Documente Academic
Documente Profesional
Documente Cultură
Presented by
Brij Nandan Yadava VP Projects DLF
B. N. Yadava
To become WORLD-CLASS
to improve MASS Standard Of Living to remove disparity, the gap between rich and poor to achieve BALANCED GROWTH to generate employment to create multiple economic activities
B. N. Yadava
What do we need ?
PUBLIC MONEY
$ 500 billion (for Infrastructure only in XI th plan) XIIth plan envisage $ 1 Trillion = Countrys 1 yr GDP
PLENTY
VISION Money
PRIVATE MONEY
Enough we got 1/3rd of cost of infrastructure
Manpower
Time
No Time to Loose
B. N. Yadava
Target Status
What is PPP !!
THINKING
Stage-1
Stage-2
BUILDING
Stage-3
RUNNING
DEPARTING
Stage-4
Private Body Exits Build Infrastructure Run Infrastructure Public Body Continues
(Private may coexist in few cases)
Private Body
B. N. Yadava
Concessions
BOT
BOO
(25-30 yrs)
(Varies)
(Varies)
Institutional Arrangements
Private Intense
B. N. Yadava
Legislation in place Presence of Regulator / Governance Structure Strong Institutional Framework Project Implementation Units supported with competent PM Transparency and . Practice of Cost-Plus contracts in place of conventional contracts Clarity of risks and mitigation plans Good Inter-ministerial / departmental coordination
B. N. Yadava
Concept of General Contractor (management contractor) and seamless connections between Government, Contractors, Vendors, dispute resolution board Government focuses of Governance rather than project execution Realistic targets, Realistic costs and good Risk Management Realistic Estimation of potential demand for services being planned for Certified professionals (for reporting, evaluation, estimation and design)
.
B. N. Yadava
In India private companies are rolling out wireless telephone network infrastructure nearly 8% cheaper than the subsidy benchmark by Government Mildura hospital contract in Australia reduced the capital cost by 20% and treatment cost lower than those in Government hospitals In Sweden (Stockhome) private operator has cut costs by 30% and treated more number of patients within the same government infrastructure. In Malaysia the non-revenue-water (losses) were reduced by leakage control & replacement of mains under service contract. Gaining 20% more delivery of treated water.
B. N. Yadava
agencies approch,statutary problems, influence of developed world, absence of policy and regulation, Inflation, Liquidity Issues, Corruption red-tapism, Frequent Change in Scope,
Organization, Monopoly, Outdated Tools & Methodology, Poor Governance Structure, Overlap of Scope, Lack of Supporting Structure, Project Finance, Multilateral
Deficient Contracts, Law & Order,
Exchange Rates, Statutory Problems, Fragile Governments, One Sided Contracts, SOP, Transparency, Cast, Creed, Institutional Failure, Supply of Equipments, Global Standards, Poor planning Individual Expertise, Geological issues, Geotechnical issues,
Hydrological,
In-efficient PMO, Cartel, Media, Recession, Unrealistic Deadlines, War, Bye-laws,, Poor Communication, Strategy, Insufficient Experience, Poor Risk
Terrorism, Border threats, Speculations, Safety, Security,
B. N. Yadava
Deliver y
I
NEED
DELIVERY Usually ill-managed, projects are not closed, closed with loose ends, no way forward for O&M
B. N. Yadava
nt me ge na Ma
.
on uti ec Ex
no it a rts i
n i m dA
Contract Administration
Procurement Management
B. N. Yadava
Source of Fund
Project Delivered
Designers
Quantity Surveyors
Specialist Consultants
B. N. Yadava
Merchant Bank
Contractors
IDEA
Project Delivered
Designers
Specialist Consultants
B. N. Yadava
Soft Skills
ng di an t st ec e r oj n t nd pr me U n ro vi
en
kn
B. N. Yadava
Construction Management
Financing
Bid Management
Statutory
Design Management
B. N. Yadava
1.
2.
3.
4.
5.
6.
7.
1.
2.
Internal Resources External Borrowing Venture capitalists PE Funds / Institutional FDI Equity Credit Bonds Subsidies Multilateral finanace.
3.
4.
5.
6.
7.
1.
2.
3.
4.
5.
6.
7.
B. N. Yadava
1.
2.
3.
4.
5.
6.
7.
1.
2.
3.
4.
5.
6.
7.
1.
2.
3.
4.
5.
6.
Project Implementation Plan Integration Management Scope Management. Quality Management Time Management Cost Management Contract / Procurement Management. Risk Management. Safety Management. Management Human resourse Management
7.
1.
As-Built Drawings Operation & Maintenance Hand-over, Manuals Contract Closure Achieving Hand-over to Stakeholders
2.
