PPP Opportunities in Transport

Transcription

1 PPP Opportunities in Transport Dibyendu Sengupta 8 th March 2013, New Delhi Promoting European clean technologies in India & tackling climate change 1

2 Webinar series 2013: PPP Opportunities in Transport Speakers Mr. Dibyendu Sengupta Transport Sector Specialist, EBTC Dibyendu has 13 years of experience across various segments of the transport domain including traffic and transport studies, long-range planning, ITS, corridor improvement studies, intersection design and road safety. In his previous positions, he has worked as an engineering and planning consultant. Mr. Anil Gandhi President, Government Advisory & PPP Division, Feedback Infra Anil has worked extensively in different infrastructure sectors and has wide experience in projects to be developed on PPP basis providing a complete range of services from feasibility studies to bid process management to fund raising and execution of the projects. These projects include integrated development of road network in Punjab, commercialization of bus terminals, multi-level car parks, redevelopment of markets etc. Prior to Feedback, Anil worked with Larsen & Toubro and Reliance Industries Limited. Promoting European clean technologies in India & tackling climate change 2

3 Agenda 1. EBTC Introduction 2. Introduction to PPP 3. Indian Scenario 4. Transport Sub-sector PPP frameworks 5. PPP Investments 6. Key policies 7. Sub-sector opportunities 8. EBTC Services Promoting European clean technologies in India & tackling climate change 3

4 EBTC Status and Setup Mission and Vision EBTC s Mission Establish cooperation in Business and R&D for clean and green technologies EBTC s Vision The competent reference point for bringing European clean technologies to India Enhancing existing networks, initiatives, partners, and institutions - both in Europe and India - in order to create a real European added value. Developing a powerful, pragmatic platform Promoting European clean technologies in India & tackling climate change 4

5 EBTC Status and Setup Key Facts 4 locations across India New Delhi (HQ), Mumbai, Bengaluru and Kolkata 4 Specialists with teams covering focus Sectors Biotech, Energy, Environment and Transport 4 steps from Visibility to Incubation Promoting Europe in India and India in Europe Providing Information and Intelligence Supporting the market entry process from scratch Providing full service incubation support for businesses and R&D High growth market, dynamic sectors Promoting European clean technologies in India & tackling climate change 5

6 Introduction What is PPP? a legally-binding contract between government & business for provision of assets and the delivery of services that allocates responsibilities and business risks among the various partners. Why PPP? Traditional funding sources are not keeping pace with infrastructure investment needs and the growing public demand for services Promoting European clean technologies in India & tackling climate change 6

7 Introduction Benefits Expedited project completion Project cost savings Improved quality Use of private resources Access to new sources of private capital Facilitates utilisation of private sector expertise and HR Promoting European clean technologies in India & tackling climate change 7

8 Introduction What is NOT a PPP? not a simple outsourcing of functions where substantial financial, technical and operational risk is retained by the institution not a donation by a private party for a public good not the privatisation or divestiture of state assets and/or liabilities not the commercialisation of a public function by the creation of a state-owned enterprise does not constitute borrowing by the state (Source: PPP Handbook, Uttarakhand) Promoting European clean technologies in India & tackling climate change 8

9 Introduction Types of PPP Design, structure & implementation in various ways: Service & management contracts Leasing Concessions like Build-Operate-Transfer and its variations such as Build-Owned-Operate-Transfer etc. Joint Venture Contractual Structures Cost-Plus Gross-Cost Net-Cost Licensing Promoting European clean technologies in India & tackling climate change 9

10 Introduction Typical Uses & Relevance Contracting with a private company to: Renovate Construct Operate Maintain And/or Manage A facility or system Relevance Transport projects infrastructure heavy Traditional means of funding transport infrastructure taxes, fees, and bonded debt insufficient and subject to political instability (Source: HDR) Promoting European clean technologies in India & tackling climate change 10

11 Introduction Process of PPP projects Phase 1: PPP Identification strategic planning, project pre-feasibility analysis Value for Money analysis, PPP suitability checks, and internal clearances Phase 2: Project preparation project structuring, timeline Technical feasibility, financial viability analysis,, contractual documents, Phase 3: Procurement Procurement notice, tender invitation & evaluation Project award & financial agreements Phase 4: Contract management and monitoring Allocate management responsibilities, monitor project outputs, dispute resolution Reviewing, evaluation report Promoting European clean technologies in India & tackling climate change 11

