infrastructure provisioning :
Bus Rapid
Transit
System / City
Bus Service
By Government on a PPP basis, where either or both Government and private sector share
revenue risks
Development of infrastructure on a EPC contract
Permits to private buses for public carriage
Management contract
Net Cost Contract
Gross Cost Contract
Tenure of Contract
Salient
Features of
Contract

Terms of Payment
Bidding Parameter (Monthly /Annual Subsidy/premium payments or revenue share or on payments
per km basis)
97
Contracting- Multi-level Parking Projects

Modes

On-Street Parking Concession: On street parking in different zones are managed by different operators. A
lump sum consideration amount for the concession (period) is taken upfront at the start of the concession
and some kind of monthly charges, from the Concessioner.
MultiMulti-level
Parking
ProjectsProjects- On
Street
Parking/ At
Grade/ MultiMultilevel Parking
Off-Street Parking Concession: The Concessionaire is selected through a bidding procedure. By defining the
minimum concession conditions in the contract, the ULB may incorporate some provisions for the
improvement of the property, as well as other related obligations
On-Street & Off-Street Parking Concession: A concession for both on- and off-street parking can be granted
simultaneously
DBFOT: The ULB provides land (which is municipal property) for the project. The private investor is responsible
for designing, organizing, financing, and constructing the required infrastructure and facilities, based on
previous studies or projects.
Infrastructure provisioning by Private sector on BoT basis or development of facility by Government
on EPC basis
Tenure of Contract
Salient
Features of
Contract

Performance Standards/ Retrieval time
Terms of Payment
Bidding Parameter (Maximum ECS, Premium/subsidy, Revenue sharing)
98
Contracting- Bus Depots and Terminals

Modes

EPC: State Undertaking intends to create / upgrade facilities. Design Parameters fixed by Administrative
Department (AD). Bids are called on BOQ / Item Rate Contract basis. Funds for development to be
arranged by the AD
Design-Built-Finance-Operate-Transfer (DBFOT): Private Sector responsible for designing, financing,
construction and operations. Bidding Parameter can be Concession Period / Annual Concession Fee /
Upfront Premium / Revenue Share. Right to Escrow the revenue for raising the Finances. Eg: Mohali
Build Operate Transfer (BOT): Design frozen by the AD, the bidding Parameter can be Concession Period
/ Annual Concession Fee / Upfront Premium / Revenue Share. Private sector has the responsibility for
construction and operations and ownership during concession period. e.g. Ludhiana
Lease Contracts: Asset is leased by AD to PSP. Involves building an asset, transferring it to the Govt and
leasing it back. PSP delivers the service and collects user charges, intern may offer a fixed fee to the AD
Management Contract (O & M): Contractual arrangement for the management of a part or whole public
facility or service by the PSP. Capital investment is typically not the primary focus in such arrangements.
Revenue retained by the AD, the PSP gets a fixed fee for O & M
Bus Depots and

Terminals
Salient Features
of Contract

Tenure of Contract
Terms of Payment
Bidding Parameter (Highest premium/ revenue sharing/ shortest concession period)
99
Need for PPP in Bus Terminals/ Depots

Constraints faced by STUs- Lack of Basic Passenger amenities like
clean toilets, covered passenger concourse area, designated parking
lots, robust PIS etc
Heavy O&M costs- for bus terminal buildings and related facilities
Lack of funds for up-gradation and provisioning for modern
technologies and amenities
100
Value through PPP

Creation of State-of-Art Infrastructure / Services for Users
Better design / segregation / safe design
Introduction of Best Management Practices for O & M
Self-Sustaining through optimum utilization of valuable land and
available sources of Revenue from Bus Terminals
Additional source of revenue for state undertakings which can be
utilized for CBS / Non-PPP able components / small depots
101
Bus Terminus Developed on PPP

No
Name of
Project
Project Area
Components
8 acre
(Rs 15 Cr2001)
35 bus bays, 100 ideal

parking Passenger
amenities
Limited Commercial
Adda Fee to PSP
Manali Bus
Terminal,
Himachal
Pradesh
4 acre
(Rs 100 Cr2012)
Zirakpur Bus
Stand , Punjab
1 acre
(Rs 4 Cr)
Transit bus stand

Bus Lay bus & Parking
Ludhiana Bus
Terminal,
Punjabi
35 bus bays
30 idle paring
Local bus bays
426 MLCP
passenger concourse
STU office space
Mode of
Development
BOT Mode
Remarks
Concession Period was
bidding parameter
BOQ was fixed
Sources of Revenue were
limited.
DBFOT Mode
ACF was the bidding

parameter
Difficult terrain for work
Enormous potential for
commercial development
MLCP & New Bus Stand
was the need of the town.
(EPC/ Cash
Contract)
Scale is small
Limited Revenue Sources
Further to be Converted in
O & M contract
102
Bus Terminus Developed on PPP

No
Name of Project
Amritsar Intercity Bus

Terminal
Project
Area
8.5 acres
(21.35 Cr)
Components
Mode of
Development
1,100 normal buses

and 600 mini buses a day
80-100 buses are parked within the Terminal complex
overnight.
53 embarkation and 8 disembarkation bays
The Terminal has parking provision for 54 cars, 102
rickshaws/autos
and 1838 two-wheelers / cycles and 300 passenger
seating berths. For the convenience of passengers as
well as drivers, provision for 10
dormitories has been made.
BOT
103
Multi-level Parking developed on PPP

No
Name of Project
Project Area
250 Parking
lots at Level 2
Kolkata Car
Parking system
Market
complex with
200 shops at
Level 1
Project Cost :
Rs 36 crores
Components
The pedestrian plaza on the ground

is a bonus for the pedestrians.
Street parking is no
longer allowed on Lindsay Street,
the traffic jams have become a
thing of the past.
Mode of
Development
BOOT for a period of
20 years
Simplex
pays the KMC, 5% of
the gross annual
revenue earned from
parking for the
concession
period of twenty
years.
104
Bus Stops developed on PPP

No
Name of
Project
Bus Q
Shelters in
Delhi (DTC)
Project Area
400 Bus Q
Shelters at
various
locations in
Delhi
Components
Construction of Bus- Q- Shelters
Operation and Maintenance of Bus- QShelters
The essential services to be provided by the
Concessionaire.
Collect revenues during concession period
through advertisements and pay
Concession Fee as indicated in their
financial proposal
Transfer of Bus- Q- Shelters to DTC in sound
condition at the end of Concession Period.
Pay shifting/relocation/dismantling charges
@ Rs. 50000/- (Rs. Fifty thousand only) per
BQS to DTC in respect of existing BQS.
A uniform rate of Rs. 50000/- per existing
BQS will be paid by the concessionaire
irrespective of whether the BQS is actually
relocated/dismantled/scrapped.
Mode of
Development
BOT Basis (10

year concession
period)
105
Contracting framework for Bus

Terminal
106
Contracting Framework
107
Source: Case Study Development Oo Modern Bus Terminal at Amritsar Transport Infrastructure, Infrastructure Development
Department : Government Of Karnataka
Recommended Structure & Checks

As DBOT is the most widely followed model, wherein the design flexibility
rests with the PSP, it is recommended to keep certain checks on the
development envisaged by determining Minimum Development Obligations
While approving the design for the Bus Stand, the following components
should be made intrinsic:
S.No
Components to be Mandatorily Provided in Bus Stand
Bus Bays including the Alighting, Boarding/ Local Bays
Number to be defined
Idle / Night Parking Bays
Bus Circulation Area
Area in Sqmt
Passenger Concourse Area
Area in Sqmt
Inquiry Office/ Reservation / Ticketing Counters
Tourist Information Center
Area in Sqmt
108
Minimum Development Obligations