3.
4.
5.
6.
7.
Knowledge Area
Quality Management
Proof Checking
Risk Management
B. N. Yadava
Global Technical Advisor An area over 5000 acres 6 Terminal / Cargo Complex Airside / Landside Pavements / Runways
Aviation
B. N. Yadava
Global Technical Advisor An area over 3000 acres 5 Terminal / Cargo Complex Airside / Landside Pavements / Runways
Aviation
B. N. Yadava
Urban Planning
Project Features
Objective is to create economically productive, efficient, equitable and responsive city As per JNNRUM guidelines
Client
Ranchi Municipal Corporation
B. N. Yadava
Mumbai METRO
Services Provided
Feasibility
MRTS
Client
MMRDA
B. N. Yadava
B. N. Yadava
Example of Implementation - 1
In Malaysia the non-revenue-water (losses) were reduced by leakage control & replacement of mains under service contract. Gaining 20% more delivery of treated water.
B. N. Yadava
In Malaysia the non-revenue-r (losses) were reduced by saving power and equipment cost mains under service contract. Gaining 30% more delivery of treated sewage.
B. N. Yadava
B. N. Yadava
B. N. Yadava
B. N. Yadava
B. N. Yadava
B. N. Yadava
Environmental Factors
Contractor Sub-contractor Vendor
More details
PPP Structure and Model Management Contracts Management Contracts Variants Operational Management Turnkey BOT
Private Ownership of Assets B BOT BOOT BOO BOOST BLT Other Financing Models
Affermage / Lease
Concession BOOT
B. N. Yadava
Way forward
This will
attract investments from Private Sector. help achieve our goal of sustainable economic growth.
B. N. Yadava
PPP models vary short term simple Management contract to long term and a very complex contract Short term could be with investment or without investment. Long term could be BOT form to divestiture. Models vary mainly due to- ownership of capital, investment responsibility, assumption of risk and duration of contact. PPP Models classification are
1. 2. 3. 4. 5. Management contracts Turnkey projects lease Concessions Private ownership of assets.
B. N. Yadava
Management Contracts
It is an arrangement for management of apart or complete of public enterprise by private sector. It allows private sector skill to be used into service design and delivery, operational control, labor management and equipment procurement. Private sector take services risk not commercial risk. Service provider is paid fee to manage and operate services. Payment is performance based. Contract duration is 2to 5 yr for small and longer period used for complex facilities for port and airport. Management contact varies from supply, service, maintenance and operational management contacts
B. N. Yadava
Supply or service contacts-equipment ,raw material energy, power. Non core activities-catering, cleaning, medical, luggage handling, security and transport services. Some form of licensing or operating agreement is used if private sector is to render directly to user of infrastructure facility e.g. catering services for passenger on railways. The main purpose of licensing is to ensure desired level of quantity and quality of services rendered. Maintenance Management- This is very popular with transport operator Equipment vendors and suppliers can also be used for the maintenance of assets procured from them. .
B. N. Yadava
Operational management
It is useful when local manpower or expertise in running the facility is limited (port or airport) when inaugurating a new operation. This also common in the transport sector for rendering non transport elements e.g. - ticketing, reservation, system. Operational management of urban transport services is also contracted to the private sector. For simplest type of contact operators are paid a fixed fee for performing managerial task. For more complex contacts may offer greater incentives for efficiency improvement by defining performance target and the fee is based in part on their fulfillment.
B. N. Yadava
Turnkey - BOT
It is a traditional public sector procurement model for infrastructure facility. Service provider( contractor) is selected through bidding process. The service provider( private contractors) design and builds a facility for fixed fee, rate or total cost, which is one of the key criteria in selecting bid The contractor take risk in design and build. The scale of investment by private sector is generally low for short term. This type of arrangement do not have strong incentive for early completion of a project This type of private sector participation is known as design and build.
B. N. Yadava
Affermage / lease - 1
Lease holder is responsible for operating and maintaining the infrastructure facilities and services. Operator is not required to make any large investment This model is applied in combination with other models such as BROT. In this case contact period is longer and private sector is required to make significant arrangement. Afterimage and lease are very similar. The difference between them is technical. Under lease ,operator retain revenue from customer and makes a specified lease fee payment to contracting authority. Under Affermage the operator and contracting authority share revenue from user. In both cases operator takes lease of infrastructure and equipment from the govt for an agreed period.
