structure of presentation 1.madhya pradesh – economic indicators 2.ppp framework of madhya pradesh...
TRANSCRIPT
Public Private PartnershipsInitiatives of Madhya Pradesh Government in
Infrastructure Development
Structure of Presentation
1. Madhya Pradesh – Economic Indicators
2. PPP Framework of Madhya Pradesh Govt.
3. About Madhya Pradesh Road Development Corporation Evolution of MPRDC MPRDC project portfolio
4. Financial Models for Project Financing
5. Innovative PPP Projects Innovative PPP Projects undertaken by MPRDC Value for Money – Significance Innovative PPP projects undertaken by other departments
6. Swiss Challenge Policy
7. Venture Capital Fund
Madhya Pradesh – Economic Indicators
Madhya Pradesh – ‘The heart of India’
India – An emerging economy…
GSDP- INR 2488 billion for FY14
Second largest state in India
- 308,252 sq. Km.
Current Population – 75 million
GSDP is at constant prices, base year FY05
Road connectivity between major & distance in kilometers
Major Cities
Delhi
Chennai
Pune
Kolkata
Mumbai
Bangalore
Madhya Pradesh
Bhopal
Gwalior
JabalpurIndore
200 KM300KM
400KM500 KM
Consistently
revenue
surplus since
2004-05
Consistently strong Financial fundamentals
Expected reduction on Interest payment
burden from 22% in FY04 to 7% in FY14
18% average growth rate in Tax Revenues during
FY09-FY14
6 times the growth in Capital Expenditure during FY 04- FY 14
22% expected outstanding debt* in FY14
(limit under FRBM Act- 34%)
*(as % of GSDP)
PPP Framework of GoMP
PPP Framework of MP Government
Cabinet Committee on PPP under Chairmanship of Hon’ble Chief Minister
State Level empowered Committee on PPP under Chairmanship of Chief Secretary
PPP Cell in Directorate of Institutional Finance
VGF as well as non VGF models followed for various sectors.
DBFOT Model of PPP and MCA are adopted
Two stage bidding RFQ and RFP
MP Infrastructure Investment Fund Board
Estabished for support of unviable infra projects
VGF contributon of GoMP released through MPIIFB
About MPRDC & Its Evolution
Transition to New Regime
Background
1. MP was known for bad roads
2. Improper design based on traditional approach.
3. Budget driven construction methodology in place of demand driven.
4. Poor fund flow for projects – low budget outlay.
5. Result - Poor Connectivity, low industrial investment, sluggish business growth
New Regime
1. Government-embarked on program to revamp road sector.
2. M.P. Bridge Corporation Ltd.
3. Revived in December 2000 and
4. Given mandate to upgrade highways on PPP
5. Considering poor traffic, grant was made bidding parameter.
6. Madhya Pradesh Infrastructure Investment Fund Board (MPIIFB) created to arrange funds for grant.
7. Rs. 500 Crore outlined for the purpose.
8. Approx. 2000 km. Road length identified to be developed in phases.
About Madhya Pradesh Roads Development Corporation
Incorporated as wholly owned State Govt. Company under Companies Act 1956, in July 2004.
State Highway Authority under the State Highway Act 2004.
Mandated to develop, regulate and maintain highways with focus on PPP.
The Chief Minister of MP is the Chairman, Minister of Public Works Department & the Chief Secretary are the Vice Chairmen, the Secretaries of the PWD, Finance , Forest, Urban Affairs and Mining Dept. are members on the Board.
MD, MPRDC is also a Director.
Shift in Strategy
Takeover of entire state highway network including maintenance.
To overcome the limitations of existing PPP model new financial models introduced.
All remaining state highways were taken for development in different stages.
Important Major District Roads also taken up to complete the network under PPP.
Performance based maintenance introduced through OMT.
MOU signed with MORTH for reconstruction of National Highways.