S.No
Components to be Mandatorily Provided
Clock Room / Pass Room
Area in Sqmt
Administrative Block ( to be transferred to AD )
Area in Sqmt
Rest Room for Crew Members
Number of Beds
10
Rooms for Private Operators
Area in Sqmt
11
Waiting Hall (General/ Ladies )
Seating capacity
12
BOT office
Area in Sqmt
13
Control Room / IT room
Area in Sqmt
14
Toilets
15
Parking for Govt Vehicles
Number of ECS
16
Paid Parking (Two Wheelers / Car Parking )
Number of ECS
17
Open Seating Area
Number of Seats
18
Canteen / Restaurants
Area in Sqmt
19
Dormitory
Number of Beds
109

S.No
Components to be Mandatorily Provided
20
Ramp for Handicapped
Slope to be defined
21
Wheel Chairs
22
Trolleys for luggage
23
Rooms for Private Operators
Area in Sqmt
24
Police Security Check Post
Area in Sqmt
25
Post Office/ ATM/ First Aid Center
Area in Sqmt
26
Dustbins
Number per bay
27
Display Boards
28
Digital Clock
As per number of bays
29
Yard Control Area
Area in Sqmt
30
Allowed Commercial within Passenger

Concourse
Percentage of concourse area
110

S.No
Components to be Mandatorily Provided in Workshop
Office of General Manager
Area in Sqmt
Cash Branch Office
Office Space for Support Staff
Rest room for drivers & support Staff
Area in Sqmt
Dormitory
Number of Beds
Space for Diesel Fueling Station
Area in Sqmt
Automatic Washing provision / Greasing dugs
Number per bay
Water Storage Capacity
Workshop Shed
Size in sqmt
10
Store room with shelf/ Tool Room
Area in Sqmt
11
Generator Rooms and control room
Area in Sqmt
12
Basis Amenities like toilets/ Canteen / pooja room
Area in Sqmt
111
Lessons Learned
112
Lessons Learned
Some of the lessons / shortfalls experienced in the bid out bus stand
projects on DBOT/ DBFOT mode have been categorized as related to:
A.
Project Structure
B.
Concession Agreement
C.
Design Approval
113
Lessons Learned
A.
contd. 2
Project Structuring Related :
i.
Site Clearance: AD should clearly demarcate the site before bidding

indicating clear ownership / titles for site.
ii.
Right to Sublease: In most cases, land for use of bus stands is

transferred from State Govt. to transport undertakings; however, it is
observed that right to sublease the site for any other use is missing
in the said agreements, which becomes an obstacle during its
bidding on PPP.
114
Lessons Learned
iii.
contd. 3
Traffic Surveys :
Traffic assessment for government / private buses
Accurate peak hour traffic assessment and projections
Distribution of long route/short route buses and local city buses
Parking assessment (onsite / offsite) to be made part of traffic

surveys for assessing the requirement of parking space for buses
as well as for commuters vehicles.
115
Lessons Learned
iv.
contd. 4
Zoning for the project:
Zoning should bring out FAR, Ground Coverage, Frontage for

Commercial use and setbacks
Ground coverage for the bus stand project should be ideally be not
more than 40%
In case of Bus Terminals with Workshops, area and location of

workshop should be clearly defined
Limit / Define the extent of allowable frontage for commercial complex

/ activities in the Project
116
Lessons Learned
contd. 5
Value for Money (VFM) Analysis:
iv.
Often it is observed that the State Undertakings benchmark the

financial bid against a notional value of their asset (land) offered for
the Project and bids are rejected on these grounds
VFM analysis for the Project should determine the range of viable
bids which should further be internally approved by the
Concessioning Authority and considered while deciding / negotiating
the financial bids
117
Lessons Learned
B.
contd. 6
Concession Agreement Related:

i.
Bays required, Idle Bays required, Passenger concourse area, etc.

should be defined upfront
Maximum commercial space allowed in the Project should be

defined
Allowed Optional components should defined
This will give clarity to the Independent Engineer and Design

Approval Committee for setting the parameters for evaluating
the design
118
Lessons Learned
ii.
contd. 7
Bid Parameter:
For Bus Stands projects where viability depends on commercial
components, Annual Concession Fee should be a preferred mode in

comparison to Up-front premiums
Higher returns in terms of NPV
iii.
Concession Period:
Should be determined by keeping in view the following:
Scale of Development Envisaged
Location of the Project
Allowed Commercial Area in the Project
In longer concessions, the PSP tends to take major chunk of return in
terms of upfront deposits

119
Lessons Learned
contd. 8
Minimum Lease Rentals (MLR)
iv.
Average commercial rentals in bus stands ranges between

Rs 30-60 per sq ft
Provisions for minimum lease rentals should be there in the

RFP
In absence of minimum lease rentals, PSP shall have the option

to recover the investment through upfront deposits. This will
create risk for the Govt. in case if need for substitution arises in
the project
MLR can be defined as =

Annual Concession Fee / Allowable built-up area
120
Lessons Learned
contd. 9
Fee Structures:
v.
Adda Fee and Night Parking fees should be approved by the

concerned government department before bidding on the project.
Pricing of Adda fee should be based on the category of buses
e.g. in case of Himachal where short distance private buses constitute

more than 70 % of the total trips, one-time adda fee of Rs 100 is
charged for 24 hours.
In Punjab, where private route permits are greater in percentage

terms, a Rs 40-60 per entry is charged, with no fee from the Transport
undertakings buses.
CBS operations should come under one-time fee structure.

121
Lessons Learned
vi.
contd. 10
Eligibility Criteria:
Criteria:
In addition to the guidelines given in MCA, certain criteria have
been found to increase the participation in the bidding process.
These are:
High Net worth Criteria Large Scale Projects
Sole Proprietorship Firms Small Projects
122
Lessons Learned
contd. 11
Design Approval related
C.
The members of the Design Approval Committee shall be well

versed with the rationale of PPP Projects.
The members of the Design Approval Committee should also be

part of the committee that approved the project before bidding.
Undue questioning of the Concessionaire in design-related

matters where other conditions of the RFP are satisfied by him
shall be avoided.
123
Contracting options for urban

roads
124
Contracting options for urban roads

Engineering Procurement &
Construction Contracts
Urban road projects are implemented
on EPC mode, when the project is not
viable on PPP basis. This mode is
different from the conventional item
rate contracts wherein the Government
provided the detailed design along with
the Bill of Quantities.
BOT Model
Under the BOT contract, the private
party will be responsible for
designing, engineering, financing,
procuring and constructing the road
during the construction period.
During the operation period, it will
be responsible for managing
operation and maintenance of the
project road until the end of the
concession period.
125
Incentives for private sector participation in the road sector

in India
Government bears expenses for land acquisition and pre-construction
activities;
Foreign direct investment up to 100 percent;
Capital subsidy up to 40 percent to meet the viability of a project;
Government equity up to 30 percent;
100 percent tax exemption in any consecutive 10 years;
Duty-free import of road construction equipment;
Bond exempted from capital gains tax;
Tax benefits for property development activities;
Transparent and well-defined procurement procedure;
Equitable dispute resolution mechanism.
126
PPP in Urban Road - Thiruvananthapuram City Roads

Improvement Project
The project was attempted as a life cycle approach to road
improvement, making the Concessionaire responsible for long-term
maintenance of the roads.
The project envisaged expanding, strengthening, and upgrading some
of the arterial roads of the city, keeping in mind the likely growth in
traffic over the next decade and was structured on an annuity (semiannual) basis, since tolling within the city was not feasible.
The Detailed Project Report (DPR), technical designs, drawings and
estimation of costs were prepared by the Concessioning Authority.
127

Improvement Project
The following are the project risks and their allocation between the
Concessioning Authority and Concessionaire:
Construction Risk: overruns due to contractor default, was borne by the
operator. Overruns due to delays in handover by PWD, Kerala were
borne by PWD, Kerala. Accepting/modifying designs borne by the
Concessionaire
Investment Risk: Investment risks in the project were mitigated through
a fixed annuity payment structure, assuring regular returns to the
Concessionaire.
128