B. N. Yadava
Affermage / lease- 2
Government maintain the responsibility for investment. As part of lease some assets may be transferred on permanent basis for a period which extends over the economic life of of assets. Fixed facilities and land are leased for a longer period than the mobile assets. Land to be developed by the developer is usually transferred for a period of 15-30 yr. Asset transferred to private sector under lease agreement are constrained in their use to specific function or service, the value of assets is dependent upon the revenue potential. If the asset are transferred to the private sector without restriction of use, the asset value is associated with the optimum use of the assets and the revenues that they can negate.
B. N. Yadava
Concessions - BOOT
In this case govt. defines and grants specific rights to an entity usually a private company to build and operate for a fixed time. The govt retain the ultimate ownership of the facility or right to supply the services. Payment can take both way ,concessionaire pays to govt for concession rights and govt may also pay the concessionaire, which it provides under the agreement to meet certain specific conditions, such payments by govt may be necessary to make projects commercially viable and reduces the level of commercial risk taken by private sector. Typical concession period 5-50yr In concession model of PPP an SPV may not always necessary. concession may be two type franchise and BOT type. Under franchise the concessionaire provide services that are fully specified by franchise authority. Private sector take commercial risk.e.g urban bus and rail services Others areBOT,BROT,BLT
B. N. Yadava
In this form of participation, the private sector remain responsible for design, construction and operation of infrastructure facility and in some cases public sector may relinquish the right of ownership of assets to the private sector. BOO,DBFO-The private sector build design and operate and sell the product/ services to its user or beneficiaries- power sector Private finance initiative-Private sector similar to BOO model. However, the public sector( unlike user in a BOO) purchases the services from private sector through along term agreement. PFI projects bear direct financial obligations to govt in any event. Asset ownership may or may not transferred to public sector. Divestiture . Private sector buys an equity stake in the public company. However private stake may or may not imply private management of the enterprise. True privatization can happen through transfer of deed , direct sale or private floatation of shares . Full divestiture of existing infrastructure is not very common. However there is many example of partial divestiture.
B. N. Yadava
Contractual arrangement whereby the concessionaire undertake the construction, including financing, of a given infrastructure facility and operation and maintenance thereof Concessionaire operate the facility over a fixed term during which it is allowed to charge facility users appropriate toll, fee rental .
charges not exceeding these proposed in its bid or negotiated and incorporated in the contract to enable the concessionaire to recover its investment, and maintenance expenses in the project. The concessionaire transfers the facility to government or local govt unit concerned at the end of a fixed term.
B. N. Yadava
Project is based on granting of concession by a principal union ,government or local authority) to the concessionaire. Concessionaire is responsible for construction, financing and O&M of a facility over period of the concession before finally transferring the facility, at no cost to the principal, a fully operational facility.
During the concession period the promoter owns and operates the facility and collects revenue in order to repay the financing and investment costs. Maintain and operate the facility and make a margin of profit.
B. N. Yadava
BOO-Concessionaire is authorized to finance, construct, own operate & maintain an infrastructure or development facility from which the proponent is allowed to recover its total investment, O&M costs plus a reasonable return thereon by collecting tolls, fees, rentals or other charges from facility users.
BOST- Build operate share and transfer-Concessionaire is authorized to finance, construct and maintain, share apart of the revenue and transfer the infrastructure facility at the end of the period. Proponent is allowed to recover its total investment ,O&M cost plus a reasonable return thereon by collecting tolls, fees rentals and other charges from facility user .
B. N. Yadava
BOOST
BOOST- Build own operate share transfer-Concessionaire is authorized to finance, construct, own, O&M,share apart of revenue and transfer the infrastructure facility at the end of the period. The proponent is allowed to recover its total investment,O&M cost plus a reasonable return there on by collecting tolls , fees , rentals or other charges from facility users.
BT- Built and transfer- Concessionaire undertake the financing and construction and after its completion turns it to Govt, which shall pay the proponent on agreed schedule its total investments expended on the project plus reasonable rate of return thereon. This arrangement may be employed in the construction of any infrastructure or development project, including critical facilities which, for security or strategic reasons , must be operated directly by the Government. .
B. N. Yadava
BLT- Concessionaire is authorized to finance and construct an infrastructure or development facility and upon completion turns it over to the govt agency on lease arrangement for affixed period after which ownership of the facility automatically transferred to the govt.
B. N. Yadava
BTO- Build transfer and operate BROT- Build rehabilitate operate and transfer- water supply projects . BLT- Build lease and transfer . DB- Design and build. DBB- Design bid and build- traditional public sector contract. DBOT- design build operate and transfer. DBFO- design build finance and operate.-boot concession DBOM-Design build operate & maintain-reward th rental ROT- Rehabilitate operate and transfer. DBO- Design build and operate. BB0- Bid build and operate. BOOM- Build own operate and maintain.
B. N. Yadava