MPRDC Project Portfolio
Road Portfolio MPRDC
CategoryTotal Length
(In Kms)
MPRDC(In Kms)
National Highways 4709 1443
State Highways 10297 10297
Major District Roads 19574 5032
TOTAL 34580 16772
Project Portfolio
MODEL NH SH MDR OTHERS TOTAL
BOT (TOLL)6744 11227 96.73
ROB/RUBs - 1330Border Check posts - 1094Singrauli Airport - 250OMT - 90
20832
BOT (TOLL+ANNUITY) - 2005 970.16 - 2975
BOT (ANNUITY)- 101.04 2321.11 Medical Colleges - 760
ARS - 12.50 3195
ADB FUNDED PROJECTS - 4707
(ADB-I,II,III)3000
(ADB-IV) - 7707
REGULAR CONTRACT/ EPC 3484 1821 - 5305
OTHERS - - 3000 (JICA ODA Loan) Building Works - 1053 4053
GRAND TOTAL 10228 19861 9388 4590 44067
In INR Crores
OUR PROJECT COST SHARE
BOT (TOLL); 20832; 47%
BOT (TOLL+ANNUITY); 2975.16; 7%
BOT (ANNUITY); 3194.65; 7%
EPC; 17065; 39%
EXTERNALLY AIDED PROJECTS
16
Loan No. Length(In km)Project Cost
(US $)Status
1959-IND MPSRDP
1602.59 190 Million Completed
2330-IND MPSRSP-II
1701.52 400 Million Completed
2736-IND MPSRP-III
1080.37 375 MillionNearing
completion
ADB-IV 1500 of MDR 500 Million Loan Activated
J.I.C.A ODA Loan
1500 of MDR 500 Million Proposed
Financial Models for PPP
Invite private investment by providing grant/ annuity to/ premium by the concessionaire on competitive bidding
PPP- Financing Models
Public Private Partnership Models
Build- Operate Transfer
BOT (Toll)
BOT (Toll + Annuity)
BOT (Annuity)
Deemed Shadow Fee Model
OMT
Engineering Procurement & Construction
PPP- Financing Models
Engineering Procurement & Construction
External Funding Agencies
(Asian Development Bank)
State Budget
Initiatives of MPRDC – BOT MODEL
Pioneer in the field of road sector development through Public Private Partnership in India
Adopted DBFOT Model of Tendering based on Model Concession Agreement of Planning Commission of GOI.
First agency in the country to get VGF from GoI.
Under VGF scheme of GOI
40 % of project cost is sanctioned to make projects viable.
20% is given by GoI.
20% is given by the State Government.
GoI has sanctioned INR 684.2 Crores as VGF for 24 BOT projects of MPRDC.
In several Projects MPRDC receives Premium.
VGF/Premium is the bidding criteria.
Distance based user fee (Toll)
B
o
T
Initiatives of MPRDC - BOT (Toll + Annuity) Model
Hybrid Model of BOT (Toll) & BOT(Annuity).
Formulated to increase Viability of the projects which are not viable on pure toll.
Toll as a sweetener.
Concession Period is kept 15 years including 2 years of construction.
Six Monthly Annuity is quoted by the bidders.
Annuity is the bidding criteria.
Annuity is the deferred payment over a period of 13 years as per payment schedule defined in Concession Agreement.
Incentive for early completion as a bonus along with first annuity.
Penalty for delay as a reduction of annuity.
B
o
T
+ Annuity
Initiatives of MPRDC - BOT (Annuity) Model
Formulated to implement the projects which are not viable on pure toll or Toll+ Annuity Models.
Concession Period is kept 15 years including of 2 years of construction.
Six Monthly Annuity is quoted by the bidders.
Annuity is the bidding criteria.
Annuity is the deferred payment over a period of 13 years as per payment schedule defined in Concession Agreement.
Incentive for early completion as a bonus along with first annuity.
Penalty for delay as a reduction of annuity.
BOT(OMT) Model
Roads build under Asian Development Bank assistance and state budget taken for maintenance and tolling under this mode
Concession Period – Project specific, normally 9-12 years
Concessionaire to undertake management, operation & maintenance of Highways
Augmentation of facility to be done
Construction, monitoring and inspection by Independent Engineer.
Tolling only on commercial vehicles.
Passenger vehicles exempt including buses.
T
O
OPERATE
MAINTAIN
M
Deemed Shadow Fee Model
Deemed shadow Toll is given in lieu of exempted vehicles.