Improvement Project
Performance Risk: Borne by the operator through mechanisms for
penalties for non-compliance with contractual commitments such as
Assured Availability and project timelines and through a performance
guarantee.
Policy Risk: The Concessioning Authority bore all responsibility for changes
in policy regime or scope of the project and all related remuneration
thereof.
129

Improvement Project
130
Source: Thiruvananthapuram City Roads Improvement Project, Transport Infrastructure, PPP India, Ministry of Finance, GoI

Improvement Project
Lessons
Dedicated funding mechanism, such as the Road Fund created in
Kerala for the TCRIP project, to increase the comfort level of the private
sector for participating in such projects.
Importance of structuring operator remuneration in a way that
monitoring is in-built into the mechanism and quality services
Timely provision of land remains one of the key requirements . Failure of
the in that may result in extra financial liabilities for the Authority,
resulting in wastage of public money.
131
Contracting options for Bike

Sharing Schemes
132
Public Bike Sharing

For implementation of Bike Sharing Scheme in Indian cities, MoUD
has prepared a model concession agreement on Public Bicycle
Scheme on Built Operate and Transfer Basis (BOT) format
As per this concession agreement, Public Bicycle Scheme shall be
developed on Public Private Partnership (PPP) format on Design,
Build, Finance, Operate, and Transfer (DBFOT) basis.
However, the implementation structure could vary on a project by
project basis.
133
Questions??
Questions??
134
Thank You!
You!
135

Planning
Session 5: Contracting options
for Public Transport
Infrastructure

The objective of this session is to introduce the participants to the
following aspects of Contracting in Public Transport (Bus and Rail
sector):
Types of contracts
Pros and Cons of Contracts
Selection of an appropriate model
Appraisal of contracts
Fate, Issues, and problems with recent PPP attempts
137
A Cycle of Privatization in Passenger Transport
RTC Act, 1950

Before 1950
1950-1980
Private Sector
Public Sector
1980 onwards
Public Private Partnership

2005 onwards
138
Private Sector in Urban Road Transport: Evolution and

Growth
7th Five yr. Plan (1985-90)- Exclusive focus on urban transport
Delinking of urban services from rural/inter city services of STUs
Urban services an unviable proposition
Loss making STUs keep showing interest in rural/inter city services
Options for involvement of Private sector were explored
139
Early attempts at privatization in city bus services: Delhi

Gross Cost
Cluster Scheme launched in
2009 on Gross Cost model.
The Blueline Era: Small-scale private
operators given permits for operation
Unfair practices, unregulated operations.
Scheme ended in 2009.
Net Cost
Kilometer Scheme relaunched in 1979

with higher acceptable Hire Charges.
Continued successfully until agitation by
DTC workers against collection of fare in
private buses
Eventually converted to Charge n Retain
Net Cost Model.
Got phased out owing to increase in input
costs and infrequent fare revision.
Gross Cost
Conceived and launched in

1964 as Kilometerage
Scheme
Hire Charges not acceptable
to Private Operators
Scheme failed.
Net Cost
AOCC Scheme launched

after failure of Kilometerage
Scheme
Overlap of routes with DTC led
to unfair practices on roads
Scheme called off in 1976.
140
The case for Public-Private-Partnership: Recent trends
Policy thrust towards PPP in city bus operations in 2005
National Urban Transport Policy, 2006
Bus-funding scheme & Jawaharlal Nehru National Urban Renewal

Mission (JnNURM)
61 cities, 27 Special Purpose Vehicles (SPVs)
141
City Bus Operations through PPP: recent attempts

Basic philosophy behind PPP: Distributing to each the functions they
are best capable of performing
Began with Indore Model
Private Domain
Public Domain
Planning
Infrastructure
Development
Operation
City Bus Operations
142
Monitoring
Regulation
Types of Contracts
Less Regulation
Public Monopoly
Gross Cost Contract
Service Contract
Net Cost Contract
(Most commonly used in Urban

Bus Transport)
Less Public Funding
Competition for the Market
Franchises
Concessions
Quantity Licenses
Quality Licenses
Open Market
ParaPara-Transit
Competition in the Market
143
Type of contract
Service Contracts
Cost Plus
Gross Cost
Net Cost
Area Based
Route Based
Route Based
Kilometerage
Cost
Minimum
Cost
Cost per
Passenger
Operator states the unit

costs of the service
(cost per km, per hour or
per vehicle day)
Operator states the

whole cost of
operating the
contract
Operators are
repaid based on the
cost per passenger
e.g. Santiago (Chile)
e.g. Helsinki (Finland)

e.g. Gothenburg
(Sweden)
AMTS
JANMARG
SITILINK
BOGOTA
Delhi -cluster
e.g. London
(before 1993)
Area Based
Min. Subsidy/
Max. Premium
Operators states minimum
subsidy required or maximum
premium offered to the
authority
e.g. London
(after 1993)
Surat, Rajkot, Indore,
Vadodara, Jodhpur, Delhi-Blue
Line, Delhi Metro Feeder,
Bhopal
144
Cost plus Contracts

The public authority reimburses operating costs plus a management
fee
The fares are collected by the public authority
The operator does not bear either cost or demand risk
145
Cost plus Contracts Pros and Cons

Pros
Cons
Contracting is simple
No incentive for operator to reduce costs,

increase patronage or improve efficiency
Flexibility in change in services
Difficult for SPV to monitor costs

Revenue collection with SPV
146
Suitability of the Arrangement Gross Cost Contract

Authority has the resources to mange the revenue collection activity
effectively
Avoid on-street competition for passengers
Wants to establish a sustainable procedure to constantly test the
market (flexibility in changing the route, schedule, fleet size)
Facilitate integration between modes
Provide free or discounted interchange between all routes in all areas
Avoid discrimination against concession fare passengers
Greater compatibility with complex subsidy mechanism
Avoid the need to apportion off bus revenues between operators
147
Gross Cost Pros and Cons

Pros
Cons
Easy bid process and contract

management
Risk of revenue leakage borne by public

entity
Flexibility in changing schedules

based on needs
No incentive for high ridership
Flexibility in changing fares
Need effective monitoring
Flexibility in changing in services
Financial commitments of public

authority can be high
Limited potential for disputes
Higher cost of staffing, monitoring

operation & revenues
Better integration between

modes/services
Avoid discrimination against
concession fare passengers
148
Gross Cost with Incentives

Quality Incentives
Typically gross cost contracts with significant bonuses or penalties
linked to service targets
Revenue Incentives
Typically gross cost contracts with incentives linked to revenue
targets
149
Suitability of the Arrangement Net Cost Contract

The demand for the bus service is established in an accurate and credible
manner
The transport authority does not have the inclination and/ or the resources to
mange the revenue collection activity
The transport authority intends to transfer the demand risk to private sector and
the private sector has the appetite to take and manage the risk
The authority wishes to give the operator an incentive to increase revenue and
ridership
The authority is comfortable on giving the operator some flexibility to amend
routes and schedule to make the network as attractive as possible
Not possible in the environment of unregulated externalities and regulated fare
Not suitable in unregulated IPT market
150
Net Cost Pros and Cons

Pros
Cons
Risk of revenue leakage borne by

operator
Risk of passenger capture techniques being

adopted
Effective incentive for high ridership
Need to specify fares and other details

upfront
Financial commitments of public

entity are low
Complex tendering and contracting process

Difficult to make changes (route, schedule,
fleet size) during contract period
Potential for disputes high
151
Contract documents Gross Cost

Duration
Fare revision
Cost revision
Provision of infrastructure
152
Contract documents Net Cost

Duration
Fare revision
Cost revision
Provision of infrastructure
Change in routes
Change in service plan
153
Selection of appropriate model

