PROPOSAL FOR

STATE ROAD DEVELOPMENT CORPORATION

BASED ON A STUDY CONDUCTED ON THE MADHYA PRADESH ROAD DEVELOPMENT CORPORATION

MADHYA PRADESH ROAD DEVELOPMENT CORPORATION (MPRDC)

About MPRDCMadhya Pradesh Road Development Corporation Ltd. (MPRDC) was incorporated as a wholly government owned in 2004. The MPRDC has been declared as the successor / assignee of the Madhya Pradesh Rajya Setu Nirman Nigam Limited (MPRSNN) responsible for the implementation of 15 State Highway and Major District road projects, the majority operating under the BOT Roads "public - private partnership" scheme and others being developed under the regular contract scheme.

Agenda of Incorporation• Infrastructure Development.

• Structural reforms to promote competition and active private participation.

• Balanced regional development.

• Rural development, and thereby ‘alleviating poverty’.

Strategic Goals• Provide an integrated transport system that is safe, efficient, affordable, accessible

to all and environmentally sustainable.

• To ensure the provision of minimum and affordable basic needs to the rural population.

MADHYA PRADESH ROAD DEVELOPMENT CORPORATION (MPRDC)

.

POLICY OBJECTIVES• Forge partnership with the Private Sector to continue construction maintenance

and upgrading of the State Highway & Major District Road Network, with emphasis on maintenance and upgrading.

• Protect the high level of investment in the State Highway & Major District Road Network through effective controls on vehicle overloading and ensuring adequate maintenance through road cost recovery.

• Promote efficiency and safety through application of commercial and best practice principles to ensure access to safe, reliable, affordable and cost effective service.

• Improve efficiency in the provision of transportation services and infrastructure through corporatisation, commercialization and outsourcing of maintenance and construction activities.

• Ensure access to affordable transportation services, infrastructure and supporting public amenities for the public.

Policy Achievements: Social-Economic Benefits• Reduction in vehicle operating costs.• Savings in travel time for road users.

• Improvement in safety, thus saving costs by avoiding injury and damage.

MADHYA PRADESH ROAD DEVELOPMENT CORPORATION (MPRDC)

. Our ValuesMeeting Customer Needs • Recognize the importance of our internal and external customers. • Strive to meet their identified needs.

Innovation • We are constantly looking for better ways to achieve our business outcomes. • We are open to new technology which will assist us in this objective.

Honesty/Integrity • We are honest, ethical and transparent in our business dealings with others and always

strive to be seen as such.

Efficiency • We utilize our resources wisely, constantly reviewing the way we do things removing

waste rework and duplication from our process.

Commitment • We always try to deliver what we say we are going to deliver. • Our word is our bond and once we set our direction we follow through.

Professionalism • We strive for high ethical, technical and quality standards in everything we do.

CHAIRMANCHIEF MINISTER

VICE CHAIRMANCHIEF SECY

DIRECTORPRI. SECY, FINANCE

DIRECTORPRI SECY, URBAN ADMINISTRATION

DIRECTORSECY, MINING

DIRECTORPRI SECY, PWD

DIRECTORADDN. CHIEF SECY,

FOREST

VICE CHAIRMANMINISTER, PWD

MPRDC ORGANIZATION CHART – IBOARD OF DIRECTORS

MPRDC ORGANIZATION CHART – IIMANAGEMENT

MANAGING DIRECTOR

CHIEF ENGINEER (BOT) CHIEF ENGINEER (MPSRSP) CHIEF ENGINEER (TECH)

GENERAL MANAGER (ADB)GENERAL MANAGER (NORTH) GENERAL MANAGER (TECH)

Dy. GENERAL MANAGER (TECH)

Dy. GENERAL MANAGER (ADB)

Dy. GENERAL MANAGER (PROCUREMENT)

TECHNICAL ADVISOR

Dy. GENERAL MANAGER (NHDP - IV)

Dy. GENERAL MANAGER (HIGHWAY)

Dy. GENERAL MANAGER (HR)

Dy. GENERAL MANAGER (MIS)

Dy. GENERAL MANAGER (FINANCE)

SENIOR MANAGER (ENV.)

