Foundation

Development of Resource Generation Policy for Urban Transport

Palash Srivastava Director, PPP Initiatives

Foundation

Resource Generation for Urban Transport Systems

Financial
Capex Opex

Non-Financial
Land Skilled HR

Civil & Structures

Rolling Stock & IT Non Revenue

Initial

Expansion

Revenue

Project preparation

Construction

Operations

M &E

Communication with Stakeholders is a key intangible resource requiring attention

Contours for this session

1. Rolling stock & Operations Cost Provision : Airport Express Metro Rail Link 2. Mobilising Land resources: Thiruvananthapuram City Roads Improvement Project 3. Varying resource generation strategies: Comparison of Mass Rail Transport Systems in India 4. Mobilizing ULBs and communities: Greater Bangalore Water and Sewerage Project 5.

Foundation

Communication as a vital link: Development of Modern Bus Terminal at Amritsar under BOT framework

6.

Mobilizing Land and Markets: NDMC Multi Level Parking Projects

3

Foundation

RAIL BASED, MRTS FUNDED BY PRIVATE PARTY BRINGING AIRPORT CLOSER.

AIRPORT EXPRESS METRO RAIL LINK FROM NEW DELHI RAILWAY STATION IGI AIRPORT

Project Snapshot

Foundation

Authority : Delhi Metro Rail Corporation Ltd. (DMRC), a joint venture of Government of India and Government of National Capital Territory of Delhi (GNCTD) Concessionaire : Special Purpose Vehicle (SPV) Delhi Airport Metro Express Pvt. Ltd. (DAMEPL), a Special Purpose Vehicle formed by Reliance Infrastructure in consortium with CAF of Spain Mode of Delivery : Built Own Operate Transfer (BOOT) Cost of project (in INR): 5800 crores O&M Cost for 30 Years(in INR): Rs 946 crores Land: Provided by Authority Length : 22.7 Km (15.7 Km Underground and 7 Km on elevated section) Concession Period : 30 years Award Date : January 2008 Present Status : Project is Operational since September 2010

DAMEPL financed the procurement of rolling stock, the cost of building stations & the O&M Costs and is also sharing revenue with Government.

Project Conceptualization
Rapid Growth in Population of Delhi City More Vehicles leading to Congested Roads & Increased Pollution level
Lack of Good Quality Public Transport System

Foundation

Movement of Passengers from City to airport primarily by taxis and Private cars Requirement of Rail based Mass Rapid Transit System to link airport Commonwealth Games would bring additional traffic and require efficient Public Transport to link City from Airport and viceversa

Project Development
Delhi Metro Airport Express Line

Foundation

Route Finalized

Facilities

Bidding Process

New Delhi (Railway Station) to Airport Terminal T3

Trains having cushioned seats and information system for flight schedules Airline and baggage check-in facility Travel time to airport from city 18minutes

Two Stage Bidding Process

Other Stations Shivaji Stadium, Dhaula Kuan, Delhi Aerocity, Dwarka Sector 21

Reliance Energy Limited (95%) in consortium with CAF (5%) of Spain

Contractual Arrangement
Obligation of the Concessionaire:

Foundation

Design, Procure, Develop, Finance, Install, Operate, Maintain and Transfer all the systems including but not limited to Rolling Stock for 30 years
including construction time.

To pay DMRC, the Concession fee

Obligation of the Authority:

Provide Right of way and other Necessary Clearances

Financing Mechanism

Foundation

High Construction Cost, low rate of IRR Funding of Rs. 2500 Cr for a debt requirement of Rs. 2020 Cr License fee of Rs 10,000 Concession fee of Rs 51Cr with increase of 5% (cumulative) every year Revenue sharing
1 % of gross revenue from the first year to the fifth year 2% of gross revenue from the sixth year to the tenth year 3 % of gross revenue from the eleventh year to the fifteenth year 5% of gross revenue from the 16th up to the expiry of concession.

Risk Sharing Mechanism

Demand /Revenue Risk:
Traffic Risk : borne by the Concessionaire. Collection Risk : borne by Concessionaire

Foundation

Completion Risk:
Borne by Concessionaire

Operating Risk :
Borne by the Concessionaire

Issues For Deliberation

Environmental clearances
In this case, DUCA raised objections on proposed corridor

Foundation

Project Preparation & awareness of Govt norms

Objection of Home Ministry & Bureau of Civil Aviation pertaining to security threat over proposed route and Baggage Check in Facility

Co-ordination
Difference of opinion between Planning Commission and Ministry of Finance over mode of Delivery

Marketing and communication with User groups

Factors Attributing to Success

Fast mode of Public Transport linking airport. Based on PPP model where private party bears Financing risk along with Construction and O&M risk and Revenue Risk.