Acts as sweetener to increase the viability of project with maximum permissible VGF of 40%.
It is given in addition to maximum VGF of 40% with maximum limit of 10%.
This will be contributed by State Government.
Proposal of deemed shadow fee model is pending with DEA GOI.
OPERATE
MAINTAIN
Innovative PPP Projects
Innovative Projects under PPP
Projects Under Implementation• Border Check Post• Accident Response System
Projects Under Development• Railway Over/Under Bridge• Medical Colleges• Singrauli Airport
Innovative PPP Projects – Border Check Post
Border Check Post
Up-gradation and integration of 24 Border Check
Posts in MP covering all State border crossings
An integrated, real time system for Transport,
Commercial Tax, Forest, Mandi & Mining departments
Purpose of the project
To increase the revenue of State Government.
To control overloading & damage to state roads.
To reduce leakage & corruption.
To use technology for reduction in transaction time
and ensuring complete transparency.
Check posts to serve as facilitation centres
WEIGHINGCONTROLLER WEIGHBRIDGE
DIMENSIONS MEASUREMENT EQUIPEMENTS
License Plate Reader Camera
Lane Computer
LaneTrafficController
Barrier &Traffic LightsControl
CENTRAL CONTROL FACILITY
ALL TRANSACTIONS,VEHICLE PICTURES
AUTOMATION SYSTEM
SURVEILLANCE CAMERA
Automatic Vehicle Classification System
RFID Reader
Operator Booth
CCF GWALIOR BUILDING
CCF Gwalior
Conference Room
Side view
Border Check-post e-Data Capture Components
3030
Automatic Vehicle Classifier
Automatic Number Plate Reader
Electronic Weigh Bridge
Automatic Boom Barrier and Traffic Light
Innovative PPP Projects – Under Development
Railway Over/Under Bridge
Development of ROB’s with more than 1 lakh T.U.V traffic in the state on PPP.
Total 34 ROB’s in two parts are being taken up costing INR 1349.74 Crores .
First Phase includes 16 ROB’s/14 LHS’s cleared by DEA with grant of 40%. Bids invited
but no Bids received.
Second phase 18 ROB’s/ 9 LHS’s is submitted to DEA.
Railway will provide 50% share upfront & Balance 50% will be met through Toll collection
plus viability gap funding by state government.
Railway will provide 50% share upfront & Balance 50% will be met through Toll collection
plus viability gap funding by state government.
Innovative PPP Projects – Under Development
BUILDING CONSTRUCTION & MAINTENANCE OF MEDICAL COLLEGES ON
BOT (ANNUITY)
Location of Project: Vidisha, Ratlam & Shahdol
• Construction period – 2 years
• Concession Period – 10 years from the date of completion
• 40% project cost to be paid during construction in 5 installments on the basis of project
milestones
• Remaining cost to be paid after completion in six monthly Annuities during 10 years
• First annuity to be paid six months after COD Interest @ bank rate plus 2% with annuity
payments during O&M period
• O&M expenses to be paid with annuity at the fix rate of 1% of project cost during first
three years, 2% during 4-6 years and 3% during remaining years.
Innovative PPP Projects – Under Development
Accident Response System
• Implementation of ARS system on PPP mode .
• Technical Assistance through ADB for capacity building in road safety.
• Accident Response System & Traffic Management Centre including operation &
maintenance for 5 years with estimated cost of Rs.12.50 Crore is being set up.
• ARS includes centralized call center, GIS based automatic vehicle tracking system
(AVTS), Computer aided dispatch system, Traffic Management Centre.
• Trial run started from 24th Dec 2014. State wide number 1099 and Citizen portal
available for assistance.
Our Strengths - MPRDC
Transparency in bidding process.
Lender’s faith in MPRDC ensuring Financial Closure of BOT Projects.
Strict Quality Control Guidelines.
Adequate Budget provision for Annuity & VGF payments by the State Government.
Onboard Panel of Experts for Superior delivery
Political commitment & support.
Land Acquisition and Environmental Clearances are planned and executed well in advance.
Chief General Manager at Head Office & Divisional Manager coordinate with District Administration.
