Professional Documents
Culture Documents
Partnerships in
Indian Roads
Overview & Critique
10 Outlook
14 Sector Opportunities
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Public Private Partnerships
A Primer
PPP …
“a public service or facility that was conventionally
being provided by the Government of a country by
virtue of being a socialist political or economic
organization or the Government and/or the public
authority entrusted with providing the public service or
facility having financial or technical capacities that
render it in a better position as a natural monopoly to
provide that service/facility.”
Aims:
Better price discovery,
Better utilization of resources and
Superior deliverable-based provision of services
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Public Private Partnerships
Framework in Indian Road Sector
Project Lenders/Financiers
Legal Counsel (LLC)
Independent Engineer (LIE)
Insurance Advisor (LIA)
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Indian PPPs’ Timeline & Sector-wise Distribution
250,000
Communication
Energy 12% 1%
Social and Commercial Infrastructure
200,000 Transport
Water Sanitation 46%
39%
150,000
2%
100,000
50,000
‐
The graph shows the value of Projects implemented on PPP since 1992 till the current FY 16-17.
Source: http://infrastructureindia.gov.in
All figures in Rs. Crore
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PPP Sub-Sectors Breakup
₹ 926,567 Electricity generation (grid)
₹ 686,388 Roads and bridges
₹ 378,820 Renewable energy (grid)
₹ 311,153 Railway track, tunnel, viaducts, bridges
₹ 304,764 Irrigation (dams, channels, embankments, etc.)
₹ 206,517 Urban public transport (except rolling stock)
₹ 197,651 Electricity transmission
₹ 147,758 Ports (excluding captive)
₹ 72,986 Water supply pipeline
₹ 64,464 Common infrastructure for industrial parks, SEZ
₹ 58,770 Gas pipelines
₹ 49,264 Airports
₹ 37,505 Oil/ Gas/ LNG Storage
₹ 26,182 Telecommunication towers
₹ 22,215 Sewage collection, treatment and disposal system
₹ 18,191 Oil pipelines
₹ 7,611 Solid waste management
₹ 7,494 Storm water drainage system
₹ 5,104 Tourism
₹ 4,128 Cold Chain
₹ 3,924 Water treatment plants
₹ 965 Health Care
₹ 432 City gas distribution
₹ 274 Education
₹- Inland waterways
The chart depicts the project costs of all PPP investments made or proposed in the country since 1991.
Source: http://infrastructureindia.gov.in
All figures in Crore
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Kilometerstones on the Indian Road Story
Jaykar Committee Recommendations
1929 1984 Lucknow Plan
Central Road Fund (CRF)
1939 Motor Vehicle Act 1997 First Union level PPP in Road/Bridge
B. K. Chaturvedi Committee
2009 Recommendations
National Highway Act 1956
C. Rangarajan Committee Recommendations
Exit Liberalization
2013-14
Hybrid Annuity Model (HAM)
Border Roads Organization (BRO) 1960 National Highway Infrastructure Dev Co Ltd. (NHIDCL)
Bharat Mala
One Time Fund Infusion
2015
Bombay Plan 1961 Toll Operate Transfer (TOT) Model
Arbitration & Conciliation Act Amendments
Vijay Kelkar Committee Recommendations
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Indian Road Network – Facts & Figures
Magnitude: With nearly 5.1 Lakh km as
on date, India has the 2nd longest road
1,533,927 ,
network in the world after USA 33.7%
Source: Wikipedia
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State-wise Road Density in India
Among the States, Uttarakhand
has the longest cumulative NH
length while Sikkim has the
shortest cumulative NH length.