Foundation

Government shares the revenue apart from receiving fixed concession fee. Provides comfort to air passengers by providing check in facilities at the Metro stations. Strategically located stations

Foundation

DEVELOPING WITHIN CITY ROADS THROUGH PPP BY CREATING DEDICATED FUND BOARD PAYING THROUGH ANNUITY
THIRUVANANTHAPURAM CITY ROADS IMPROVEMENT PROJECT (TCRIP)

Project Snapshot

Foundation

Authority : Public Works Department (PWD), Kerala (funded by Kerala Road Fund Board, KRFB) Cost of project (in INR): 221.4 Cr Concessionaire : SPV Thiruvananthapuram Road Development Company Ltd (TRDCL) formed between IL&FS Transportation Networks Ltd and Punj Lloyd Ltd. Mode of Delivery : BOT (Annuity) Annuity quoted by concessionaire : Rs 18 Crore Length of Road : 42 kms Concession Period : 17.5 Years Start Date : March 2004 Present Status : Project is presently being implemented (construction phase partly completed)

Strengthening/Expanding/Upgrading cost of Trivandrum City Roads were borne by the Concessionaire along with the O&M Cost
.

Project Conceptualization and Development

TCRIP
Conceptualization
Long Term Contracts for city road Development with O&M Obligation making the contractor more responsible and accountable

Foundation

Development

City Roads Developed through Small Construction Contracts No O&M obligation leading to poor quality roads and frequent repairs Life Cycle approach adopted by TCRIP

Constitution of Kerala Road Fund Board

Trivandrum City aerial roads identified for strengthening, upgrading and expanding with better public infrastructure

Two Stage bidding process

(Winner TRDCL)

Annuity model adopted as tolling not feasible for city roads

Contractual Arrangement

Foundation

Contractual Arrangement
Obligation of the Concessionaire:

Foundation

Carrying out Infrastructure (Roads and other infrastructure which comes under scope of work) development within the stipulated time period of 30 months. O&M period of 15 years and Handing over possession of project facilities in good operating condition at the end of the project.

Obligation of the Authority:

Timely handover of land for the purpose of carrying out works as per committed schedule. Granting relevant approvals, and assisting the Concessionaire in tasks such as regulating traffic whenever required.

Regulatory and Monitoring Arrangements:

Project is monitored as per contract by the Kerala PWD through an Independent Auditor appointed for the purpose.

Project Financing
Project Financials :

Foundation

The Concessionaire was responsible for all investments required to fulfil contractual obligations. Recovery for the Concessionaire was envisaged through annuity payments of Rs. 18 Crore from the Road Fund. Deductions could be made in the annuity amount based on factors such as delay in completion of works, default in Assured Availability during the O&M phase, etc. There was also a provision for enhancing the annuity amount in case of early completion of works.

Risk Sharing Mechanismm

Project risks and Allocation : Construction Risk :

Foundation

Time and Cost overruns due to contractor default : borne by the Operator. Overruns due to delays in handover by PWD : borne by PWD. Design Risk : borne by Concessionaire

Investment Risk:
Borne by Concessionaire

Performance Risk :
Borne by the operator

Policy Risk :
Borne by the Authority

Issues For Deliberation

Land Acquisition

Foundation

In this case, there was a significant delay in handing over the land which resulted in huge financial burden and project delay.

Co-ordination among Various-Stake holders

A key factor for a successful project

Project Preparation
Phasing of the project with realistic timelines for land

Factors attributing to Success

PPP for Urban Roads Improving the Quality of service.

Foundation

Urban (within city) roads can also be developed under PPP arrangement unlike short term contracts which deliver poor quality roads and have no liability for O&M.

Creation of Dedicated Fund mechanism Attracting private participation.

Increase the comfort level of the private sector for participating in such projects - particularly when the payment is made in form of fixed annuity.

Bringing monitoring into the mechanism Ensured quality of service.

Structuring operator remuneration accordingly in a way that monitoring is inbuilt into the mechanism and quality services are ensured. In this case the linking of annuity payments in O&M phase with factors such as Assured Availability of the entire carriageway acts as a monitoring device.

