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7/24/2019 23 Gujarat PPP Bhattacharya
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Scheme of the PresentationScheme of the Presentation
§§ Legal framework & Institutional Setup for PPPLegal framework & Institutional Setup for PPP
§§ Bombay Motor Vehicles Tax Act, 1958 (1994 amendment)Bombay Motor Vehicles Tax Act, 1958 (1994 amendment)
§§ Road PolicyRoad Policy 19961996
§§ Gujarat Infrastructure Development Act, 1999Gujarat Infrastructure Development Act, 1999
§§ Permissible assistance under GID Act, 1999Permissible assistance under GID Act, 1999
§§ Role of GIDBRole of GIDB
§§ GGSRDCSRDC
§§ Role of GSRDCRole of GSRDC
§§ PPlanning for PPPlanning for PPP§§ PPP Project Development ProcessPPP Project Development Process
§§ AAchievements in PPP in SHchievements in PPP in SH
§§ Evolution of PPP ProjectsEvolution of PPP Projects§§ Lessons learnt on PPPLessons learnt on PPP
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Legal Framework & InstitutionalLegal Framework & Institutional
Setup for PPPSetup for PPP¤¤ 1994: Bombay Motor Vehicles Tax Act, 19581994: Bombay Motor Vehicles Tax Act, 1958
amendedamended¤¤ 1995: GIDB established through a Govt.1995: GIDB established through a Govt.
ResolutionResolution
¤¤ 1996: Road Policy covering PPP1996: Road Policy covering PPP
¤¤ 1999: GIDB backed up by legislation1999: GIDB backed up by legislation
¤¤ 1999: GSRDC set up1999: GSRDC set up
¤¤ 2006 :2006 : GujGuj. Infra. Dev. Act, 1999 amended. Infra. Dev. Act, 1999 amended
¤¤ 2006: Tolling Policy under preparation2006: Tolling Policy under preparation
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Bombay Motor Vehicles Tax Act,Bombay Motor Vehicles Tax Act,
1958 (1994 Amendment)1958 (1994 Amendment) Enabling provision on TollingEnabling provision on Tolling
Tolling permitted on Bridges and its approaches,Tolling permitted on Bridges and its approaches,section of a new road and bypassessection of a new road and bypasses
Tolling allowed forTolling allowed for
•• construction, reconstruction, improvements andconstruction, reconstruction, improvements andrepair of above facilitiesrepair of above facilities
•• or if such facility is of special service to theor if such facility is of special service to the
publicpublic
Tolling allowed for investments more than Rs. 50Tolling allowed for investments more than Rs. 50
LakhsLakhs by the State Govt. and other personby the State Govt. and other person
Tolling to cover capital outlay, returns and tollTolling to cover capital outlay, returns and toll
collection expensescollection expenses
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Road Policy 1996Road Policy 1996Support to PPP ProjectsSupport to PPP Projects
¤¤ Land Acquisition by Govt.Land Acquisition by Govt.
¤¤ RoWRoW to be provided to concessionaire freeto be provided to concessionaire freeof cost on a case to case basisof cost on a case to case basis
¤¤ Subsidizing loss of revenue due to lowSubsidizing loss of revenue due to low
traffic than projectedtraffic than projected
¤¤ Exemption from royalty on constructionExemption from royalty on construction
materialmaterial
¤¤ Allowing construction in segments & levyingAllowing construction in segments & levying
toll on completed sectionstoll on completed sections
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Gujarat InfrastructureGujarat Infrastructure
Development Act, 1999Development Act, 1999¤¤ Provides a framework for PSP in financing,Provides a framework for PSP in financing,
construction, maintenance & operation ofconstruction, maintenance & operation of
infrastructure projects including Roads, Bridgesinfrastructure projects including Roads, Bridges& Bypasses& Bypasses
¤¤ Competitive, Transparent & Fair Bidding forCompetitive, Transparent & Fair Bidding for
developer selectiondeveloper selection¤¤ Unsolicited offers to be put throughUnsolicited offers to be put through ‘‘ChallengeChallenge
BiddingBidding””
¤¤ Projects under Schedule III (Projects of SpecialProjects under Schedule III (Projects of SpecialNature) may be offered by Direct NegotiationsNature) may be offered by Direct Negotiations
¤¤ Maximum concession period of 35 yearsMaximum concession period of 35 years
¤¤ Option for extension of Concession PeriodOption for extension of Concession Period
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Gujarat InfrastructureGujarat Infrastructure
Development Act, 1999Development Act, 1999¤¤ Provides for levy of user charges forProvides for levy of user charges for
providing goods & services by a projectproviding goods & services by a project
¤¤ It has provisions on Financial SecurityIt has provisions on Financial Security
for maintenance of project, Terminationfor maintenance of project, Terminationand Project Transferand Project Transfer
¤¤ All Infrastructure projects in theAll Infrastructure projects in the
Schedule I are required to adhere toSchedule I are required to adhere to
provisions of the Act.provisions of the Act.