Ensuring Quality - MPRDC
3-tier system of checking: PMC of Concessionaire >
Independent Quality Control Engineer > Officers of MPRDC
Quarry approval after thorough testing.
Field & lab testing is mandatory as per the norms of MORTH.
Use of Graders for maintaining the camber at sub grade/GSB level.
Crushed GSB
Layer -1 (drainage) Coarse graded.
Layer -2 Close graded.
WMM in place of WBM with pavers.
Use of Sensor Paver in place of mechanical paver for BT works.
Use of RMC plant in place of normal concrete mixers.
State Highway Fund
State Highway fund established under an Act for investment in highways & infrastructure projects.
Executive Committee under the Chairmanship of Chief Secretary to administer the fund.
Sources of Fund Application of Fund
All payments of Premium For Maintenance and Repair of Highways
Proceeds towards encashment of Performance Security or Bid Security
For Meeting any Development Cost of Highway or Infrastructure Project
All returns on investments made out of the Fund
For Project Preparation, Pre Tender Activities, Cost towards Utility Shifting, Land Acquisition
Value For Money – Significance in MPRDC
Value for Money: Applications at MPRDC
During VFM analysis of MDRs, 22% Annuity for BOT (Annuity) Projects was envisaged.
After bidding, the projects awarded on Annuity of 18.30% under BOT(Annuity) projects & 12.88% as on average under BOT (Toll+Annuity) projects.
Parameter EPC BOT-Annuity
NPV calculated 2838.8 2495.65
Value for Money ( NPV of EPC –NPV of Annuity)
343.16
Figure in INR
Crores
Value For Money Analysis
Parameters EPC BOT -Annuity
Construction Cost INR 3705.88 Crores(Escalation by 25%)
INR 2964.83 Crores(Including 25% of TPC for financing cost, contingency & other charges)
Construction Period 2& ½ Years 1 & ½ yrs
O & M Exp
Routine Maintenance 0.004M$/km/p.a. -
Periodic Maintenance 0.02M$//km/p.a.. -
Electricity & Patrolling 0.002M$/km/p.a. -
Project DetailsTotal Project Cost : INR 2964.83 CroresTotal Length of the Projects : 1520.03 KmAverage Annuity (actual) : 18.30% of Project Cost
Value For Money Analysis
Parameters EPC BOT -Annuity
Interest 9.00% 13%
Debt: Equity Ratio 100 70:30
Funds Requirement Immediately 6 months after COD
Discount Rate for NPV Calculation 15% 15%
Loan Repayment Period( in years) 10 10
Quality of Roads Average Excellent
Efficiency of private sector Not availed Availed
Technology Traditionally applied Latest available
Setting up of full infrastructure & staff Required Not required
Innovative PPP Projects in Other Sectors
Innovative Projects under PPP
Projects Under Implementation• Logistic Hub at Pawar Kheda• Construction of Steel Silos for Storage of
agricultural commodities• Power Transmission• Urban Transport – City Bus Service
Projects Under Development• Solid waste management• Rural Water Supply• Air Taxi
Innovative PPP Projects - Under Implementation
Setting up Composite Logistics Hub at
Pawar kheda, Madhya Pradesh
Integrating the value chain from Procurement to
Logistics under one umbrella Implementing Agency- Agricultural Marketing Board Land - 115 acres land Concession Period -33 years, extendable by 15 years PPP Mode- DBFOT Project Cost – INR 136.84 Crores Bidding parameter- Highest Upfront Premium
• Rail Terminal
• Warehousing
• Container Freight Station
• Cold Storage
• Grain & Horticulture
Procurement
• Agro & Horticulture Services
• Market Information Systems
• Trading & Collective
Marketing
• Negotiable Warehouse
Receipts
Facilities Planned
Innovative PPP Projects - Under Implementation
Considerations For Determining PIA for logistic hub Cargo originating and consumption clusters Consolidation and distribution centers Location of competing facilities Potential of attracting transshipment cargo
Key Findings Major cargo consumption centre in Madhya Pradesh are
outside 200 kms of project site except Bhopal Originating clusters within PIA include locations like
Mandideep, Budhni, Itarsi, Piparia etc. All are within 100 km from proposed Logistics Hub
All consumption centers outside 100 Km radius have presence of competing facilities
Service demand and supply gap within these facilities
Conclusions PIA area considered restricted to radius of 100 km, though for
certain commodities PIA might extent beyond considered radius
PROJECT TRANSACTION STRUCTURE
MPWLC Private Player
Develops Common Infrastructure & Basic Facilities
Engages individual Agencies
Agency 1
Agency N
Agency 2
Individual Agencies further develop,
operate & maintain various components
of project
Land Sublease
Development Agreement
Land Sublease
Development Agreement
Land Sublease & Development Agreement
of 32 years
Upfront Payment
Upfront premium or Development
Charges to private player
The Project was successfully closed with Kesar Terminals Ltd. offering approx 14 crore premium to GoMP.