Annuity vs Modified Annuity

Pure Annuity
Annuity Quoted : Rs 18 Crore (Semi Annual) for 17.5 years Concession Period. NPV of Annuity Payment : Rs 271.48 Crore No Lumpsump grant paid during construction period. Total cost to exchequer: Rs 271.48 crores

Foundation

Modified Annuity
Likely Annuity Quote : Rs 13 Crore (Semi Annual) for 17.5*years Concession Period. NPV of Annuity Payment : Rs 126.04 crores Lumpsump grant paid during the construction period : 50% of civil construction cost = 83 crores Total cost to exchequer: Rs 209.04 crores

Benefit in adopting Modified Annuity Mode : Rs 62.44 crores

* A concession period of 17.5 years amounts to large payment of interest

components and other repayments. In order to get additional monetary benefit while adopting Modified annuity model, it is suggested to reduce the concession period to 10 Years.

Foundation

Comparison of Mass Rail Transport Systems in India

Mumbai Metro Vs Hyderabad Metro Vs Bangalore Metro Vs Delhi Metro

Project Concession Comparison

Particulars
Authority Concessionaire/ Operator/Owner (SPV)

Foundation

Mumbai Metro
MMRDA Mumbai Metro One Pvt Ltd : Comprising of Reliance Energy ltd, Veolia Transport, MMRDA BOOT 3 (Phase 1 , line 1 taken for this comparison) 35 Years 11 km 2 stage (EOI+RFP)

Hyderabad Metro Bangalore Metro

Govt Of Andhra Pradesh L&T Hyderabad Metro Rail Ltd: SPV formed by L&T

Delhi Metro
Govt of NCTD Govt of NCTD and Govt of India 50% each.

Govt of Karnataka Govt of India and Govt of Karnataka 50% each.

Mode Number of Phase/corridors Concession Period Length of Project Bidding Process

DBFOT 3

EPC 2

EPC 4 (Phase 1 taken for this comparison) 65.10 km(Phase 1) -

35 Years 71.16km 2 stage

42.30km -

Project Financial Comparison (1/2

Particulars
TPC (in Rs Cr.) Equity Stake of Pvt Party

Foundation

Mumbai Metro
2,356 74%

Hyderabad Metro

Bangalore Metro

Delhi Metro
10,571 crore 0%

12,132 (14,132) (164 14,642 billion) 90% 10% 0%

Equity stake of 26% Govt. Grant from Govt of India Grant from State Govt Debt Equity Ratio Rs Crores Rs Crores 70:30

30% equity stake (15% 30% (15% each of each of Govt of India & Govt of India & Govt of Karnataka) Govt of NCTD) NIL NIL NIL NIL

470 Rs 1,458 Crores 180 NIL 4:1

45% Debt from other 60% debt from sources +10% sub debt Japan + 3% from GOI and 15% sub Subordinated debt debt from Govt of Karnataka

Project Financial Comparison (2/2)

Particulars Mumbai Metro Hyderabad Metro Bangalore Metro
NIL

Foundation

Delhi Metro
7% Revenue from Property Development + Earning through registering Carbon Credit

Equity infused Rs Crores by pvt party/ Revenue Earned from pvt party

332 Rs 3440 crores

Equity infused by Govt

Rs Crores

180 NIL

Rs 4392 crore (Rs 2196 30% of TPC (15% crore each by Govt of India each by Govt of & Govt of Karnataka) India & Govt of NCTD)
Rs 3660 crore ( Rs 1464 crore sub debt from govt of India + Rs 2196 crore sub debt from Govt of karnataka) + Rs 6589 crore (debt from other sources)

Debt

Rs crores

1240 Rs 11,480 crores

63%

Project Risk Comparison (1/5)

Mumbai Metro Risk
Sensitivity Bearer

Foundation

Hyderabad Metro
Sensitivity Bearer

Bangalore Metro
Sensitivity Bearer

Delhi Metro
Sensitivity Bearer

Pre Operative Risks

Delays in land acquisition Financing Risks Planning Regulatory, administrativ e& approval delays

High Mediu m Mediu m Low

Govt Pvt Pvt Pvt

High Medium Medium Low

Govt Pvt Pvt Pvt

High Low Medium Low

Govt Govt Govt Govt

High Low Medium Low

Govt

Govt

Govt

Govt

Project Risk Comparison (2/5)