Selection of contracting model depend on various factors:
Capacity (financial as well as human resource) of public authority
Risk appetite of private operators
Legal and regulatory framework
Competition from informal and IPT sectors
In Indian context, gross cost contract with quality incentives most
appropriate
154
Fundamental of Operations Contract
Duration of services, scope of services

(including operating schedule, time schedules, routes)
Compliance with all laws, standards and requirements
Performance standards
Reporting obligations
Penalties and incentives
Financing and provision of additional services
Provision of infrastructure facilities
Sharing of non fare box revenues
Cost and fare revision mechanism
155
Quality Indicators
Possible quality indicators
Fleet utilization
Vehicle utilization
Up-keeping of the bus
Adherence to schedule, punctuality
Crew behavior, driving practices
Customer information
Customer service
Equipment, special services
Rate of accidents
156
Case Study - Bhopal

SPV contracts and monitors
Hand holding support by UMTC
Buses procured by SPV (funded under JnNURM) and contracted to
private operator on net cost basis
No subsidy from SPV
Exclusivity provided on routes initially but not enforced
Automatic fare revision formula but not implemented
Issues with expansion of service
System sustainability: marginal profit
157
Case Study Ahmedabad, BRTS

Buses procured by operator and operating on gross cost +
incentives basis
Minimum guaranteed kms committed by SPV
SPV has financial as well as manpower support from MC
Fare revision linked to change in fuel price & WPI, periodic revision
on 1st April of every year
Cost/km revision wrt change in fuel & WPI
Incentives/penalties linked with pre-defined performance
parameters
Change in schedule, fleet size at the discretion of SPV
System sustainability: breaking even
158

PPP Responsibility Matrix for BRTS Components
Construction
/Supply
No
Component
Operation
Construction of
Stations / Corridor
/ Fly overs
Fixed Time/ Fixed

Rate Contract
Buses
Buses hired for 7

years from Operator
Bus Operator
Fare Collection and

IT Systems
Service Provider
Service Provider through annuity. Oversight by Janmarg
Sky Walks
Parking
Management
PMC.
Janmarg/
Operator
Maintenance
Presently
under Defect
Liability Period
Bus Operator
Concessionaire under oversight by Janmarg

Parking constructed
as part of corridor
Pay and Park

Operator
Operator overseen
by Janmarg
Pay and Park

Operator
Hardware elements
like Sliding
doors/turnstiles
Supplier
Janmarg /
Service
Provider
Janmarg / Service
Provider
Supplier
through AMC
Advertisement
Rights
Licensee
Licensee
Janmarg
Licensee
House Keeping
Janmarg
Service
Provider
Landscaping
Janmarg
Licensee
Licensee
159

Intelligent Transit Management System (ITMS) - Integrated Overview
160
Source : Janmarg, Ahmedabad

Intelligent Transit Management System (ITMS) - Conceptual Overview of
AJL ITMS
161

ITMS Contract
Scope of the Service Provider
Integrated contract comprising the installation, commissioning, operations
and maintenance of the following
Passenger Information System (PIS )
Automatic Fare Collection System (AVLS)
Automatic Vehicle Operating system (AFCS)
Financial Management System (FMS)
Decision Support Systems (DSS)
Fare Collection at the Bus Stations
Operations of the Central Control room including
Fleet and System Monitoring
MIS and Reporting
Integration with Depot Operations
Provision of
Maintenance of A Disaster Recovery Center
162

ITMS Contract
Contract Design
Purchase of Hardware and Software on outright purchase basis
Monthly payments for Operations and Maintenance of Hardware and
Software (payment per bus, bus station and for CCC)
Monthly payments for Fare Collection Operations at Bus Stations and
other Manpower needs for CCC
Monthly contracts for 72 months
Challenges in terms of deciding whether to adopt BOT method
The first bid issued followed a mix of Supply cum Maintenance on BOT.
Second bid issued follows a pure Supply and Maintenance removing BOT
part
Qualification of Bidders
Technical Experience in AFCS, PIS or AVLS for Lead Member
Presence in Information Technology Industry
Criteria for Size (Financial Turnover),
163
Case Study - Jaipur

Buses procured by SPV (funded by JnNURM) and operated by RSRTC
on reimbursement of cost basis
Fare collected by conductors of SPV
SPV has no resources for monitoring
No Fare revision mechanism
Performance parameters- not defined
System sustainability: in loss
164
Case Study Mira Bhayandar

SPV (MBMC) contract & monitor
Financing of buses by private operator
Royalty offered- Rs 1/km (Rs 180/bus/day) for 10 year
Revenue to SPV (FY 11-12)- Rs 3.6 million
Increase in royalty linked with increase in fare
Fare revision mechanism- not defined
Infrastructure for maintenance- by operator
Performance parameters-defined
165
Recent Attempts in PPP: Issues

Change in the routes by the
operators from the original routes
Over crowding of passengers in

peak hours
NonNon-adherence to the schedule &

routes
Low level of participation during

bidding
Original routes found unviable
Underestimation of fleet size
Lack of effective monitoring
High risk anticipation
Lack of confidence among the

commuters
Operators only for viable routes,

Monopoly in service
Lack of infrastructure
Image of the system affected

Life of buses goes down
Necessity not appreciated
Lack of ownership of the overall

system
To prevent situation of STUs

Skeleton Staffing in the SPV
Adverse for the image of public

transport
No mechanism for increasing the fleet size
Poorly maintained buses
Absence of dedicated top level

management
No service on unviable routes
NonNon-delivery of regulatory functions
166
Absence of Fare Policy
Private sector doesnt show much

interest
Absence of Fare
policy
Private operator quotes low license

fee
Unwarranted practices post

inception of operations
167
Absence of Robust Institutions

Officers having additional responsibilities with
short tenure short vision
Skelton structure of SPVs (2-3 employees with
no job commitment)- ownership
Absence of
Robust Inst.
Not efficient to deliver the functionsmonitoring

Allocation of resources (land, right of adv.)maintenance & sustenance
Minimal paid up capital- no financial
independence
168
Inadequate Operation Planning
Routes changed after inception

of operations
Inadequate
Operation on only profitable
operations
routes
planning
Only viable routes bid out
169
Food for Thought.for Sustainable PPP
Before Contracting
Identification
Identification of viable/unviable
routes and formation of clusters
Have
Have a business plan ready
(expenditure vs revenue~
affordability ~type of bus)
Identification
Identification of suitable PPP
model depending on
route/cluster viability
Provision
Provision of depot land &
infrastructure for maintenance
Exclusive
Exclusive administrator in SPV
with no additional charge and
longer tenure
Minimum
Minimum staffing in SPV for
monitoring and regulation
During Contracting
Fare
Fare revision & its
implementation mechanism
in place
Compensation
Compensation against
concessions
Concession
Concession period design
life of the bus
Include
Include all components of
cost inputs while revising the
cost/km (Gross cost)
Provision
Provision of Initial Moratorium
period (4(4-6 months)months)- Net cost
Link
Link incentives/penalties with
Service quality parameters
After Contracting /during

operation
Frequent
Frequent monitoring of
patronage for dynamic
route/schedule planning
Penal
Penal action (or provision) for
freebees or defaulters
Facilitate
Facilitate coordination with
other departments i.e. traffic
police, RTO
Safeguard
Safeguard patronage through
rationalization or regulating IPT
SPV
SPV should play a role of a
facilitator rather than a
regulator
170
PPP in Urban Rail
1. Government-owned/DMRC Model
2. BOT/PPP Model
3. Hybrid Model
172
Government-Owned model
State Govt.
Multilateral
Funding
Agency
GOI
50% Equity each
Loan
SPV
To design, finance, implement, operate & maintained the system
173
Pros & Cons: Government Model