Innovative PPP Projects - Under Implementation
Setting up of Steel Silo’s at ten locations
50,000 Metric Tonnes capacity of Steel Silo at each
site.
GOI to support the Project through Viability Gap
Funding (VGF) up to 20% of Total Project Cost.
Government of Madhya Pradesh to support the Project
through:oState portion of VGF up to 20% of Total Project
Cost to support O&M if required.o Providing 7 acres of land. o Guaranteed Storage Charges to be paid to the
private developer for first 10 years (in Concession Period of 30 years) at 100% utilization of the proposed project capacity.
Average cost of each Project facility is around INR
38.56 Crores
Innovative PPP Projects - Under Implementation
Power Transmission – On DBFOT
Construction of 400 KV (DCDS) Transmission Line
between Satpura and Astha
Evacuation of Power from 2 x 250 MW extension unit at
Satpura Thermal Power Station)
Grant: Rs. 60.75 Cr. (Rs. 56.54 Cr as Equity Support from
VGF and Rs 4.21 Cr as O&M Support)
Completion period: 15 months
Revenue Stream:
Monthly Fee (“Unitary Charge")
20% of actual wheeling charges (additional revenue) for
transmission for other parties, on spare capacity
availability (80% of additional revenue for Authority)
75% Revenue from Advertisement on poles
Unitary Charge for 1st year: INR. 3.15 crore / month
Innovative PPP Projects – Under Implementation
Urban Transport – City Bus Service Indore
Objective: To create a specialized and effective agency to monitor and provide intra-city public transport system
Self-financing and revenue generating model for bus stops.
Fully computerized ‘Ticket Vending system’ & Vehicle Tracking System
Concession Period: 5 years
Estimated Cost: Rs. 59.75 crore
Financing: 60% : AICTSL & 40% : Operator
Revenue Stream: Per bus monthly income:
50% : Fare
30% : Advertisement
20% : Passes
Status: Project under operation. 111 buses operational on 15 routes
Innovative PPP Projects
Regional Integrated Solid Waste Management Project on DBFOT
Implementing SWM in smaller ULBs is neither operationally nor financially viable.
Door to door collection, transportation, segregation, scientific treatment and disposal of
waste
The processing technology will be decided by the private operator.
Revenue for concessionaire for Tipping fee from ULBs and Sale of by-products or any
useful components of Waste.
Full guarantee by GoMP for tipping fee payment to Private Operator
User Fee: 60 Rs for APL and 30 Rs for BPL in Municipal corporations and Councils; Rs 40
for APL and Rs 20 for BPL in Nagar Parishads
Large ULB has been chosen as a lead member and smaller ULBs within a distance of 50-
80 kms as consortium members.
The landfill site shall be at the headquarters of the lead member
Innovative PPP Projects – Under Development
Multi Village Rural Water Supply Schemes
(MVRWSS) in Madhya Pradesh on DBFOT
Sourcing from Intake well up to house
service connection
Operation & Maintenance for 20 years
concession period.
State Govt. to state predetermined water
charges.
Capital grant of 40% to be provided to
meet viability gap.
Bidding parameter: V.G.F.
Water charges for Bulk Supply to be paid
by GoMP
Innovative PPP Projects – Under Development
Air Taxi Services
India’s first dedicated state level air
connectivity between Bhopal, Indore,
Gwalior and Jabalpur.