Mumbai Metro Risk
Sensitivity

Foundation

Hyderabad Metro
Bearer

Bangalore Metro
Sensitivity Bearer

Delhi Metro
Sensitivity Bearer

Bearer Sensitivity

Construction Phase Risk

Design Risk Medium
Construction Medium Low Pvt Pvt Govt Medium Medium Low Pvt Pvt Govt Medium High Low Pvt Govt Govt Medium High Low Pvt Govt Govt

Risk Change in Scope Risk Financing Risk

Medium

Pvt

Medium

Pvt

Low

Govt

Low

Govt

Project Risk Comparison (3/5)

Mumbai Metro Risk
Sensitivity Bearer

Foundation

Hyderabad Metro
Sensitivity Bearer

Bangalore Metro
Sensitivity Bearer

Delhi Metro
Sensitivity Bearer

Operational Phase Risk

Technology Risk Operations & Maintenance Risk Market Risk Performance Risk
Low
Medium

Pvt/ Govt Pvt

Low Medium

Pvt/ Govt Pvt

Low Low

Govt Govt

Low Low

Govt Govt

High High

Pvt/ Govt Pvt

High High

Pvt/ Govt Pvt

Low Low

Govt Govt

Low Low

Govt Govt

Project Risk Comparison (4/5)

Mumbai Metro Risk
Sensitivity Bearer

Foundation

Hyderabad Metro Bangalore Metro

Sensitivity Bearer Sensitivity Bearer

Delhi Metro
Sensitivity Bearer

Handover Risk
Handover Risk Private Operator Event of Default Authority Event of Default

Low Low

Pvt Pvt

Low Low

Pvt Pvt

NA NA

NA NA

NA NA

NA NA

Low

Govt

Low

Govt

Low

Govt

Low

Govt

Project Risk Comparison (5/5)

Mumbai Metro Risk
Sensitivity Bearer

Foundation

Hyderabad Metro Bangalore Metro

Sensitivity Bearer Sensitivity Bearer

Delhi Metro
Sensitivity Bearer

Other Risks
Interface Risk (with other metro corridors) Force Majeure Change in Law Risk
Medium Pvt NA NA NA NA NA NA

Low Low

Pvt/ Govt Pvt

Low Low

Pvt/ Govt Pvt

Low Low

Govt Govt

Low Low

Govt Govt

Foundation

Pooled Financing by ULBs

Greater Bangalore Water and Sewerage Project

Foundation

GBWASP involving Innovative Financial Instruments of Pooled Financing by ULBs & Beneficiary Capital Contribution in which Citizens act as Equity Stakeholders

Background

Foundation

Greater Bangalore Water and Sewerage Project (GBWASP) was initiated in 1998, to supply 135 lpcd of clean piped water and sanitation to the 8 ULBs of Bangalore, over a 6 year period
Targeted to 1.5 Million people , in 300,000 households in peri-urban areas

Timelines
1998
CM directed BWSSB to prepare proposals

1999
DPR Prepared

2000
Proj. abandoned by GoK > High Cost, Lack of Fin. Resources

2003
Proj. ResurrectedMarket Based Financing Window for GBWASP

2006
Period of Opposition to the Concept by Local community

2009
Project was stalled

Concept

Foundation

A Market based financing window is established, so as to enable the small and medium urban local bodies (ULBs) to access the capital market for their debt requirements The ULBs pool their resources to get an investment-grade credit rating, so as to borrow from the market by releasing a Bond.

Key Stakeholders in GBWASP

Governing Body Gov. Of Karnataka (GoK)

Foundation

Relevant Parasatal Body & ULB

Bangalore Water Supply and Sewerage Board (BWSSB) Karnataka Urban Infrastructure Dev Corp. (KUIDFC) Beneficiaries

Bruhat Bengaluru Mahanagra Pallike (BBMP)

Trust Managers (State Gov)

United States Agency for Int Dev. (USAID)

Third Party Guarantee

Bangalore Citizens in PeriUrban Areas

Financing Structure
Stakeholders
Amount (Rs Crore) Contribu tion %

Foundation

Revised Contributi on %

Total Project Cost Rs 471.58 Cr The Funds raised by BWSSB to Finance the Development of Water Supply & Sanitation project (GBWASP).