PROS
CONS
Established Model in the country
Large budgetary outlays required by both

government
Various administrative mechanisms for monitoring &

approvals are in place
Recurring annual financial burden for o & m
Presence of central government in the SPV helps in

transferring experience from other metro systems
Limited possibilities for pvt. sector efficiencies
Being Government project, political risk mitigated
Sovereign guarantee for debt may be needed
Flexibility in deciding the fare with Government
Government capacities at state level to manage

such large scale construction & operations limited
State/Central govt. would need to waive taxes &
duties
Resources for o & m of the project
174
Examples: Govt.-owned Models

Delhi Metro
Bangalore Metro
Kolkata Metro
Equity of GOI &

State Govt.
Chennai Metro
Jaipur Metro
Mumbai Monorail
State Govt. Owned
175
PPP/BOT Model
Concessioning Authority
Grant/VGF
Concession
Agreement
Concessionaire ( A 100% Pvt. SPV)
To design, finance, implement, operate & maintained the

system
Transfer at the
end of
Concession
Period
176
Pros & Cons: PPP/BOT Model

PROS
CONS
Private Sector capacity harnessed by

transferring the responsibilities for Return below market expectations could lead to
Design, Finance, Construction, and poor response from PSP
O&M
Greater acceptability at Govt. Level
Ridership assessment linked with development

phases-delay/failure, which may trouble the
project
Large scale subsidy/VGF is called for, and
securing could be cumbersome
Packaging Real Estate components exposes
Project to vagaries of the real estate market
risks
No control of Govt. on fare
177
Hyderabad Metro
Concessionaire : L&T
Cumulative Length: 71.16 km
Project Cost: Rs 12132 Cr.
Govt. Grant: Rs 1458 Cr.
Concession Period: 35 years (with extension for 25 years)
Govt. owns Golden Share in SPV- one representative on Board with affirmative powers
Real Estate Development at:
3 Depots : Total cumulative area- 11.61 Lakhs sqm.
25 Stations: Total cumulative area- 5.57 Lakhs sqm.
Automatic Annual Fare Revision linked with WPI
Revenue Share with Govt: (Ceiling 10%)
Period
Revenue Share (% of realized

revenuerevenue-net of any tax)
1st to 21st year
0.5%
22nd to 23rd year
1%
23rd onward
1.5%
178
Modalities of Implementation of Gurgaon Metro

Shareholders in Concessionaire Company:
IL&FS Rail- 48%
ITNL- 26%
DLF- 26%
Based on DBFO model
Total Concession Period: 99 years
Schedule and fare integrated with DMRC
The image part with relationship ID rId3 was not found in the file.
179
Hybrid Model
Concessioning Authority
To construct part of the
system comprising civil
works or pay in cash to
the concessionaire
against construction of
the system to this extent
Concession
Agreement
Transfer at the
end of
Concession
Period
Concessionaire ( A 100% Pvt. SPV)
To finance the part of the system, implement, operate &

maintain the system
180
Pros & Cons: Revenue Sharing

PROS
Improved Financial viability
CONS
Part investment is still required by the
Government
O&M and part investment kept with the Interfacing risk-part developed by Govt.,
PSP-thereby harnessing their efficiency in same needs to be done in a time-bound
these areas
manner
Operational Risk transfers to PSP
Political risk largely mitigated due to
significant government involvement
181
Questions??
Questions??
Thank You!
You!

Planning
in Urban Transport
Session 6: Procurement and
Contract
Management
184

The objective of the session is to make the participant aware of following
aspects of procurement
Procurement strategies
Type of Contracts
Method of Selection
E-Procurement
Model Contracts
Bid process management
Evaluation criteria
Risk assessment and Mitigation
Contract Management
Monitoring and Evaluation of contract
185
Procurement
As per the Procurement Bill 2012 of Indian Government, procurement or
public procurement means the acquisition of works, goods or services by
a procuring entity, and includes all stages of the process of acquisition, by
purchase, lease, license or otherwise, of works, goods or services,
beginning with the process for determining the need for such acquisition
and ending with completion and expiry of the procurement contract or
framework agreement, but does not include any acquisition without
consideration, and procure or aprocured shall be construed
accordingly.
186
Procurement
As per the Procurement Bill 2012:
Bill apply to Ministry or Department of the central Government, any Central
Public Sector Undertaking (50%), or authority or society or trust or
autonomous body (by whatever name called) established or constituted
under an Act of Parliament or a body owned or controlled by the Central
Government.
Bill shall not apply to procurements, which are less than INR 50 lakhs,
emergency procurements made for disaster management, and
procurement for the purpose of national security.
States Government should follow their own acts and regulations for procurement of good and
services
187
When do you start thinking about procurement?
188
Source: CRISIL Risk and Infrastructure Solutions Limited.
What should you achieve with procurement?

Process promotes healthy competition, not speculation
Award is controversy-free, publicly defendable, and transparent
Process assures level playing field and attracts available competition
189
Type of Contracts
190
Types of Contracts
Firm fixedfixed-price (Lump Sum) contracts
Price is not subject to any adjustment based on Contractors cost
experience
Maximum risk and full responsibility on the Contractor
Maximum incentive for the contractor to control costs
Highly suitable for works and services where
Adequate price competition exists
Reasonable price comparisons are available
FixedFixed-unitunit-price contracts
Contract provides for upward or downward revision of the contract price
based upon actual quantities of work performed
Procurer needs to provide adequate field force to verify actual quantities of
work performed
Highly suitable where quantities cannot be determined with reasonable
accuracy prior to actual work
191
Types of Contracts
Combined firmfirm-fixed/unitfixed/unit-price
This is a variation on a lump sump contract where a unit-rate price is offered
for some of the items for which quantities cannot be determined in advance
with reasonable accuracy
FixedFixed-price with price adjustment
Contract provides for the upward or downward revision of the contract price
upon the occurrence of certain contingencies that are beyond the control of
the contractor and are specifically defined in the contract
Use of this type of contract is appropriate when serious doubt exists as to the
stability of the market or labor conditions that will exist during an extended
period of contract performance.
It may also be appropriate when contingencies that would otherwise be
included in the contract price can be identified and covered separately by a
price adjustment provision.
192
Types of Contracts
TimeTime-andand-materials contracts
Contract provides for the procurement of goods and services on
the basis of direct labor hours at specified hourly rates and
materials at cost including, when appropriate, material handling
charges.
The charge for direct labor at specified fixed hourly rates
includes wages, overhead, general, and administrative expenses,
and profit.
It is used when it is not possible at the time of placing the
contract to estimate the extent or duration of the work or to
anticipate costs with any substantial accuracy.
193
Types of Contracts
CostCost-reimbursement contracts
This generic category of contracts provides for payment to the
contractor of allocable and allowable costs and a fee (profit).
Cost-reimbursement type contracts are suitable for use when the
nature and complexity of the procurement are such that the cost of
performance cannot be estimated with any accuracy
As this type of contract gives a minimum incentive for efficient
performance, provision must be made for appropriate surveillance to
provide reasonable assurance that wasteful methods are not being
used.
Such contracts are used only after a finding that such method of
contracting is likely to be less costly than other methods, and it is
impractical to secure the necessary goods or services without the use
of this type of contract.
194
Types of Contracts
Incentive contracts
Incentive contracts are designed to harness the profit motive to
stimulate the contractor to perform at a lower cost, to produce a
better product or service, or to cut down lead time in delivery dates.
Care must be taken to ensure that the contract is so structured that
any contract options are fair from both the contractor and the
Procurer's point of view.
Indefinite delivery task contracts
The basic purpose of a Task Contract is to provide an in-place
contractual arrangement with a competitively selected Contractor
that is ready, willing, and able to undertake a number of jobs, or
individual tasks, of the nature described in the contract statement of
work.
195
How to select type of contract

