ppps lessons from the last 18 months
TRANSCRIPT
-
8/14/2019 PPPs Lessons From the Last 18 Months
1/14
1
Any unauthorized disclosure, copying or distribution of the contents of this information is prohibited.
PPP Days 2010PPPsLessons from the Last 18 Months
Rajiv B Lall
March 22, 2010
-
8/14/2019 PPPs Lessons From the Last 18 Months
2/14
Full
Privatization
Works &
Services
Contracts
Management
ContractsOperation
Concessions
Build Operate
Transfer
Concessions
Low High
Extent of private sector participation
Asset
OwnershipPublic Public Public Public & Private Private
Commercial
Risk
Public Public Private Private Private
Typical
Duration
1-2 Years 3-5 Years 15-20 Years
(depends on
feasibility)
20-25 Years
(depends on
feasibility)
Indefinite
Sectors Roads EPC;Sewerage
Project
Toll Stations City Bus Service Highways;Bus Terminals
Telecom, Power,Waste Processing
Private Sector Participation (PSP) in India
Any unauthorized disclosure, copying or distribution of the contents of this information is prohibited.
-
8/14/2019 PPPs Lessons From the Last 18 Months
3/14
PPP trends
Any unauthorized disclosure, copying or distribution of the contents of this information is prohibited.
After establishing themselves in Roads, Power and
Telecom, PPPs foray into challenging Urban Infrastructure.
Contribution of private investment:
National Highways: Close to half
Power: Projected to double between 10th (01-06) and 11th (07-12) 5-Year
plans and reach USD 40 billion. Telecom: 2/3rd of total investment in FY 08-09
Use of both traditional and innovative PPP structures
Traditional PPPhighways, urban public transportation, airports
Innovativepower sector
-
8/14/2019 PPPs Lessons From the Last 18 Months
4/14
Generation Transmission Distribution
MoU based PPAs
Competitive Bidding
SPV for project
development
Ultra Mega Power Projects
GoI/Power Finance Corporation
PPA
Tariff based
competitive
bid
Utilities
Private
Player
Central & State
Utilities
PSPInter state & intra state
JV- Central/State Transmission
Utility & private player
oTala transmission system
Independent Power
Transmission Corporation -
oPrivate sector awarded
projects through tariff based
bidding
o2 schemes under Western
Region System Strengthening
Utilities
Management
Contract
OperationConcession
Privatization
Metering
Billing
Collection
Delhi
distribution
business
Distribution
Franchisee
Bhiwandi
Power
Supply
PPPs in all three components of Power
Any unauthorized disclosure, copying or distribution of the contents of this information is prohibited.
-
8/14/2019 PPPs Lessons From the Last 18 Months
5/14
Huge upsurge in Road activity
Source: NHAI (for Projects awarded from 1999 to March 2009); IDFC (rest)
Of the 47,000 kms earmarked for PPP development under NHDP, about 14,000 kms has been
bid out in 122 PPP Concessions across the country for a total investment of about Rs. 70,000
crores.
In FY 2010 we could do more in just PPP contracts than was awarded in EPC and PPP
contracts together in the peak year of 2005-06 when 4,740 kms worth of road contracts were
awarded.
Significant private sector interest
No ofProjects
Length(km)
ProjectCost (Cr.)
From 1999 to March 2009: Projectsawarded 95 7,600 46,369
April - Dec 2009: Projects awarded/bidswon 27 2,568 25,404
Pipeline: Projects w/ likely bids 26 3,348 34,439
Jan-Feb 2010: Projects in RFQ stage 24 2,459 20,091
Any unauthorized disclosure, copying or distribution of the contents of this information is prohibited.
-
8/14/2019 PPPs Lessons From the Last 18 Months
6/14
The Port Sector PPP model has been very successful
Share of Private Sector in Container Volume
FY2002 FY2009
PrivateTerminals
Volume 2009
Mumbai 90
Kandla 138
NSICT (DPW) 1,427
GTI (APMM) 1,256
Pipavav(APMM)
195
Mundra (DPW) 808
Cochin (DPW) 260Tuticorin (PSA) 439
Chennai (DPW) 1,143
Vizag (DPW) 90
Total (000 TEU) 6,054
(000 TEUs)
Any unauthorized disclosure, copying or distribution of the contents of this information is prohibited.
Total TEUs: 2,885
Private TEUs: 1,385Total TEUs: 7,848
Private TEUs: 6,054
(000 TEUs)
Private
52%
Government
48%
Private
77%
Government
23%
-
8/14/2019 PPPs Lessons From the Last 18 Months
7/14
All major airports are PPP
Notes:
The investments refer to original investments and there have been significant
cost overruns.
Currently Mumbai cost is estimated around Rs. 9,800 Cr as per press reports.
Government ownership is 26% in all 4 airports, in Delhi and Mumbai AAI holds
26%. In Hyderabad and Bangalore, AAI has 13%, with respective State
Government holding 13%. In addition to the Grant of 107 Cr, GoAP has also
given an interest free loan of Rs. 315 Cr to the Hyderabad airport.
Total
Investment
Govt
grant/VGF
Govt.
Ownership
Govt. share
of revenue
Land
ContributionRs Cr Rs Cr % % Acres
Mumbai 6000 - 26 38.7 1875
Delhi 10225 - 26 45.99 5060
Hyderabad 2920 107 26 4 5450
Bangalore 2400 350 26 4 4000
Airport
Privatized airports
Any unauthorized disclosure, copying or distribution of the contents of this information is prohibited.