Beneficiary Contribution Grants from GoK Mega City Loan from GoI Market Borrowings through Bonds Total (2003 estimate) Cost escalation Revised total (2007) Additional amount sourced through JNNURM for 100 MLD augmentation

119.45 74.28 46.82 100 340.55 106.51 447.06 12.26

35 22 14 29

>35 17 >14 22

Pooled Financing Model

GoK
Project Steering Committee KUIDFC Bond Market BWSSB

Foundation

Bond Features
Value -:Rs 100 Cr I - 5.95% (Tax Free) N:- 15 years

In-House PMC Private Placement KWSPF Trust

Water project (Escrow)Account Bond Service Fund
25% : of principal upfront by the state gov. Monthly DSR transfers ~ 1/10th annual amount Payment

Beneficiaries

Third Party Guarantee-USAID @ 50% for 15 yrs

BBMP (8 ULBs)

Beneficiary Capital Contribution (BCC)

Concept
Citizens as stakeholders BCC from citizens @ ~ 35% of the Projects total capex A one-time upfront payment Monthly Fine imposed on account of delay post cut off date- 31st July, 2005 New Buildings to pay prior to approval by Building Plans In one ULB, Rs 50 crore was collected between 2004-2008 GoK conceded a full waiver for households living in dimensions of less than 600sqft.

Foundation

Impact Collections before start construction Janaagraha NGO, contracted for public awareness, pulled out later labelling BCC as an anti-Poor Scheme

Pooled Finance Development Fund

In 2006,GOI set up a Pooled Finance Development Fund (PFDF), with a corpus of Rs 4 billion
A Credit Rating Enhancement Fund (CREF) for lowrated small and medium size ULBs, so as to facilitate better capital market access

Foundation

This fund conceded ~ Rs 12.3 crores for GBWASP Project

Issues For deliberation (1/3)

1) Failure of BCC Initiative
Cited as the case of Cart before the Horse

Foundation

The step of collecting BCC, was given preference over other stages of project implementation such as - financial closure, contract award, commencement of construction work & giving connections to beneficiaries

Poor dissemination of information to the citizens by BWSSB & KUIDFC officials on the projects progress. Change of 7 top officials during 18-24 month period.
Technical Consultants were US Based with little knowledge about the ground realities in India (proportionately fewer local consultants)

Project Alandoor (Sewerage System Improvement) in Tamil Nadu, successfully implemented the concept of BCC. Reasons being: Positive response in the Willingness to Pay Survey done beforehand Political commitment and strong information dissemination by the chairman and Municipal Council on project progress.

Issues For deliberation (2/3)

Patterns

Foundation

2) GBWASPs Model is Disconnected from Urbanisation

The peri-urban areas were haphazardly developed, few were unauthorized.
Difficultly to contractors in laying pipelines Little adherence to legal norms regarding public ownership of space, led to greater time in negotiations

3) Peri-Urban population to bear the capital costs, when the urban population would have been benefited equally due to an interconnected-networked infrastructure

Issues For deliberation (3/3)

4) Lukewarm response from Investors
Low Spread (0.5%) over G-Sec compared to contemporary municipal bonds & fewer exit options (no call/put option) Available bond proceeds not utilized for 3 years due to slow progress in construction
Tamil Nadu WSPF, was a success. Higher Coupon Rate of 9.2%, Put/Call Option

Foundation

KWSPF Concept became a failure

Foundation

Development of Modern Bus Terminal at Amritsar on Build Operate Transfer (BOT) Framework

Foundation

Build Operate Transfer (BOT) Mechanism to Develop an Interstate Bus Terminal on Land provided by Punjab Infrastructure Development Board

Background
The Terminal Facility in Amritsar, built in 1963 was in an old, dilapidated condition and declared unsafe for operation in 1992

Foundation

The growing traffic needs of the city demanded the Construction and Renovation of the Terminal Facility Punjab Infrastructure Development Board (PIDB) was contracted on behalf of Department of Transport (DoT), Government of Punjab to develop the Modern Bus Terminal Project at Amritsar

Objective

Foundation

To build a Modern Inter-City Bus-Terminal, to cater to the needs of the increasing traffic in the city
To equip the existing dilapidated terminal, with modern facilities

Project Snapshot
Award Date: February 2004 ULB: Amritsar, Punjab

Foundation

Land: Provided by PIDB on a concession. Type & Period of concession: Build-Operate-Transfer Concession (BOT) for 11 years and 5 months Contracting Authority: Department of Transport (DoT), State Government of Punjab Concessionaire: Special Purpose Vehicle (SPV) - Rohan & Rajdeep Infrastructure Private Limited (RRIPL) Present Status of Project: The Bus Terminal is operational since 2005