Each model has its own pros and cons and can be suitable for achieving
the major objectives of private-private partnership to a varying degree.
The most suitable model should be selected, taking into account the
countrys political, legal, and socio-cultural circumstances, maturity of
the countrys PPP market, and the financial and technical features of the
projects and sectors concerned.
As an example, for a new project, a BOT type of model may be quite
suitable in a matured PPP market, while a PFI or Build Own Operate
(BOO) type of model may be more appropriate in a developing/untested
market.
196
Procurement Process
197

Issue of EOI/RFQ
Submission of EOI/RFQ by prospective bidders
Evaluation of EOI/RFQ and short-listing
Issue of RFP document to shortlisted parties
Pre Bid Meeting
Submission of Technical and Financial Proposals by Bidders
Evaluation of Technical Proposals
Evaluation of Financial Proposals
Negotiations and Issue of Letter of Award
Signing of Contract
198
Design of the procurement process

The procurement process has the following components
A. Procurement method
Competitive bidding
Limited competitive bidding
Non- competitive bidding
B. Procurement steps
One-step process (RFP)
Two-step process( RFQ and RFP or EoI and RFP)
Three-step process (EoI, RFQ and RFP)
C. Qualification Criteria
D. Bidding Criteria
199
200
1. International Competitive Bidding
2. National Competitive Bidding
3. Limited International Competitive Bidding
4. Shopping
5. Direct Contracting
6. Procurement from Specialized Agencies
7. Procurement under BOO/BOT/BOOT Concessions and similar private sector
arrangements
8. Performance-based Procurement
9. Procurement under Loans Guaranteed by Bank
10. Community Participation in Procurement
11. Procurement under Disaster and Emergency Assistance
201
International Competitive Bidding

International competitive bidding is a method of procurement where all agencies
satisfying the qualifying criteria are allowed to bid for the contract, irrespective of
their nationality
International competitive bidding (ICB) is the most appropriate method of
procurement for large contracts
It is also suitable for contracts with need for specialized technical inputs in
most cases
Shopping
It gives prospective bidders from eligible source countries equal opportunity
to bid on goods and related services or works that are being procured
ICB is in most cases employed when the contract value is beyond a threshold
value
It is the accepted mode of procurement as per most of the multi-lateral
agencies
It is the accepted mode of procurement for contracts such as concessions,
BOT, BOOT etc.
202
National Competitive Bidding

National Competitive Bidding (NCB) limits the competing bids only from
domestic suppliers
NCB is the most efficient and economical way of procuring goods or works
which, by their nature or scope, are unlikely to attract foreign competition.
NCB may be the preferred method of procurement where
The contract values are small,
Works are scattered geographically or spread over time,
Works are labor-intensive, or
The goods or works are available locally at prices below the international
market rate.
NCB procedures may also be used where the advantages of ICB are clearly
outweighed by the administrative or financial burden involved.
203
Limited International Competitive Bidding (LIB)

Limited international competitive bidding is essentially ICB by direct
invitation without any open advertisement
It is suitable where there is only a limited number of suppliers
It is the accepted mode where the amount of contract is not large
enough to attract foreign suppliers and contractors
Under LIB, borrowers seek bids from list of potential suppliers broad
enough to assure competitive prices
204
Shopping (International/National)
Shopping is a procurement method based on comparing price quotations
obtained from several suppliers, usually at least three, to assure
competitive prices
It is an appropriate method when
The procurement is of readily available, off-the-shelf goods or standard

specification commodities
The procurement is of small value
International shopping shall solicit quotations from at least three suppliers

in two different countries.
National shopping may be used where the desired goods are ordinarily
available from more than one source in the country of the Borrower at
competitive prices.
205
Direct Contracting
Direct contracting without competition (single source) may be an
appropriate method under the following circumstances:
There is an existing contract which might be extended for related
goods and services
The equipment compatible with existing assets of the procurer is
available only from a single supplier
The required equipment is proprietary
The contractor responsible for a process design requires the
purchase of critical items from a particular supplier as a condition of
a performance guarantee.
In exceptional cases, such as in response to natural disasters.
206
Procurement from Specialized Agencies

There may be a Situations in which procurement directly from
specialized agencies, acting as suppliers, pursuant to their own
procedures, may be the most appropriate way of procuring:
Small quantities of off-the-shelf goods
Specialized products where the numbers of suppliers are limited
207
Procurement under BOO/BOT/BOOT Concessions &

similar private sector arrangements
The process of selecting the transaction advisor has the following steps:
Define the scope of work for the transaction advisor
Articulate the terms of reference for the transaction advisor
Define the structure of the selection process
Prepare the tendering/ bidding documents based on the chosen
structure
Execute the tendering process
Appoint the transaction advisor
208
Performance-based Procurement
Also called as Out-based Procurement refers to competitive procurement
processes resulting in a contractual relationship where payments are made
for measured outputs instead of the traditional way where inputs are
measures :
Provision of services to be paid on the basis of outputs
Design supply, construction (or rehabilitation), and commissioning of a
facility to be operated by the borrower
Design, supply, construction of a facility and provision for its operation
and maintenance for a defined period after its commissioning
209
Procurement under Loans Guaranteed by Bank

In cases where funding agency guarantees the repayment of a loan made
by another lender, the goods and works financed by the said loan shall be
procured with due attention to economy and efficiency.
210
Community Participation in Procurement

In the interest of project sustainability, or to achieve certain specific
social objectives of the project, it is desirable in selected project
components to:
Call for the participation of local communities and/or nongovernmental organizations (NGOs) in the delivery of services
Increase the utilization of local know-how and materials
Employ labor-intensive and other appropriate technologies. The
procurement procedures, specifications and contract packaging
shall be suitably adapted to reflect these considerations.
211
Procurement under Disaster and Emergency Assistance
Procurement of goods and works under disaster and emergency

assistance shall incorporate greater flexibility ICB requirements will be
relaxed in favor of NCB
LIB will be the norm for procurement of goods with minimum bidding
periods ranging from one to two weeks
Direct contracting to contractors and suppliers under existing loans or

grants will be allowed for new contracts, with rates negotiated around
those in effect for the existing contract with adjustment as required for
inflation and physical considerations
212
Swiss Challenge
The private entity submitting the unsolicited proposal is termed as the
Original Project Proponent (OPP).
After the government evaluates the proposal submitted by the OPP, if it
finds merit in the proposal, it throws the project open for competing
proposals from other parties.
The other parties are expected to match or better the terms of OPPs
proposal. The OPP is given a chance to match or better any competing
proposal on par with the original proposal.
This method is suitable in situations where:
The OPPs proposal has substantial merit
There are objective parameters for comparison between the OPPs
proposal and competing proposals
213
Procurement method: choice of appropriate method

For a corridor level project, the project team should invariably consider
International Competitive Bidding (ICB) unless:
The costs of international competitive bidding are prohibitive
The domestic market is of international standards and has
adequate level of competition
The contract is of comparatively low value
There are exceptional circumstances disallowing the project team
to use ICB.
The project team might consider the National Competitive Bidding
method only in the case of contracts of comparatively small value
The non-competitive bidding methods should be followed only in
exceptional circumstances
214
E-Procurement
215
What is E-Procurement
E-Procurement is a solution designed to electronically handle the process of
public tender for the acquisition of specialized goods, works, and consulting
services that are of high value and low volume.
volume Introduction can be phased
and provides wide exposure to e-GP at low incremental cost.
Disclosure
Download
Clarification
Upload
Opening
Tracking
216
E-Procurement - Components
E-Purchase
E-Tendering
Registration
Tender Notice
Store coding
Tender enquiry
Technical Particulars
Bid submission
Evaluation of Bids
Bid opening
Award of Rate Contract