¤¤ 12 main nature of Concession12 main nature of Concession
Agreements have been spelt outAgreements have been spelt out
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Permissible Assistance by the StatePermissible Assistance by the State
Govt. under Gujarat InfrastructureGovt. under Gujarat Infrastructure
Development Act, 1999Development Act, 1999
¤¤ Equity participation max. 49% of the EquityEquity participation max. 49% of the Equity
¤¤ Financial Assistance max. 20% of theFinancial Assistance max. 20% of the
Project CostProject Cost¤¤ No financial assistance for Unsolicited OffersNo financial assistance for Unsolicited Offers
¤¤ Senior or subordinate loansSenior or subordinate loans
¤¤ GuaranteeGuarantee
¤¤ Conferment of right to develop any landConferment of right to develop any land
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RoleRole of GIDBof GIDB Policy, Planning, Project Development, Project ProposalPolicy, Planning, Project Development, Project Proposal
Preparation, Project Appraisal, Statutory Roles, AdvisoryPreparation, Project Appraisal, Statutory Roles, Advisory
activitiesactivities
Encompasses almost all infrastructure sectors in State list andEncompasses almost all infrastructure sectors in State list andRailways & Aviation in Central listRailways & Aviation in Central list
Planning for overall infrastructure developmentPlanning for overall infrastructure development
Planning for integrated development with interPlanning for integrated development with inter--sectoralsectoral linkageslinkages CoCo--ordinate with sector linked executing agencies andordinate with sector linked executing agencies and
DepartmentsDepartments
Project Development activitiesProject Development activities Project AppraisalProject Appraisal
Proposal development by means ofProposal development by means of conceptualisingconceptualising project,project,
Feasibility studies, Project structuring, FinancialFeasibility studies, Project structuring, Financial AnaysisAnaysis etc.etc.
Documentation of projects for bidding on PPPDocumentation of projects for bidding on PPP
Capacity Building in PPPCapacity Building in PPP
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GSRDCGSRDC
Set up as a Govt. Company under CompaniesSet up as a Govt. Company under Companies
ActAct
Administrative linkage with Roads & BuildingsAdministrative linkage with Roads & Buildings
Dept.Dept.
