Presentation

on
Public Private Partnership
(PPP)
in
Infrastructure

Presented by:
Group 2
Roll. No. 11-20 A
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 Public Private
Partnership
A PPP is a partnership-type contractual arrangement
between the government and a private sector party
for delivery of a public infrastructure facility.

With governments facing limitations in budgetary,

technical and execution capabilities for providing
such vital infrastructure as roadways, sewerage,
drainage, electricity, etc., PPP not only allows the
tapping of private funds, but also leads to faster
implementation of projects at competitive cost and
efficient risk allocation for the parties involved.

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 Partnership Form
Build-Operate-Transfer (BOT)

Build-Own-Operate-Transfer(BOOT)

Build-Own-Operate(BOO)

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 BOT

Model helps to enter global corporations to start

their R&D center

It is the extension of the client’s business

It provide services provide efficient, quick and cost effective

solutions for those Companies who want to establish a subsidiary.

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 BOOT
It is a form of project financing
Private entity receives a concession from
the private or public sector
For finance, design, construct, and operate a facility
stated in the concession contract
This enables the project proponent to recover its
investment, operating and maintenance expenses in
the project

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 BOO
Model in which a private organization builds,
owns and operates some facility or structure
with some degree of encouragement from the
government

The government doesn't provide direct funding

in this model, it may offer other financial
incentives such as tax-exempt status.

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Incentive Provided by
the Government for
Private Sector
Government to bear the cost of
Project Feasibility Study
Land for the right of way and way side amenities
Shifting of utilities
Environment clearance, cutting of trees, etc. 

Foreign Direct Investment up to 100 % in road sector.

Provision of subsidy up to 40% of project cost to make
projects viable.
100% tax exemption in any consecutive 10 years out of
20 years after commissioning of the project.
 Duty free import of high capacity and modern road
construction equipments.

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Incentive Provided by
the Government for
Private Sector
Declaration of the road sector as an industry .

Easier external commercial borrowing norms.

Right to retain Toll – Toll rates are indexed to the

wholesale price index.

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 BOT (Toll) Model
The concessionaire (private sector) is required to
meet the upfront/construction cost and the
expenditure on annual maintenance.

The Concessionaire recovers the entire

upfront/construction cost along with the interest
and a return on investment out of the future toll
collection.

The viability of the project greatly depends on the

traffic

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Major Private Players in
PPP
Larsen and Toubro

Maytas

Hindustan Construction Company

John Laing (British Co.)

Isolux (Spanish Co.)

Soma Enterprise

Siemens

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 PPP IN GUJARAT
To facilitate higher flow of funds into
infrastructure sector and to ensure coordination
among various government agencies, Gujarat
Infrastructure Development Board (GIDB) was
set up in 1995
GIDB bring private Sector Participation in the
state.
GIDB itself does not develop infrastructure
services but acts as a catalyst for their
development.

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 GIDB FOCUSES ON
Overall Planning
Co-ordination between various sector specific
departments
Concession Agreements which detail the risk
allocation in a public private partnership
Project preparation by conducting pre-feasibility and
feasibility studies through reputed consultants
Selection of Developers through international
competitive bidding and Challenge Route.

Monitoring progress of projects

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THE GUJARAT INFRASTRUCTURE
DEVELOPMENT ACT

This law is the first of its kind in the country.

Gujarat act no.11 of 1999

An Act to provide for a framework for participation

by persons other than the State Government and
Government agencies in financing, construction,
maintenance and operation of infrastructure
projects

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 According to act
(a) “Board” means the Gujarat Infrastructure
Development Board established under section 17.

(b) “concession agreement” means a contract of

the nature specified in Schedule II between a
developer and the State Government, a
Government agency or a specified Government
agency, relating to a project.

(c) “developer” means a person with whom

concession agreement is entered into by the State
Government, the Government agency or the
specified Government agency,
 According to act
Concession agreement (1)

(a) A person may enter into a concession

agreement of the nature specified in
Schedule II with the State Government.

Selection of a person

(1) A concession agreement for undertaking

a project may be entered into with a person
who is selected through a competitive public
bidding as provided in section 9 or by direct
negotiation as provided in section 10.
According to act
Projects Planned under
PPP
Road : Four laning of Ahmedabad-Viramgam-
Maliya Road, Halol-Godhra-Shamlaji Road, Rajkot-
Jamnagar-Vadinar Road, Nakhatrana- Dyapar-
Panandhro Road, Bhuj-Bhahau Road.

Water : Provision of 24 hrs water supply in towns

like Morbi, Mehsana, Anand, Gandhinagar, Amreli.

Development of Bus Rapid Transit system in

Ahmedabad.

Development of Convention centre at Ahmedabad.

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Status of Infrastructure
Project

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 PPP IN TAMIL NADU

Sectors identified for PPP

Water supply and sewerage
Road infrastructure (roads, bridges and
flyovers)
Improvement of urban infrastructure
Port infrastructure
Computer literacy in school education

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PPP Organizations Formed
In Tamil Nadu

Tamil Nadu Water Investment Company (TWIC)

Established New Tirupur Area Development Corporation
Ltd (NTADCL) as SPV for supply of industrial and
drinking water under Tirupur Water and Sanitation
Project.

Tamil Nadu Road Development Company (TNRDC)

Tamil Nadu Urban Development Fund (TNUDF)

Ennore Port SEZ

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 PPP – BENEFITS TO
GOVT
•Leveraging scarce budgetary resources of Govt.

Ownership of underlying public assets to continue to

vest with Govt.

Channelizing innovative and modern management

practices from private sector in
Project development and structuring
Resource mobilization
Asset management and preservation

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 PPP – BENEFITS TO
PRIVATE PARTNER
Policy level and statutory support by Govt.

Handholding by Govt. to resolve bottlenecks as in

land acquisition, clearances and approvals.

Govt. participation to enhance lender confidence,

enabling mobilization of cheaper funds

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Thank You

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