E-Inspection / Supply
E-Payments
Supply Order
Bill submission
Inspection
Processing
Dispatch Details
Payments
Receipt Details
Debit Adjustments
Status
Complaints
217
E-Procurement - Benefits
Government
Anti-corruption
Increased number of suppliers
Better integration and interaction
between governments
Transparency Professional procurement
monitoring
Higher quality of procurement
decisions and statistics
Political return from the public
Lower prices
Efficiency
Costs
Lower transaction costs

Staff reduction
Reduction in fiscal expenditure
Time
Supplier
Public
Increased fairness and

competition
Improved access to the
government market
Access to public
procurement information
Open the government market
Monitor public expenditure
information
to new suppliers
Stimulation of SME participation Have a say
Government accountability
Improved access to public
procurement information
Government accountability
Lower transaction costs
Staff reduction
Improved cash flow
Simplification/ elimination of
repetitive tasks
Simplification/ elimination of
repetitive tasks
Communication
anywhere/anytime
Communication
anywhere/anytime
Shorter procurement cycle
Shorter procurement cycle
Redistribution of fiscal
expenditure
Communication
anywhere/anytime
218
Strategic Framework*
Awareness Raising
Capacity Building
Policy
&
Guidelines
CountryCountrybased
work
Procurement
Operations &
Monitoring
Harmonization
219
* As per World Bank Report on ELECTRONIC GOVERNMENT PROCUREMENT,October 2003
Selection of
Consultants/Contractors
220
Selection of Consultants
Selection of Consultants
The hiring of consultants will be undertaken through competition among

qualified, short-listed firms in which the selection is based both on the quality
of the proposal and on the cost of the services to be provided (Quality and
cost-Based Selection [QCBS]).
Other acceptable selection procedures in addition to QCBS are as follows:
Quality-Based Selection (QBS)
Fixed Budget Selection (FBS)
Least Cost Selection (LCS)
Selection based on Consultants Qualification (CQS)
Single Source Selection (SSS)
Selection of individual consultants
221
Methods of Consultant Selection

Individual Consultants
Evaluation by the CV
Consulting Firms
QualityQuality- and CostCost-Based Selection (QCBS)
Preferred method of selection
QualityQuality-Based Selection (QBS)
Preferred only when scope of work is difficult to define in detail because of:
the complexity of assignment
the need for an innovative solution
alternative methodologies possible, therefore difficult to compare
Financial Proposals
Direct Selection
Used only in exceptional cases with adequate justification and prior
approval
Used only when a form is clearly more qualified than any other or in case
of emergency
222
Consultant Procurement steps: alternative structures (1/2)

Option 1
(RFP)
Issue of RFP
Elimination
Project Scope
Contracts
Option 2
(RFQ + RFP)
Issue of RFQ
Elimination
Submission of RFP
Consortium Formation
Shortlisting
Technical Proposal
Final Commercial Offer
Receipt of RFQ/Issue RFP
Submission of RFP
Shortlisting
Project Scope
Contracts
Technical Proposal
Option 3
EOI + RFP
Issue of EOI
EOI
Receipt of EOI /Issue RFP

Elimination
Submission of RFP
Shortlisting
Project Scope
Contracts
Technical Proposal
Option 4
EOI + RFQ + RFP
Issue of EOI
EOI
Receipt of EOI/ Issue RFQ

Elimination
Submission of RFP
Shortlisting
Project Scope
Contracts
Technical Proposal
Source: Sustainable Urban Transport Planning Toolkits for Public Private Partnership in Urban Transport, 2008, Ministry of Urban Development
223
Consultant Procurement steps: Selection of the appropriate

structure (2/2)
Project characteristics
Option 1
(RFP)
Option 2
(RFQ + RFP)
Project scope is unambiguous

Execution options well defined
Project Scope is ambiguous and

requires extensive discussions
Bidders characteristics
Bidder universe is well-defined
and limited
Bidder Universe is well-defined

Number of bidders is large and
needs to be limited
Considerable effort required by
bidders to submit proposals
Option 3
EOI + RFP

requires extensive discussions
Bidder universe is limited

Bidder profile needs sharpening
Considerable effort required from
Option 4
EOI + RFQ + RFP

requires iterative discussions
Number of Bidders are large and

need to be limited
Bidder profile needs sharpening
Considerable effort required by
224
Risk Structuring/Mitigation
225
Risk Assessment
Risk may be defined as:
the chance of a loss
uncertainty of loss
possibility of loss
uncertainty
hazard
dispersion of actual from expected results
possibility of an occurrence of an undesirable contingency
a condition in which a possibility of a loss exists
probability of a cash flow outcome different from the one
projected
226
Identifying Risks
The first step in managing and allocating risk is to identify all risks
associated with a project. Risks are usually identified by reference to
generic risk categories and/or risks based on different phases of the
project.
Commissioning Risk
Construction Risk
Demand (usage) Risk
Design Risk
Environmental Risk
Financial Risk
Force Majeure Risk
Industrial Relations Risk
Latent Defect Risk
Operating Risk
Performance Risk
Change in Law Risk
Residual Value Risk
Technology Obsolescence
Risk
Upgrade Risk
227
Risk Structuring / Mitigation

Risk can be structured/ mitigated in 5 ways:
controlled or shared, as in a contract;
switched from one party/support to another by means of a trigger;
financed, such as through standby loans;
deemed reduced, per study results; or
avoided altogether.
228
Risk Assessment
Types of Risk
Operating: Technical
Environmental
Operating: Cost
Political
Operating: Management
Force Majeure
Participant
Completion
Supply
Market
Infrastructure
Foreign Exchange
Engineering
Syndication
Funding/Interest
Legal
229
Matrix of Risks Distribution-Typical Road Project on PPP

Mode
Types of Risk
Cost driver
Allocation
Grantor
Concre
Design Risk
Construction Cost
Site Risk
Construction Cost
Construction Risk
Construction Cost
Force Majeure Risk
Construction Cost, Life Cycle Cost, Government

Budget, Performance Payment/Toll
Revenue Risk
Performance Payment/Toll
O&M Risk
Life Cycle Cost
Performance Risk
O&M Cost, Performance Payment/Toll,O&M

Cost,Life Cycle Cost
External Risk
Life Cycle Cost
Other market Risk
Life Cycle & Construction Cost
Political Risk
Life Cycle Cost
Default Risk
Government Budget
Strategic Risk
Shared
230
Sample Formats for

Procurement of Consultants
231
Notice Inviting Tender (consultant)

Government of /
Government of ..Urban Development Trust
Municipality
Sealed tenders in printed tender forms, as specified hereunder, are invited for the following work
from the consultants as per particulars mentioned below. Tenders will be received by the Executive
Engineer, ..Municipality as per time schedule mentioned hereunder.
1.
Name of work
Consultancy Services for Design and Periodical

Supervision for City Level Roads at
2.
Name of Division
Engineering Division..Municipality
Type of Contract
Quality and Cost Based(QCBS)
3.
Pre-Proposal Date
10/11/2012 at 16.00hrs in conference hall of

..Municipality
6.
Tender Form
Standard Agreement form
7.
Price of tender document
Rs. 5000/- Each set (In Cash)
8.
Last date of application for purchase of tender paper
01/11/2012 (up to 4.30pm)
9.
Date of sale of tender
06/11/2012 (up to 4.00pm)
10.
Date and time for receiving the tender
08/11/2012 (up to 2.00 pm)
11.
Date of opening of tender
08/11/2012 (at 2.30pm)
232
Sd/
Sd/(Executive Engineer,.)
Standard Request For Proposals (Consultants)

PART I SELECTION PROCEDURES AND REQUIREMENTS
Section 1: Letter of Invitation (LOI)
Section 2: Instructions to Consultants and Data Sheet
Section 3: Technical Proposal Standard Forms
Section 4: Financial Proposal Standard Forms
Section 5: Eligible Countries
Section 6: Banks Policy Corrupt and Fraudulent Practices
Section 7: Terms of Reference (TOR)
PART II CONDITIONS OF CONTRACT AND CONTRACT FORMS
Section 8: Standard Forms of Contract
233
Sample Formats for