Of the 2009 passenger capacity of 110 million, 56% is handled by
PPP airports.
In 2009, PPP airports handled 70% of freight by value.
-
8/14/2019 PPPs Lessons From the Last 18 Months
8/14
Urban PPP projects: Emerging models validating
proof of concept
Any unauthorized disclosure, copying or distribution of the contents of this information is prohibited.
Urban Transportation:
Intra city bus service (Indore)
BRTS (Rajkot)
MRTS (Mumbai Metro ONEVersova-Andheri-Ghatkopar Corridor)
Bus terminals (Amritsar, Jalandhar)
Water Distribution:
Latur Water Distribution (infrastructure upgrade and water distribution)
Karnataka Urban Water Supply Improvement Project (KUWASIP)
Solid Waste Management:
Rajkot solid waste processing plant (fully privately owned plant)
Electricity Distribution:
Bhiwandi
Delhi
-
8/14/2019 PPPs Lessons From the Last 18 Months
9/14
Electricity Distribution: Bhiwandi, Maharashtra
Any unauthorized disclosure, copying or distribution of the contents of this information is prohibited.
Description: Upgradation, operation and maintenance of the city
electricity distribution network.
PPP type: Performance linked O&M contract
Project Structure:
Government and private sector contribute to capex. Private sector
purchases power from the government entity at a predeterminedrate.
The private sector is responsible forplanning, O&M, metering, billing, collections, and need to achievea minimum reduction in T&D losses; and increase in collectionefficiency.
Revenue Source:
Revenues from users.
AT&C loss reduction by 30%; DT failure rate by 32.5%, and DTlosses by over 40%
-
8/14/2019 PPPs Lessons From the Last 18 Months
10/14
Bus Terminal, Amritsar, Punjab
Any unauthorized disclosure, copying or distribution of the contents of this information is prohibited.
Description: Renovation and expansion of existing inter-city terminal
including construction of shops and amenities.
PPP type: BOT
Project Structure:
Entire $47 million (43% equity, 57% debt) of construction costborne by the concessionaire.
Government provided the land.
Revenue Source:
Parking charges from halting buses; lease rentals fromshops/offices; advertisement revenues.
Actual revenues surpassed projections. For 1st 3 quarters of FY 09bus charges constituted 68% of revenues, lease rents 23% andadvertisement revenues 9%.
-
8/14/2019 PPPs Lessons From the Last 18 Months
11/14
City Bus Service, Indore, Madhya Pradesh
Any unauthorized disclosure, copying or distribution of the contents of this information is prohibited.
Description: Operate and manage intra-city bus service.
PPP type: O&M contract
Project Structure:
A SPV (Indore City Transport Services Limited - ICTSL) provided
common infrastructure (such as bus stops and terminals). Concessionaires provided buses and operate them.
Revenue Source:
Fares (daily fares, and daily and monthly passes) and advertising
revenues. Concessionaire retains 60% of the advertisement revenue, 80% of
pass revenue, and the 100% of daily fare collection. Rest passedon to ICTSL. Concessionaire also pays monthly premium to ICTSL.
-
8/14/2019 PPPs Lessons From the Last 18 Months
12/14
Karnataka Urban Water Supply Improvement
Project
Any unauthorized disclosure, copying or distribution of the contents of this information is prohibited.
Description: 24x7 water supply in 5 demo zones of 3 cities(Belgaum, Gulbarga and Hubli-Dharwad)
PPP type: Performance linked O&M contract
Project Structure:
Improvements to bulk water supply made by Karnataka Urban
Water Supply and Drainage Board. Private sector upgraded the distribution network including
installation of meters and tariff collection system.
Revenue Source: Fixed plus performance-based payments.
60% of remuneration is quarterly fixed payment and the
remaining 40% linked to targets in the preparatory and O&Mperiods. A bonus of up to $1.2 million can be earned for betteringperformance targets or a maximum penalty of 10% ofremuneration paid for failure.
Water loss reduction from 50% to 7%.
-
8/14/2019 PPPs Lessons From the Last 18 Months
13/14
Waste Processing Plant, Rajkot, Gujarat
Any unauthorized disclosure, copying or distribution of the contents of this information is prohibited.
Description: 300 metric tonne (MT) waste processing plant
PPP type: Build Own Operate (BOO)
Project Structure:
Land provided by the Rajkot Municipal Corporation (RMC). RMCalso delivers 300 MT of garbage per day.
Private sector constructed the plant.
Revenue Source: Sale of waste by-products.
40 MT of bio fertilizer/compost; 70 MT of fluff (used as fuel); 15,000
bricks, recycled plastics and metals. Plant utilizes 85-90% of waste.
-
8/14/2019 PPPs Lessons From the Last 18 Months
14/14
Way forward.
Any unauthorized disclosure, copying or distribution of the contents of this information is prohibited.
Design & integrity of contracts
Bid parameter Changes in contract
Capacity Building: State and ULBs.
I-CAP/IDFC/associated companies training programmes
PPP cells in several states (such as AndhraPradesh, Haryana, Orissa and Tamil Nadu) and Railways
Minimizing fiscal cost of projects
Control increase in VGF
Remove implementation impediments
Clearances
Land acquisition