Project Management PPP.pdf

8/14/2019 Project Management PPP.pdf

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Anamitra LahiriAshok Prasad

Ava a Kumar A asi

Daneshwar Kumar

Deepak Kumar Acharya


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WhatisaProject?

Temporary UniqueCharacteristics of

Temporary Definitivebeginningandend

,


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Existing ScenarioMosttownsandcitiesaregrowingLikethis!

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Quality of life

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How we co e resentl

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Continued growth rate of an economy rests on the provision of aQuality infrastructure.

o e ross omes c ro uc or nee s o e nves e .

Fund investment of over US $ 494 billion has been conceived ofaccording to the 11th Five Year Plan with effective from 2007 to

.

The investment sectors under consideration includes:

Telecommunications,

Electric power,

water transport,

Road Rail air water su l as well as irri ation.

Amounts to about Rs. 20,27,169 croe according to 2006-07 prices.

In order to meet such demands, various Public Private

infrastructure projects


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PPP Approach

Attract private investments for infrastructure projectsGoal

Lack of Budgetary Resources Need to improve efficiency in service deliveryNeed

PPPapproach

Private Sector contribution for: - Financial investments

- Best Management practices-

- Efficient use of capital resources

Public Sector contribution limited to:

- Providing institutional commitment to project - Project Development & Selection of Developer - Viability gap funding (VGF), if any

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WhatisPPP? It Is a Public Private Partnership.

A partnership between the public sector and the private sectorfor the ur oses of deliverin a ro ect or a service traditionallprovided by the public sector.

At the heart of every PPP project is :

To create better value for money (VFM)throu h the ex loitation o rivate sector

competencies and the allocation of risk to theparty best able to manage it.


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Formsof

PPPTherearesixformsofPPP:

CreatingwiderMarket.

Privatefinanceinitiatives(PFI).

JointVentures.

Partnershi Com anies.

Partnershipinvestments.

Franchises.

BOTBuild,Operate,Transfer

BOO Build,Own,Operate

BOOT Build,

Own,

Operate,

Transfer

DBFO Design,Build,Finance,Operate

DBO Design,BuildandOperate

ManagementContract


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Sponsors

EPCContractor

Returns Investment

GovernmentSpecialPurposeVehicle(SPV)

, . ..Banks,

FinancialInstitutions

ServiceCreditagreement

Debtservice

Grant/Monitor

Debt

USERS


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A PPP is not a transfer of responsibility:

A PPP project DOES NOT Mean that theGovernment has little or no onus

Its objective has to be synergy betweene pr va e pu c sec ors Areas such as land acquisition, clearances,

, .,Government

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For public sector:

av ng resources an ts est ut zat on.Reduces project costs and time, while enhancing its

overall efficiency and effectiveness.Enables access to and learning from private sector

resources, technology, and managerial skills.

Shifts risk to the private sector RISK SHARING.Pursues an integrated approach to project completion.PPP may provide greater economic benefits than other

forms of coo eration, such as ublic sector rocurement.

These extra benefits are usually referred to as value formoney (VfM).


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Advanta esOfPPPFor the private sector:

The analysis is based on the profitability of the project in terms ofo ars an cen s, an s usua y more o ec ve an a con uc e y

the public sector.

Partici ation in a iven ro ect can be anal zed usin standard financetools. These projects usually involve a great deal of risk, butgovernment backing and involvement of international financialinstitutionshelp mitigate risks.

The limits of riskreturn tradeoffs, and the ensuing risk allocation,

are even more crucial factors leading to project assessment. A greatdeal of emphasis is placed on risk management, including theormu a on o an ex s ra egy.


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ProjectSuccess

satisfied/exceeded

timeframe

Completedwithin

allocated

budgetAccepted

by

the

customer


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ProjectFailure

ScopeCreep

Gathering

Unrealisticplanning

and

schedulingLack

of

resources


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PPPPro ect

Mana ement

Process


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Key Determinants for a Successful

Adequate Demand for the services/goods

o ca comm men o e pro ec

Administrative framework and readiness to meet

Partnership of Public (Government) with Private-

Provision of information required to take informed

Technical, Environmental, Social, Financial, Legal

20 Bankability of project and project documents


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ectora

n t at ves

orts

!NationalMaritimeDevelopmentProgramtobe

!PlanforrailroadconnectivityofPortsprepared

!NewberthsthroughPPPandtransferofoldberthstoPPPinaphasedmanner

PlantoreducedwelltimeinPortstomakethemgloballycompetitive


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SectoralInitiativesRailways

!DedicatedfreightcorridorstobedevelopedpossiblywithPPP:estimatedinvestmentRs.37000cr(US$8.22billion)

!PrivatepartiestoruncontaineroperationsCONCORs

!RailwayLandDevelopmentAuthorityisbeingformedto

commerciallyuse

available

unused

land

PPP

mode

to

be

use

DevelopmentofLogisticParks/Railsidewarehousingcom lexesthrou hPPPs


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SectoralInitiativesPower

NationalElectricityPolicypowerdemandtobefullymetinnextfiveyears

(20072012)

IPPstobemajorplayers

5Ultramegapowerprojectstobesetupintheprivatesector,2

more

under

discussion:

capacity

addition

of

about

28000

MW

Policyguidelinestoencourageprivateplayersin transmission

ElectricityAct2003providesformultiplebuyersandopenaccess

TariffPolicynotifiedcompetitiveprocurementofpowerandreductionofcrosssubsidy

RajivGandhiGrameenVidyutikaranYojanalaunched90%capital

subsidyfor

rural

electricity

infrastructure


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SectoralInitiativesHighways

!Morethan45974KmNationalHighwaysarebeingdevelopedunderNHDP

!AllprojectstobeundertakenonBOTbasisexceptinexceptionalcircumstances

!Restructuring

of

NHAI

under

discussion

!NewModelConcessionAgreementshallbeusedwhichprovidesformoreoptimal


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Way Forward?

approach Getframeworks/approvals/fundsinplacebeforedoing

Capacitybuildingandreformshouldgoahead

Nowthere

is

enough

project

experience/

expertise

to

set

upa prece en as s

Adequateprojectpreparation Fundin re uiredtodoso

Nottoo

many

money

bags

waiting

to

invest

into

infrastructure

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ay orwar MOU with the Department/Agency for developing

Handholding the Projects till they reach

Building Capacities within for long term

Minimal Service Fee, Performance linked SuccessFee

Advisory and Backend support Role, Decisionmakin still with the concerned De artment

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End to End Solution


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The Challen e is to makethe behemoth move..

Project Management PPP.pdf

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