Project Development
PIDB carried out the Technical Feasibility Studies. The Project was developed on a PPP Framework DoT, undertook the process of selection of Concessionaire through a competitive bidding process

Foundation

Private Player Selection Criterion: 1 project of minimum value of Rs.5 Cr or 2 projects of min value of Rs.2 Cr each in past 5 years in sectors of real estate, airports, public utility buildings Bid Parameter: Minimum Concession Period (11.4 yrs) A Special Purpose Vehicle (SPV) called Rohan and Rajdeep Infrastructure Private Limited (RRIPL), formed between 3 companies: Rohan Builders (India) Pvt. Ltd, Rajdeep Buildcon Pvt. Ltd and Rajdeep Road Developers Pvt. Ltd

Obligation of Parties

Foundation

Timely transfer of the existing facility (90 days) to the Operator Assistance in obtaining various clearances
Authority

Development and management of an interim facility during the

construction of new facility

Honouring the Non-Compete clause-preventing the creation of any

new facility within a distance of 10km

Design, Construction, Operation and Management of the Bus

Terminal

Construction of the facility within 18 months of award of the

Concessionaire

contract

Maintenance of bus terminal and related facilities To regulate the bus, pedestrian & intermediate passenger
vehicles movement

Contractual Arrangements
Extra contractual guarantee for ensuring demand through directive to all bus operators to use the facility

Foundation

Concessionaire

RRIPL
Design & Construction of the Terminal Facility Operation incl. deployment of adequate staff. Traffic & Movement management and Planning

DoT

Handover of land Ensure non competition

MODERN BUS TERMINAL COMPLEX

Undertake Development

ADDA FEES Representation of the board

COMMERCIAL SPACES NIGHT PARKING FEES

LEASE OF

Revenue

MAINTENANCE BOARD Monitor project progress Oversight Arrangement

ADVERTISEMENTS

Representation On the board

Project Financials

Foundation

The Project Cost of Rs. 19 crores funded by Equity (Rs. 7 crores) and debt (Rs. 12 crores, 11 year tenure) Investments for Construction, Maintenance & Operations to be borne by Concessionaire
Cost of the temporary facility was borne by DoT

Sources of Revenue:
Bus adda fees, night parking charges, advertisement revenue and revenue from lease of commercial spaces. Revenue protected through non-compete clause. Night Parking Fees Revenue Sharing Model: Payment of Annual Fee by the private Player to the Authority

Project Risk Allocation (1/2)

Type of Risk Demand Risk Allocation Gov. Private Player Justification

Foundation

Associated with forecasting the level of traffic The Concessionaire mitigated the risk through: The non-compete Issuance of a Gov. Order directing all buses operating in Amritsar to halt at the Terminal. Includes Cost and Time overruns. No relaxation in contract duration in case of delays due to Concessionaire default. Post construction defects emanating from faulty design/execution O&M was to be conducted on the basis of an approved O&M manual and supervised periodically by the Maintenance Board

Construction

Operation

Project Risk Allocation (2/2)

Type of Risk Performance Risk Allocation Gov. Private Player Justification

Foundation

Borne through a Performance Security valid throughout the period of the concession (to be invoked in case of termination due to Operator default) The Concessionaire was protected through commensurate extensions in the concession period or in the event of termination through appropriate termination payments

Force Majeure

Issues for deliberation

Foundation

Avoidance of payment of Adda Fees by private busoperators

This led to underutilization of the terminal commercial spaces Lack of coordination between the operator (regulating traffic within) & city traffic authorities This led to major traffic jams within and in the vicinity of bus terminal

Project Shortcomings (2/2)

Need for Public Agencies to honour their commitments

Foundation

Inability of DoT to enforce its order directing all bus operators to use the facility (demand risk) led to losses for the operator Mitigating Measure: Suggested to retain the demand risk by the Concessioning Authority

Inclusion of a stringent technical criterion for the operator qualification- prior traffic management or regulation experience or Suggested to retain the traffic management and planning responsibility by the concessioning authority

Foundation

NDMC Multi Level Parking Projects Under Public Private Partnerships

Multilevel Parking Projects of NDMC

Foundation

New Delhi Municipal Council provides civic services to an estimated 3% of the population covering an area of 42.74 square Kilometers. In addition 15 lakh people commute to commercial complexes and government offices in NDMC area NDMCs obligations include provision of parking spaces