Procurement of Consultants
234
Notice Inviting Tender (contractor)

Government of /
Government of ..Urban Development Trust
Municipality
Sealed tenders in printed tender forms, as specified hereunder, are invited for the following work from the contractors
as per particulars mentioned below. Tenders will be received by the Executive Engineer, ..Municipality as per
time schedule mentioned hereunder. Rates are to be quoted on an overall percentage (%) basis.
1.
Name of work
Construction of 45m road at from Km 45/100 to Km

54/500
2.
Name of Division
Engineering Division..Municipality
3.
Contractors eligible to participate the tender
Resourceful, bonafide contractors having adequate experience in

similar works only may apply
4.
Estimated value of work
Rs. 28,49,145/-
5.
Earnest Money
Rs. 16,980/- by Bank draft in favor of ..Municipality
6.
Tender Form
Standard Agreement form
7.
Price of tender document
Rs. 5000/- Each set (In Cash)
8.
Last date of application for purchase of tender paper 01/11/2012 (up to 4.30pm)
9.
Date of sale of tender
06/11/2012 (up to 4.00pm)
10. Date and time for receiving the tender
08/11/2012 (up to 2.00 pm)
11. Date of opening of tender
08/11/2012 (at 2.30pm)
12. Time of Completion of work
Six Months excluding Monsoon Season

Sd/
Sd/(Executive Engineer,.)
235
STANDARD BIDDING DOCUMENT FOR PROCURMENT OF

CONTRACTORS
PART I BIDDING PROCEDURES
Section 1: Instruction to Bidders(ITB)
Section 2: Bid Data Sheet(BDS)
Section 3: Evaluation and Qualification Criteria
Section 4: Bidding Forms
Section 5: Eligible Countries
PART II EMPLOYERS REQUIREMENTS
Section 6: Employers Requirements
PART III CONDITION OF CONTRACT AND CONTRACT FORMS
Section 7: General Condition of Contract(GCC)
Section 8: Particular Condition of Contract(PCC)
Section 9: Contract Forms
236
Evaluation Criteria
237
Evaluation Criteria for selection of Consultant/ Contractor

Technical Evaluation
Past Experience of similar projects in terms of quantity or value is
considered
Technical Capacity is also evaluated in terms of the required.
Technical Resources for the project in terms of Equipment, Key
Personnel, etc.
Financial Evaluation
Financial Capacity of the Consultant is evaluated in terms of
Average Annual Turn Over as a Consultancy Fee
Financial Capacity of the Contractor is evaluated in terms of Net
Worth, Turnover, and Net Cash Accruals
238
Key Evaluation Criteria for Procurement of Goods as per World

Bank guidelines
Minimum annual financial turnover usually not less than 2.5 times the estimated annual
payments in the contract
Satisfactorily completed (not less than 90% of contract value) as a prime contractor of at
least one similar work of value not less than Rs........ @ (usually not less than 50% of
estimated value of contract)
Executed in any one year, minimum quantities of work (usually 80% of the expected peak rate
of construction)
Availability of critical equipment and Project Manager
Availability of required liquid assets and/or credit facilities from banks
Available bid capacity of the bidder is more than the total bid value
Assessed Available Bid capacity = ( A*N*2
A*N*2 - B )
A= Maximum value of works executed in any one year during the last 5 years
N=No. of years prescribed for completion of the works for which bids are invited
B=Value of existing commitments and on-going works to be completed during the
next.......years (period of completion of the works for which bids are invited)
239
Contract Management
240
Contract Management
Contract management can be defined as the steps that enable both the contracting
authority and the economic operator to meet their obligations within the contract
in order to deliver the objectives set by the contract.
Key to the process of successful contract management is the recognition that
procurement officers must plan, do, check, and act. (PDCA)
Plan stage refers to the phases prior to
the award of the contract.
Do stage refers to the activity of the
economic operator throughout the life of
the contract.
Check refers to the checks and controls
that are introduced to monitor
performance.
Act refers to the activities necessary to
ensure that any performance that has
moved out of line is brought back within
the required parameters.
241
Contract Management
Contract management activities can be broadly grouped into three areas,
which span the do, check, and act stages of PDCA
Service delivery management
Relationship management
Contract administration
Service delivery management ensures that the service is being delivered at
the required level of performance and quality, as per the contract. Service
delivery management considers performance and manages risk through the
do, check, and act stages of PDCA.
Relationship management seeks to keep the relationship between the
economic operator and the contracting authority open and constructive,
aimed at resolving or easing tensions and identifying potential problems at
an early stage, while also identifying opportunities for improvement.
Contract administration handles the formal governance of the contract
and changes to documentation during the life of the contract.
242
Monitoring & Evaluation
243
Monitoring and Evaluation

Monitoring and Evaluation (M&E) of projects provides funding agencies,
implementing agencies, governments, and civil society with a means for
learning from past experience, which in turn enables better performance,
improves quality, plans and allocates resources in a cost effective manner,
and gets better results.
Monitoring could be defined as: A continuing function that uses systematic
collection of data on specified indicators to provide management and the
main stakeholders of an ongoing development intervention with indications
of the extent of progress and achievement of objectives and progress in the
use of allocated funds
Evaluation could be defined as: The systematic and objective assessment of
an on-going or completed project, its design, implementation, and results. The
aim is to determine the relevance and fulfillment of objectives, development
efficiency, effectiveness, impact, and sustainability.
244
Questions??
245
Thank You!
246

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Capacity Building for

Sustainable Urban Transport

Objectives of the Session

Project Life Cycle

How do we identify a Project?

Identification and prioritization of projects in conformity to

Comprehensive Mobility Plan

Project scope : Definition of what the project is

A SMART analysis. Projects should be SMART i.e. Specific,

Project Planning & Preparation

Project formulation is a process of documenting the eligible facility,

Preliminary Project Report

Preliminary Project Report

The key criteria for an appraisal of a project are:

At each stage, public/ stakeholders consultation is required

Public participation should be generated with stakeholders

Project Structuring- Beginning of Contracting process

This stage of the project cycle involves structuring of the

Project Structuring Options

Issues in Project Implementation

In India, contracts are governed by the Indian

Contracts as defined by ADB/World Bank

Agreement entered into between the Purchaser and the supplier,

The following are the essential ingredients of a Contract:

For the purpose of an agreement, there must be a communication of intention

During the past half century, the International Federation of Consulting

FIDIC Conditions of Contract for Construction, the (New Red Book)

FIDIC Short Form of Contract, the (Green Book)

FIDIC Conditions of Contract for Design-Build-Operate Contract, the (Gold

Legal Framework- Constitutional Provisions

Bid Process Management

Bid process management is a systematic process to

Project Planning &

Bid Process Management

Two cover bid

Project Implementation Options

Primarily Government funded except in case of high density and

Bus Rapid Transit

Project Implementation Options/ Contracting Strategy

Infrastructure provisioning by Government on a PPP basis or

What is Contract Management?

The Central aim of contract management is to obtain a product as

Factors essential for Contract Management

Strong Project Team

Price adjustment procedure

Contract Monitoring and Evaluation

Contract Monitoring Framework

Who will Monitor?

Grievance Rederesal Mechanism

Annual Monitoring Report

Details of the work done during the year

Project objectives that were achieved

What have we Learned?

Capacity Building for

Objective of the Session

Project Life Cycle PPR, FR, DPR

Defining Feasibility Report and DPR

Introduction and Objective of Study

Project Need and Justification, Project Area Characteristics

Existing Situation and Anticipated Demand

Conclusions and Recommendations- Gives a GO/No GO

Introduction and other elements same as Pre-feasibility Report

Definition, Scope and, Purpose