Comparative Analysis of PPP Modes

Submitted By:Abhinav Saxena (2013PSM-001)Vishesh Singh (2013PSM-017)

Submitted To:Dr. Gyan Prakash

Current Status of PPP Projects in India

Sector No. of Projects Cost (In Rs. Cr.)Civil Aviation 2

Housing 8 7299.17Ports 33 43362.70

Railways 1 8500.00Roads 231 254491.83Sports 5

Tourism 1 148.87Total 281 313802.57

Source: PPP in India Official Site

Yearly Summary for PPP Projects in India

Financial Year No. of Projects Cost (In Rs. Cr.)FY 2006 -2007 15 6533.54FY 2007 -2008 13 11227.46FY 2008-2009 48 53381.78FY 2009 -2010 53 57854.97FY 2010 -2011 33 26010.24FY 2011 -2012 59 63342.16FY 2012 -2013 27 27904.76FY 2013 -2014 26 59850.29FY 2014 -2015 7 7697.37

Total 281 313802.57

Source: PPP in India Official Site

Financial Year No of Projects Cost (In Rs. Cr.)Andhra Pradesh 20 17541.94

Assam 4 2571.53Bihar 11 10096.27

Chattisgarh 4 3136.93Delhi 8 9492.58Goa 4 3515.46

Gujarat 13 18524.8Haryana 11 13952.48

Himachal Pradesh 3 2773.12Jammu & Kashmir 8 20927.55

Jharkhand 2 1008.75Karnataka 20 14492.95

Kerala 11 10056.44Madhya Pradesh 18 18162.21

Maharashtra 25 43334.43Meghalaya 1 536.00

Orissa 18 18483.54Punjab 10 8423.42

Rajasthan 19 17001.77Tamil Nadu 26 21879.95

Uttar Pradesh 20 21327.54Uttarakhand 2 1021.61West Bengal 13 14072.41INTER STATE 10 21468.87

Total 281 313802.57

State Wise Summary of PPP Projects

PPP Modes: From public procurementtowards privatization (divestiture)

Design-Build

Design-Build-Maintain

Design-Build-Operate

Design-Build-Operate-Maintain

Build-Own-Operate-Transfer

Build-Own-Operate

Design-Build-Finance-Operate

Design-Build (DB) Project Lifecycle

Signing of contract between public party and private partner

Designing and building up of the facility in accordance with governments requirements

Public party assumes responsibility for operation and maintenance

Design-Build-Maintain (DBM) Project Lifecycle

Signing of contract between public party and private partner

Designing, building up and maintenance of the facility in accordance with governments requirements

Public party assumes responsibility for operation

Design-Build-Operate (DBO) Project Lifecycle

Signing of contract between public party and private partner

Designing and building up of the facility in accordance with governments requirements

Transfer of ownership to the public party after the completion of facility

Design-Build-Operate-Maintain (DBOM) Project Lifecycle

Signing of contract between public party and private partner

Designing and building up of the facility in accordance with governments requirements

Operation and maintenance by private partner for a specific period

Ownership of the facility is transferred to the public party

Build-Own-Operate-Transfer (BOOT) Project Lifecycle

Granting of Franchise to a private partner

Financing, designing, and building up of the facility in accordance with governments requirements

Operation and maintenance by private partner for a specific period

Ownership of the facility is transferred to the public party

Build-Own-Operate (BOO) Project Lifecycle

Granting of Franchise to a private partner

Financing, designing, and building up of the facility in accordance with governments requirements

Operation and maintenance by private partner

Ownership of the facility remains with the private partner

Design-Build-Finance-Operate (DBFO) Project Lifecycle

Granting of Lease to a private partner

Financing, designing, and building up of the facility in accordance with governments requirements

Operation and maintenance for a long term (lease period)

Ownership of the facility is transferred to the public party at the end of the lease period

Asset ownership during contract

PPP duration

Private partners revenue risk and compensation terms

Private partners role

Relevance in India & examples

Public Short-medium (3-5years)

Medium-HighRisk

Tariff revenue

Design, construct, manage, maintain

Not very common in India Financing obligation is not retained by the public

sector

Design-Build-Operate (DBO) Features

Also known by a number of different names, including "turnkey" procurement and build-operate-transfer (BOT).