DIVISIONAL MANAGERS (8)

MANAGER (MIS)CHARTERED ACCOUNTANT COMPANY SECRETARY

LIAISON OFFICER SURVEY ENGINEER

MPRDC ORGANIZATION CHART – IIIPROCUREMENT

MANAGING DIRECTOR

CHIEF ENGINEER (BOT)

GENERAL MANAGER

Dy. GENERAL MANAGER (PROCUREMENT)

TECHNICAL ADVISOR

Dy. GENERAL MANAGER (FINANCE)

CHARTERED ACCOUNTANT COMPANY SECRETARY

PROCUREMENT POLICY UNIT

PROCUREMENT IMPLEMENTATION AND EVALUATION UNIT

MPRDC ORGANIZATION CHART – IIPROJECT IMPLEMENTATION UNIT (PIU)

MANAGING DIRECTOR

CHIEF ENGINEER (BOT) CHIEF ENGINEER (EPC)

GENERAL MANAGER (BOT) GENERAL MANAGER (EPC)

Dy. GENERAL MANAGER (TECH)

TECHNICAL ADVISOR

Dy. GENERAL MANAGER (BOT)

SENIOR MANAGER (ENV.)

DIVISIONAL MANAGER

INDEPENDENT ENGINEER

FIELD UNIT

HEADQUARTER UNIT

OUTSOURCED UNIT

STEPS FOR PPP PROCUREMENTSTEP 1IDENTIFICATION OF ROADS FOR DEVELOPMENT

STEP 2FEASIBILITY STUDY BY APPOINTING DESIGN CONSULTANTS

STEP 3PREPARATION OF RFQ AND ADVERTISEMENTS BASED ON PLANNING COMMISSION DOCUMENTS(DOCUMENTS CAN BE MODIFIED PROVIDED NO FUNDING IS REQUIRED FROM THE MINISTRY OF FINANCE)

STEP 4PREQUALIFICATION BIDS ARE ACCEPTED AND PREQUALIFICATION IS COMPLETED IN APPROX. 45 DAYS

STEP 5PREQUALIFIED BIDDERS SUBMIT THE RFP (FINANCIAL PROPOSAL) AND PROJECT IS AWARDED

STEP 6APPOINTMENT OF INDEPENDENT ENGINEER FOR SUPERVISION

DESIGN BUILD FINANCE OPERATE AND TRANSER PROJECTS(DBFOT)

TOLL

ANNUITY

ANNUITY + TOLL*

BASED ON TRAFFIC STUDY CONDUCTED BY THE CONSULTANT AS A PART OF THE FEASIBILITY REPORT THE PROJECTS ARE INVITED EITHER ON TOLL BASIS OR IN OTHER FORMATS.

WHEN TRAFFIC IS INSUFFICIENT THE BIDDER MAY ASK FOR VIABILITY GAP FUNDING, OR WHEN THE TRAFFIC IS SUFFICIENT THE BIDDER MAY OFFER A PREMIUM TO THE AGENCY.

IT IS SAME AS THE ANNUITY MODEL, WITH AN ADDITIONAL INCENTIVE OF TOLL COLLECTION FOR THE CONCESSIONAIRES ONCE THE COMMERCIAL OPERATIONS COMMENCE.

IF THE TRAFFIC VOLUME IS LOW THE BIDS ARE OFFERED ON ANNUITY BASIS, I.E., THE GOVERNMENT PAYS BACK THE INVESTMENT OF THE CONCESSIONAIRE, AFTER THE CONSTRUCTION OF THE PRODUCT IS COMPLETE, IN HALF-YEARLY INSTALMENTS OVER THE CONCESSION PERIOD.

BIDDERS QUOTE FOR SEMI-ANNUITY (HALF-YEARLY INSTALMENTS) TO BE PAID BY THE GOVERNMENT.

*MPRDC is the first organization to introduce the concept of Annuity+Toll projects to make PPP development model viable for private participation, especially on Major District Roads.

MINISTRY OF FINANCE OFFERS A GRANT OF 20% OF THE TOTAL PORJECT COST IN THE FORM OF VAIBILITY GAP FUNDING (VGF) TO THE CONCESSIONAIRE. THE FOLLOWING STEPS ARE TO BE ADHERED TO BY THE STATE GOVERNMENTS FOR SEEKING CENTRAL GOVERNMENT FUNDING ON PPP PROJECTS* WHICH FALL WITHIN 40% VGF CATEGORY -

1. PREPARATION OF FEASIBILITY REPORT.

2. SUBMISSION OF PROPOSAL IN PRESCRIBED FORMAT OF DEA (DEPARTMENT OF

ECONOMIC AFFAIRS) .

3. PRESENTATION OF THE PROPOSAL TO DEA.

4. 20% VGF IS APPROVED BY DEA/EMPOWERED INSTITUTION (EI).