Board Chaired by the Minister R&BDBoard Chaired by the Minister R&BD Board has professional directorsBoard has professional directors
GSRDC articles mandates for raising financesGSRDC articles mandates for raising finances
from the market for project developmentfrom the market for project development
GSRDC to promote PPP in Road sectorGSRDC to promote PPP in Road sector
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Role of GSRDCRole of GSRDC
Project identification, development activities,Project identification, development activities,
documentation, procurement with respect todocumentation, procurement with respect to
State Highways onlyState Highways only
PrePre--construction activities like utility shiftingconstruction activities like utility shifting
and land acquisition with Dept. interventionand land acquisition with Dept. intervention
Facilitation in approvals and statutoryFacilitation in approvals and statutory
clearancesclearances
Monitoring of construction activitiesMonitoring of construction activities
Administration of contracts and ConcessionAdministration of contracts and Concession
AgreementsAgreements
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PlanPlanning for PPPning for PPP
¤¤ 1996: Road Development Plan1996: Road Development Plan UptoUpto 2010 by2010 by
Roads & Buildings Dept.Roads & Buildings Dept.¤¤ 19971997--98:Gujarat State Highway Project (World98:Gujarat State Highway Project (World
Bank Aided Programme)Bank Aided Programme)
¤¤ 19971997--99: Integrated Master Development Plan99: Integrated Master Development Plan
for Transport Sector in Gujarat by TCSfor Transport Sector in Gujarat by TCS
¤¤ 1999:Vision 2010 by GIDB1999:Vision 2010 by GIDB¤¤ 2006: Blueprint for Infra. in Gujarat2006: Blueprint for Infra. in Gujarat –– 20202020
¤¤ 2006: Updated2006: Updated SoSSoS for World Bank fundingfor World Bank funding
¤¤ 2006: Planning for SHDP in line with NHDP2006: Planning for SHDP in line with NHDP
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PPP Project DevelopmentPPP Project Development
ProcessProcessInter-sectoral & Sectoral
Planning
Inter-sectoral & SectoralPlanning
Project IdentificationProject Identification
Project conceptualization& Development
Project conceptualization& Development
Project DocumentationProject Documentation
Project Appraisal,
Approval under GID Act
Project Appraisal,
Approval under GID Act
Submission toGIDB Board
Project BiddingProject Bidding
Land Acquisition, UtilityShifting, Forest Clearance,
Environment Clearance
Land Acquisition, UtilityShifting, Forest Clearance,
Environment Clearance
Selection of DeveloperSelection of DeveloperVGF/SubsidyVGF/Subsidy
Submission to MoF, GoI &Finance. Dept., GoG forapproval of VGF/Subsidy
Submission to MoF, GoI &Finance. Dept., GoG forapproval of VGF/Subsidy
ApprovalApproval
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Achievements Achievements in PPP Projectsin PPP Projects
onon SHsSHsOPERATIONAL PROJECTSOPERATIONAL PROJECTS
ROB near GNFC Bharuch (Two lane)ROB near GNFC Bharuch (Two lane)
IchhaporeIchhapore--HaziraHazira Road (10 km) (Four Lane)Road (10 km) (Four Lane)
Additional two lane major bridges across three rivers on NHAdditional two lane major bridges across three rivers on NH--88
ROBROB ChalthanChalthan on NHon NH--88
RajkotRajkot--AhmedabadAhmedabad (on NH(on NH--8) Road Four laning (HUDCO Financed)8) Road Four laning (HUDCO Financed)
VadodaraVadodara--HalolHalol Road (32 km) (Four lane + service roads)Road (32 km) (Four lane + service roads)
AhmedabadAhmedabad--MehsanaMehsana Road (52 km) (Four lane + service roads)Road (52 km) (Four lane + service roads)
ChhayapuriChhayapuri ROB (four lane)ROB (four lane)
HimmatnagarHimmatnagar Bypass (two lane with PSS)Bypass (two lane with PSS)
Continued….
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Achievements Achievements in PPP Projectsin PPP Projects
onon SHsSHsPROJECTS UNDER CONSTRUCTIONPROJECTS UNDER CONSTRUCTION
KimKim--MandviMandvi Road (Two lane with PSS)Road (Two lane with PSS)
BhujBhuj--NakhtranaNakhtrana Road (Two lane with PSS)Road (Two lane with PSS)
Continued….