3-4 seats underwritten on sectors within MP
operations at pre-determined rates.
Tariff other than underwritten seats to be
fixed by operator
100% re-imbursement of VAT on ATF
uplifted in the State.
Innovative PPP Projects – Under Development
Air Taxi Policy: Salient Features
Subsidy per flying hour shall be applicable Minimum 100 flying hours flying per month to be eligible for subsidy Subsidy shall also be available in case of interstate operations (max 40%). Subsidy shall not be available if the aircraft connects two cities of another state. Minimum of 4 cities to be connected with in Madhya Pradesh VAT reimbursements shall be made on the ATF uplifted from within the state for approved flight
schedule The government shall reimburse the ambulance and fire brigade charges. Security shall be provided free of charge for airports owned and controlled by the state
government The maximum amount of subsidy per month shall not to exceed Rs.1 Cr no subsidy would be
paid in case of zero load flights (to & fro) MOU period will be of 3 years and extendable up to 2 years Atleast 2 aircraft of minimum 9 seating capacity to be operated. In case, if the operations are
started with one aircraft initially, then, the second aircraft should be inducted with in period of 2 months.
Swiss Challenge Policy
Swiss Challenge Policy
Under open and transparent process of Swiss Challenge, long-term financial solution will be provided by inviting expertise and capital from private and public sectors.
The sectors and projects not covered by existing PPP framework will also be augmented through this.
Initiative can also be taken to identify and implement projects for providing social and basic facilities.
The right of first refusal will be given to the proposer
Innovative PPP Projects Under Swiss Challenge
Rural BPO Establishing 15 Rural BPOs across M.P to create jobs in IT/ITES sector by provision of
training for skill development. Project Commitment: INR 130.62 Crores required from Investor with government to
underwrite business for 18 month
Restructuring of Industrial Water Supply in Dewas
With total mandate to deliver 23MLD, currently project is delivering 3-5 MLD Project Restructured under Swiss challenge scheme to be implemented under PPP Total Project Cost of INR 485.16 Crores and 80% of debt due of previous project. Benefits of Swiss Challenge
Concessionaire (existing or new) shall not be paid for any Debt Due and the existing Debt will be serviced by him from the same revenue stream.
In Swiss challenge mode, the maximum water charges payable shall be obtained through the open bid and the existing Concessionaire will be asked to match the bid.
Consumers continue to get water supply at the same rate as per the current Agreement
Venture Capital in Madhya Pradesh
• GoMP is creating a INR 101.14 Crores Venture Capital Fund (VCF) for MSME sector.
• The fund aims to help new and talented entrepreneurs, who cannot set up innovation-based new enterprises due to lack of adequate share capital
• GoMP will contribute INR 20.22 Crores as promoter and balance amount of INR 80.86 Crores would be raised from financial market.
• Inviting to contribute to the Fund as Investors (Limited Partners)
• Domestic investors - Insurance Companies, Banks, Corporates etc.
• Overseas Investors – VC Funds, Private Equity, Sovereign Funds, Pensions Funds, Financial Institutes, DFIs etc.
Venture Capital Fund of GoMP
Asset Management Company
(Share Capital)
Government of Madhya Pradesh
Maximum 49%
(Share Capital)
Financial Institutions, Banks, International Financial Agencies &
Corporates etc.
Minimum 51%
(Share Capital)
• GoMP shareholding will be capped at 49% in the company.
• The minimum shareholding of the Investors/Financial Institutions will be kept at 51%
• The proposed structure will lead to enriched operational and managerial flexibility.
• VC Investors may be offered Directorship in the AMC in proportion to investment
• AMC managed by Expert Venture Capitalist and Professionals from the Industry
Structure of Asset Management Company
Thank you
Vivek Aggarwal IASSecretary to Government of Madhya Pradesh,Chief Minister’s Office,Managing Director, Madhya Pradesh Road Development CorporationCommissioner, Institutional Finance, Government of Madhya PradeshOffice: +91-755 2765217; 2441062 | Fax: +91-755 2765192; 2441101 |email: [email protected] ; [email protected] Website: http://mprdc.nic.in/