Asset ownership during contract

PPP duration

Private partners revenue risk and compensation terms

Private partners role

Relevance in India & examples

Private Long (20-30 years)

High risk Tariff revenue

Design, construct, own, manage, maintain, transfer

Common form of concession mode in India Example:

o Greenfield minor port concessions in Gujarat.

o Andhra Pradesh Tolling Policy, India (2007)

Build-Own-Operate-Transfer (BOOT) Features

Asset ownership during contract

PPP duration

Private partners revenue risk and compensation terms

Private partners role

Relevance in India & examples

Private Perpetual High risk Tariff revenue

Design, finance, construct, own, manage, maintain

Asset ownership is with the private sector Service / facility provision responsibility is also

with the private sector Not common in India

Build-Own-Operate (BOO) Features

Asset ownership during contract

PPP duration

Private partners revenue risk and compensation terms

Private partners role

Relevance in India & examples

Public Long (20-30 years)

High risk Tariff revenue

Design, finance, construct, manage, maintain

Most common form of concession mode in India Examples:1. Nhava Sheva International Container Terminal2. Amritsar Interstate Bus Terminal3. Delhi Gurgaon Expressway4. Hyderabad Metro5. Salt Lake Water Supply and Sewage Disposal

System

Design-Build-Finance-Operate (DBFO) Features

Asset ownership during contract

PPP duration

Private partners revenue risk and compensation terms

Private partners role

Relevance in India & examples

Public Short -Medium(3-5 years)

Low risk Pre-

determined fee, possibly with performance incentives

Management of all aspects of operation and maintenance

Involves contracting most or all of the operations and maintenance of a public facility or service to the private sector

Ultimate obligation of service provision remains with the public authority

Day-to-day management control is vested with the private sector

Private sector is not required to make capital investmentsExamples:

1. Karnataka Urban Water Supply and Improvement Project

2. Performance based maintenance contracts in highways

Management Contract Features

Risk allocation in PPP modes: BOT versus BOOT (1/3)

Risk Type BOT BOOTA Pre-Operative Task Risks

A1 Delays in Land Acquisition Public Sector Public Sector

A2 External Linkages Public Sector Public Sector

A3 Financing Risks Private Sector Private Sector

A4 Planning Private Sector Private Sector

B Construction Phase Risks

B1 Design Risk Private Sector Private Sector

B2 Construction Risk Private Sector Private Sector

B3 Approvals Private Sector Private Sector

B3 Additional Site Risk Public Sector Public Sector

Risk allocation in PPP modes: BOT versus BOOT (2/3)

Risk Type BOT BOOTC Operations Phase Risks

C1 Technology Risk Private Sector Private Sector

C2 Operations & Maintenance Risk Private Sector Private Sector

C3 Traffic Risk Private Sector Private Sector

C4 Payment Risk Private Sector Private Sector

C5 Financial Risk Private Sector Private Sector

D Handover Risk Events

D1 Handover Risk Private Sector Private Sector

D2 Terminal Value Risk Private Sector Private Sector

Risk allocation in PPP modes: BOT versus BOOT (3/3)

E Other Risks

E1 Change in Law Public Sector Public Sector

E3 Sponsor Risk Private Sector Private Sector

E4 Concessionaire Event of Default Private Sector Private Sector

E5 Government's Event of Default Public Sector Public Sector

Each project will involve some variation of this contractual structure depending on its particular requirements.

Contractual Structure for BOT Projects

It is rare to find a business partner who is selfless. If you are lucky it happens once in a lifetime.

- Michael Eisner (CEO, Walt Disney, 1984-2005)

THANK YOU!

Comparative Analysis of PPP ModesCurrent Status of PPP Projects in IndiaYearly Summary for PPP Projects in IndiaSlide Number 4PPP Modes: From public procurement towards privatization (divestiture)Design-Build (DB) Project LifecycleDesign-Build-Maintain (DBM) Project LifecycleDesign-Build-Operate (DBO) Project LifecycleDesign-Build-Operate-Maintain (DBOM) Project LifecycleBuild-Own-Operate-Transfer (BOOT) Project LifecycleBuild-Own-Operate (BOO) Project LifecycleDesign-Build-Finance-Operate (DBFO) Project LifecycleDesign-Build-Operate (DBO) FeaturesBuild-Own-Operate-Transfer (BOOT) FeaturesBuild-Own-Operate (BOO) FeaturesDesign-Build-Finance-Operate (DBFO) FeaturesManagement Contract FeaturesRisk allocation in PPP modes: BOT versus BOOT (1/3)Risk allocation in PPP modes: BOT versus BOOT (2/3)Risk allocation in PPP modes: BOT versus BOOT (3/3)Slide Number 21It is rare to find a business partner who is selfless. If you are lucky it happens once in a lifetime.- Michael Eisner (CEO, Walt Disney, 1984-2005)