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Achievements Achievements in PPP Projectsin PPP Projects
onon SHsSHsPROJECTS UNDER BIDDINGPROJECTS UNDER BIDDING
DeesaDeesa--PanthawadaPanthawada--GundariGundari Road (Two lane withRoad (Two lane with
PSS)PSS)
UNDER VGF SCHEME OF GOIUNDER VGF SCHEME OF GOI
RajkotRajkot--JamnagarJamnagar--VadinarVadinar Road (127 km) (FourRoad (127 km) (Four
Laning)Laning)
HalolHalol--GodhraGodhra--ShamajiShamaji Road (170 km) (Four Laning)Road (170 km) (Four Laning)
AhmedabadAhmedabad--ViramgamViramgam--MaliyaMaliya Road (180 km) (FourRoad (180 km) (Four
Laning)Laning)
E l ti f PPP P j tE l ti f PPP P j t
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Evolution of PPP ProjectsEvolution of PPP Projects19961996--1999:1999:
Projects are of preProjects are of pre--GSRDC and GIDB eraGSRDC and GIDB era
All projects of the first generation of BOT projectsAll projects of the first generation of BOT projects
VadodaraVadodara--HalolHalol andand AhmedabadAhmedabad--MehsanaMehsana Toll Roads awarded onToll Roads awarded on
nomination basisnomination basis –– second generation of BOT Projectssecond generation of BOT Projects
Huge secured returns in todayHuge secured returns in today’’s market conditionss market conditions
Govt. to provide support for achieving returnsGovt. to provide support for achieving returns
State Govt. participated in EquityState Govt. participated in Equity
Traffic Risk pass throughTraffic Risk pass through
Tolling prohibited within 50 km radius of the facilityTolling prohibited within 50 km radius of the facility
Restriction in developing competing routeRestriction in developing competing route
However, Performance Standards were attemptedHowever, Performance Standards were attempted
RajkotRajkot--AhmedabadAhmedabad (on NH(on NH--8A) four8A) four lanedlaned with HUDCO creditwith HUDCO credit
Not a BOT projectNot a BOT project
Only tolling and maintenance activities outsourced, all risks wiOnly tolling and maintenance activities outsourced, all risks with theth the
State Govt.State Govt.
Maintenance expenditure from State BudgetMaintenance expenditure from State Budget Continued….
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Evolution of PPP ProjectsEvolution of PPP Projects1999 onwards:1999 onwards:
Projects put are under the transparent bidding procedures of GIDProjects put are under the transparent bidding procedures of GID
Act, 1999Act, 1999
Projects are of the third generation of BOT ProjectsProjects are of the third generation of BOT Projects
Two four laning of road projects failed to secure developers asTwo four laning of road projects failed to secure developers as
subsidy was demandedsubsidy was demanded
RoBRoB projects successful on standaloneprojects successful on standalone
Development concentrated on two laning projectsDevelopment concentrated on two laning projects
First project with upfront subsidy awarded (pre VGF Scheme)First project with upfront subsidy awarded (pre VGF Scheme)
Centre announces VGF Scheme for support to PPP in InfrastructureCentre announces VGF Scheme for support to PPP in Infrastructure
projectsprojects
Four laning project development revived thanks to VGF SchemeFour laning project development revived thanks to VGF Scheme
L l PPP
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Lessons learnt on PPPLessons learnt on PPP
¤¤ On State Highways only bridges and some bypasses may becomeOn State Highways only bridges and some bypasses may becomefinancially viable on toll alonefinancially viable on toll alone
¤¤ Four lane divided facility on SH invariably requires capital subFour lane divided facility on SH invariably requires capital subsidysidy
¤¤ Even two lane roads with paved side shoulder may requireEven two lane roads with paved side shoulder may require
subsidysubsidy
¤¤ All roads cannot be developed on BOTAll roads cannot be developed on BOT
¤¤ Care in selection of road stretches for developing on PPPCare in selection of road stretches for developing on PPP
¤¤ Subsidy results in leveraging of State resourcesSubsidy results in leveraging of State resources
¤¤ Subsidy compared with industrial subsidySubsidy compared with industrial subsidy
¤¤ Subsidy is difficult to come through Finance Dept. of State GovtSubsidy is difficult to come through Finance Dept. of State Govt..