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Primary Road Implementation Agencies & Flagship Programmes
Golden Quadrilateral Z-Morh Tunnel Bharat Mala Urban Roads in Union Pradhan Mantri Gram HIMANK (Ladakh)
North-South-East-West Char Dham Road Setu Bharatam Territories Sadak Yojana (PMGSY) Rohtang Tunnel
Connectivity Border connectivity State Highway Transfer Delaram-Zaranj
Port Connectivity Highway
Expressways
NH Grid Connectivity
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Indian Roads PPP Experience
The GOOD The BAD The UGLY
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Indian Roads PPP Experience
The GOOD The BAD The UGLY
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Outlook
• The success of PPPs in Indian Roads will
depend largely on Consistency in policy
and Swiftness and amicableness in
resolution of disputes Emphasis on
Commissioning
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Our Presence
As The Lenders’ Project Management Consultant (LPMC)
• 84 km stretch on NH 17 on the Mumbai-Goa route originally scheduled for completion by June 2014
• SPV called Supreme Panvel Indapur Tollway Ltd. (SPITPL) promoted by M/s Supreme Infrastructure India Ltd.
Panvel‐ • Total Project Cost of Rs. 1,206 tied at a Debt-Equity Ratio 2.94:1 with State Bank of India as Lead Lender
Indapur, • Awarded in 2011 and currently scheduled for commissioning by June 2017
Maharashtra
• 157 km stretch on NH 24 on the Delhi-Lucknow route originally scheduled for completion by Sep 2013
• SPV called Bareilly Highway Projects Ltd. (BHPL) promoted by M/s Era Infrastructure India Limited
• Total Project Cost of Rs. 1,951 Cr tied at a Debt-Equity Ratio 2.54:1 with State Bank of India as Lead Lender
Bareilly‐ • Awarded in 2010 and currently scheduled for commissioning by March 2017
Sitapur,
U.P
• 30 km stretch on SH 16 on the Malout-Shadul Shahar route originally scheduled for completion by Nov 2015
• SPV called Kotkapura Muktsar Tollway Pvt Ltd (KMTPL) promoted by M/s Supreme Infrastructure BOT Pvt Ltd
• Total Project Cost of Rs. 105 Cr tied at a Debt-Equity Ratio 2.53:1 with Union Bank of India as Lead Lender
Kotkapura‐ • Awarded in 2014 and currently scheduled for commissioning by October 2016
Muktsar,
Punjab
• 78 km stretch on NH 34 on the Kolkata-Bahrampore route originally scheduled for completion by July 2014
• SPV called SEW Krishnagar Bahrampore Highway Ltd. (SKBHL) promoted by M/s SEW Infrastructure Pvt. Ltd.
Krishnagar‐ • Total Project Cost of Rs. 640 Cr was tied at a Debt-Equity Ratio 4:1 with State Bank of India as Lead Lender
Bahrampore, • Awarded in 2012 and currently scheduled for commissioning by July 2014
West Bengal
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Positioning & Exclusivity
Stalled Projects Mounted since late last decade. To revive these projects, and avoid further deterioration
of their assets, lenders sanctioned additional loans and
The lenders couldn't keep a close watch on these
projects because of their admittedly flawed extant A new project implementation setup was created
project setup:
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Value Additions
Enhanced Visibility Improved Project Performance
In order to assure themselves of the flow of funds Through key interventions and our escalations
directly to the third parties, the presence of a mechanism we were able to effect better billing
Lender’s representative gave rise to an assurance and documentation systems of the Principal
to the Lenders of those parties’ presence and Contractor. This in turn lead to accurate
services and deliveries. measurements, avoidance of overlaps during
invoicing and precise material reconciliation.
Our presence resulted in flagging of risks that were By proper quantification of the volume of works
hitherto not communicated to the Lenders. being executed and verifications of items being
Drawing from our experiences and visible delivered, the Lenders evinced confidence in the
impediments to the work progress we could transmission of funds from the Escrow to the
escalate and advise timely mitigations to avoid or parties whose payments were recommended by us.
reduce the occurrence of risks to the project.
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Opportunities
1. Empanelment to be eligibility for competitive bids
a. Commercial Banks
b. Ministries - Road Transport & Highways, Shipping, Urban, Rural, Defence, etc.
c. Implementation Agencies – NHAI, NHIDCL
a. IFC
b. IBRD
c. ADB
a. IIFCL
b. NIIF
c. PFC