5. BIDS ARE INVITED AND RECEVIED BY THE STATE CORPORATION.

6. BASED ON THE ASSESSMENT OF THE LOWEST BID FORMAL APPROVAL OF EI IS TAKEN.

7. TRIPARTRITE AGREEMENT IS SIGNED BETWEEN CONCESSIONAIRE, STATE CORPORATION,

AND THE GOVERNMENT OF INDIA.

8. PROCUREMENT OF INDEPENDENT ENGINEER IS COMPLETED.

*THE PROPOSED FACILITY/PROJECT SHOULD BE NON-COMPETING WITH THE EXISTING FACILITY OF CENTRAL GOVERNMENT OR ANY OTHER AGENCY.

FUNDING FROM THE CENTRAL GOVERNMENT THROUGH MINISTRY OF FINANCE

PPP Projects awarded by the MoRTH through State Agencies

Summary of PPP Projects awarded during 2011-12 through state agencies

Grant/ Premium

Madhya Pradesh Rajasthan Punjab Total

No. Length (Km)

TPC (Cr Rs.) No. Length

(Km)TPC

(Cr Rs.) No. Length (Km)

TPC (Cr Rs.) No. Length

(Km)TPC

(Cr Rs.)

Premium 2 195 1375 2 289 1012 1 51 422 5 535 2809

Grant less than 10% 2 146 578 1 78 224 1 166 1586 4 390 2389

Grant 10-20% 1 52 382 1 148 377 - - - 2 200 759

Grant 35-40% 1 103 871 1 238 851 - - - 2 340 1722

Total 6 495 3206 5 753 2464 2 217 2008 13 1466 7679

MPRDC BOT – Toll Projects AnalysisSummary of PPP Projects awarded by MPRDC

BOT - TOLL

Grant/ PremiumCOMPLETED ONGOING TOTAL

No. Length (Km)

TPC (Cr Rs.) No. Length

(Km)TPC (Cr Rs.) No. Length

(Km)TPC (Cr Rs.)

Premium 5 375 1978 3 135 546 8 510 2524

Grant < 10% - - - 7 521 1028 7 521 1028

Grant 10-20% 4 396 1040 0 0 0 4 396 1040

Grant 20-40% 3 388 273 5 411 761 8 799 1034

Grant 40-65% 8 1152 545 0 0 0 8 1152 545

Total 20 2311 3835 15 1067 2335 35 3378 6170

MPRDC BOT – Toll Projects Summary

Summary of PPP Projects awarded by MPRDC

Grant

BOT – TOLL ANALYSIS

No. Length (Km) TPC (Cr Rs.)AVERAGE GRANT /

PREMIUM %

TOTAL (NET) GRANT /

PREMIUM

% OF GRANT / PREMIUM TO

TPC

Premium 8 510 2524 (4%) (101) 4%

Grant < 10% 7 521 1028 0% 0 0%

Grant 10-20% 4 396 1040 4% 42 4%

Grant 20-40% 8 799 1034 18% 186 18%

Grant 40-65% 8 1152 545 6% 33 6%

TOTAL 35 3378 6170 24% 159 3%

MPRDC BOT – Annuity + Toll Projects Summary

Summary of PPP Projects awarded by MPRDC

Grant

BOT – ANNUITY + TOLL ONGOING PROJECTS

No. Length (Km) TPC (Cr Rs.) AVERAGE GRANT %

GRANT VALUE / SEMI-ANNUITY

(Cr Rs.)

TOTAL GRANT OVER

CONCESSION OF 13 YEARS

Grant < 10% 13 502 938 5% 47 1222

Grant 10-20% - - - - - -

Grant 20-40% - - - - - -

Total 13 502 938 5% 47 1222

EFFECTIVELY MPRDC IS ABLE TO ACHIEVE THE FOLLOWING IN A SHORT SPAN OF 8 YEARS –

1. BOT – TOLL BASIS PROJECTSa. TOTAL LENGTH : 3378 Km b. TOTAL PROJECT COST : Rs. 6170 CRORE c. TOTAL (NET) GRANT : Rs. 159 CROREd. % of GRANT to TPC : 3%

2. BOT – ANNUITY + TOLL BASIS PROJECTS a. TOTAL LENGTH : 502 Km b. TOTAL PROJECT COST : Rs. 938 CRORE c. TOTAL SEMI-ANNUITY : Rs. 47 CROREd. % of SEMI-ANNUITY to TPC : 5%

SUMMARY OF THE PPP ROAD PROJECT ACHIEVEMENTS OF MPRDC FROM 2004 TILL DATE

THANK YOU

____________________________

PROPOSAL FOR A STATE ROAD DEVELOPMENT CORPORATION