In 2005, NDMC identified 2 parking sites to be developed as Multilevel Parking projects under PPP framework (BOT) - \Sarojini Nagar & Baba Kharag Singh Marg

Baba Kharag Singh Marg - Site Location

Foundation

Sarojini Nagar Site Location

Foundation

Project Structuring (1/2)

Foundation

1. Project given on BOT basis for 30 years. 2. Scope of Project - Concessionaire to design, construct, operate & maintain in a commercially viable framework, a parking cum commercial complex 3. Bid Parameter was number of car spaces (ECS) so as to maximizes the car spaces - a minimum was prescribed 4. Development Control Guidelines - 25% commercial area to make project viable 5. Negative list of activities/structures in commercial area permitted so as to discourage activities which cause undue congestion 6. Technology Option flexibility: Technology choice left to Bidder for innovations in design and costs provider customer convenience is guaranteed.

Project Structuring (2/2)

7. Fixed Concession fees is paid on a year on year basis

Foundation

8. Surface parking areas in the immediate vicinity , if any to be managed by Concessionaire 9. Concessionaire would be responsible of getting the clearances from DDA, Traffic etc on the proposed layout plan incl. traffic circulation and management plan. All Clearance from DUAC, DMRC, Fire Department etc 10. Projects to be commissioned by Common Wealth Games

Project Financials

Foundation

Total Project Cost: Rs 300 crores Financing Arrangements by the Government Debt: Equity 1.00
Interest Rate-9.5% Loan Tenure-7 years

Rigorous & Transparent Bid Evaluation Process

A two stage qualification process was followed
Check for eligibility : 16 parties were short listed.

Foundation

The Proposals were submitted by 5 parties 4 for Baba Kharag Singh Marg 3 for KG Marg & 2 for Sarojini Nagar. Check for soundness of Technical Proposal : The Technical Proposals was evaluated by a team of experts from IIT and NDMC. Only those proposals which met the stringent requirements of the tender - the benchmark scores - were eligible for the techno commercial evaluation. Techno Commercial parameter the bidder offering the highest number of car spaces in the project facility, was declared the preferred bidder

Stringent Conditions for Construction and O&M

Foundation

The construction of Project Facilities shall be in accordance with the Development and Design Control Norms, Construction requirements and O&M requirements which are provided in the Bid documents. An Independent Engineer would monitor the project construction and O&M

Outcome
Location Successful Bidder

Foundation

Total Demand to be ECS to be provided catered by 2020 by the Bidder

H.T. Bldg, KG Marg BKS Marg Sarojini Nagar

DS Constructions Limited DLF Limited DLF Limited

1478 1064 1583

1582 1408 824**

*3 ECS per 100 sqm ** Two sites are proposed Source Study commissioned by IDFC.

Project Investments ~Rs 300 Crores.

Foundation

Supporting Slides

BCC Breakup
BCC < 600 sq ft Residential Commercial Penalty Per Month 2,500 (now waived) 5,000 50 (waived later) Charges per Property Size (Rs) < 600 sq ft 5,000 10,000 100 1,200-2,400 sq ft 10,000 20,000 200

Foundation

>2,400 sq ft 15,000 Rs 8/sq ft 300

Bond Yield

Foundation

Comparison of Bond Coupon with 10 year G-Sec yield

Net Returns to Investors, much less than the returns by GSec

Modified Annuity: approach

Sources of finance

Foundation

The funding pattern may involve the WB/ADB lump sum payment of 50% of the estimated construction cost and the balance will be funded by the concessionaire. The contribution by WB/ADB will be given to the Concessionaire in two stages First stage payment being made on the physical completion of 50% of the project road Second being made on the completion of all works as stipulated in the initial scope of works and certified by the IE. Remaining amount will be arranged by the concessionaire in the form of debt and equity in 70:30. Equity: To be provided by the Developer Debt : To be arranged by the Developer / Concessionaire.

Modified Annuity: Risk

Foundation

Lump sum payment to be made after 50% of the Civil construction cost is invested by the developer. 100% risk lies with the concessionaire till 50% of the investment After investing the entire amount, the developer will receive a lump sum payment of 50% of the total civil construction cost. Post 100% investment, developer borne 80% risk and Authority has 20% risk , but the overall outgo of the government is reduced.