¤¤ Concession Agreement should beConcession Agreement should be standardisedstandardised
¤¤ Scope of project should be clearly defined for developing on BOTScope of project should be clearly defined for developing on BOT
¤¤ Two and three wheelers should not be tolledTwo and three wheelers should not be tolled
¤¤ Economic development due to highway development should yieldEconomic development due to highway development should yield
to revenue generationto revenue generationContinued….
L l PPPL l t PPP
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Lessons learnt on PPPLessons learnt on PPP¤¤ GID Act ensures transparent biddingGID Act ensures transparent bidding
¤¤ Tolling / User Charges appreciated only when it provides value f Tolling / User Charges appreciated only when it provides value f oror
money to the usersmoney to the users
¤¤ Local traffic needs to be carefully defined considering politicaLocal traffic needs to be carefully defined considering political andl and
revenue risks associated with itrevenue risks associated with it
¤¤ AtAt--grade junctions are in mixed traffic situation and therefore pubgrade junctions are in mixed traffic situation and therefore publiclic
pressure for construction of bumps, especially in urban areaspressure for construction of bumps, especially in urban areas
¤¤ IncreasedIncreased LoSLoS and enhanced safety at junctions by providingand enhanced safety at junctions by providing
flyovers/ grade separatorsflyovers/ grade separators
¤¤ Throughout service roads results in leakage of traffic and revenThroughout service roads results in leakage of traffic and revenueue
lossloss
¤¤ Care be taken that Design & Maintenance risks are transferred toCare be taken that Design & Maintenance risks are transferred to thethe
ConcessionaireConcessionaire
¤¤ Maintenance timing and cost are difficult to predict andMaintenance timing and cost are difficult to predict and
Concessionaire generally reluctant to be responsibleConcessionaire generally reluctant to be responsible
¤¤ Maintenance related Performance Standards are difficult toMaintenance related Performance Standards are difficult to
implement even when IC is presentimplement even when IC is present
Continued….
L l t PPPL l t PPP
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Lessons learnt on PPPLessons learnt on PPP
¤¤ Outsourcing of knowledge activities per se is not an end in itseOutsourcing of knowledge activities per se is not an end in itself lf
¤¤ Capacity building & accountability of the implementing agency beCapacity building & accountability of the implementing agency be
ensuredensured
¤¤ Shortage of well skilled professionals in PPP domain andShortage of well skilled professionals in PPP domain andHighwaysHighways
¤¤ Reluctant participation & no commitment of the other wings ofReluctant participation & no commitment of the other wings of
Govt. in PPP processGovt. in PPP process
¤¤ At least major PreAt least major Pre--construction activities like land acquisition,construction activities like land acquisition,
forest clearance and utility shifting must be completed beforeforest clearance and utility shifting must be completed before
signing of Concession Agreementsigning of Concession Agreement
¤¤ Concession Agreement should provide flexibility in modificationConcession Agreement should provide flexibility in modification
of design during construction stageof design during construction stage
¤¤ Failures of experiments in PPP are answerable to various Govt.Failures of experiments in PPP are answerable to various Govt.
agenciesagencies
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Roads & BuildingsDepartment
www.rnbgujarat.org
Gujarat Infrastructure
Development Boardwww.gidb.org
Gujarat State Road
Development Corp.Ltd.
www.gsrdc.com
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I i i l I i U dI tit ti l I t ti U d
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Institutional Interaction UnderInstitutional Interaction Under
Rules of BusinessRules of Business Approval / Recommendation / Return
Concession Agreement & Project Proposal
Project
Bidding
Budgeting & Administrative Concession Approvals Design (Not a mandatory one)
Planning & Budgeting Vesting of land Toll Admin. (for projects under BMV Tax Act)
Land Acquisition Traffic Admin.
Safety & Protectionm
Compensation
Financial Approval
Budgetary provision
Approvals of the
Dept./ Govt .
Planning
Land Acquisition&
GIDB
Govt. Agency
(GSRDC)R&B Dept
GAD
(Planning)
Finance
Department
Revenue
DepartmentHome
Department
Legal
Department
Competent
Authori ty
(LAA)