12 PPP Scenario Indian Transport National PPP Policy Legislation responsibility divided Centre States Ministry of External Affairs (in draft now) Centre (Union), States and Urban Local Bodies (ULBs) ports, airports, railways, national highways, inland water transport Includes State highways and City roads Some states have developed legal framework for PPPs ULBs urban roads and bridges (Source: Planning Commission) Promoting European clean technologies in India & tackling climate change 12

13 PPP Scenario Indian Transport (cont d) India tops in PPP investments in transport Also tops in number of projects Promoting European clean technologies in India & tackling climate change 13

14 Framework Roads Apex bodies Ministry of Road Transport & Highways (MoRTH) National Highways Authority of India (NHAI) Apex Government body implementing the NHDP Policy measures 100% FDI for all road development projects NHAI / GoI can provide a VGF grant of up to 40% Under Section 80 IA, investors are offered a 100% rebate on income tax for 10 consecutive years, out of the first 20 years of a project and many more Projects Design/construction of news roads/ widening projects Tolling (Source: Ministry of Finance) Promoting European clean technologies in India & tackling climate change 14

15 Framework Ports Apex bodies Ministry of Shipping Port Trust Authorities Major ports under Central purview; minor ports under States Policy measures GoI introduction of corporatisation of ports 100 % FDIs for construction & maintenance of ports 100% income tax exemption is available for a period of 10 years Standardisation of process model RFP/RFQ for uniformity/transparency Projects Operations and management of ports Construction of container terminals, LNG terminals, jetties Construction of deep water ports, shipping yards, dry docks, bulk ports and ship repair facilities (Source: Deloitte & PPP India database) Promoting European clean technologies in India & tackling climate change 15

16 Framework Railways Apex bodies Ministry of Railways Railway Board reports to Ministry Policy measures Infrastructure development outside Indian Railways not possible; hence, limited PPP activities Examples Container Corporation of India Limited (CONCOR) to multimodal logistics infrastructure India Railways Catering and Tourism Corporation Limited (IRCTC) Pipavav Railway Corporation Ltd. - SPV to provide B.G. rail link to Port of Pipavav in the State of Gujarat. (Source: Ministry of Finance) Promoting European clean technologies in India & tackling climate change 16

17 Framework Airports Apex bodies Civil Aviation Ministry Airports Authority of India (AAI) operates 97 airports Policy measures 100% FDI is permissible for existing airports; FIPB approval required for FDI beyond 74% 100% FDI under automatic route is permissible for greenfield airports 49% FDI is permissible in domestic airlines under the automatic route, but not by foreign airline companies 100% tax exemption for airport projects for a period of 10 years Projects Airport modernisation including ATC, terminal facilities (Source: Ministry of External Affairs & Finance) Promoting European clean technologies in India & tackling climate change 17

18 Framework Urban Transport Apex bodies Ministry of Urban Development (MoUD) State Road Transport Undertakings Policy measures National Urban Transport Policy (NUTP) UMTAs being instituted - apex decision making body on all public transport matters Central assistance through funding schemes like JNNURM via Ministry of Urban Development (MoUD) Projects Intra-city bus operations; construction of bus terminals Metro rail systems Parking facilities Capacity building (driver training institutes etc) High potential sector for SMEs (Source: Ministry of Finance) Promoting European clean technologies in India & tackling climate change 18

19 India s Transport Sector Present Scenario According to a 2010 McKinsey report Transport and Affordable Housing 2 most capital intensive sectors in India By 2030, 7,400 kilometres of metros and subways need to be constructed 20 times the capacity added in the past decade Share of public transport in an average Indian city 30%; well short of the minimum basic of 50% (Source: McKinsey Global Institute) Current Scenario could lead to urban gridlock Promoting European clean technologies in India & tackling climate change 19

20 Planned Investments in Transport Planning Commission Planned Investments for 12 th Five Year Plan ( ) Major investment in public transport In Public Transport Major components Metro, BRTS ITS 1.3 Billion allocated Capacity Building 770 Million allocated * Misc includes Bicycle Schemes, Capacity Bldg, Innovation, Pilot Projects (Source: Working Group on Urban Transport, 12 th Five Year Plan, Planning Commission) Public Transport has major chunk of planned investments Promoting European clean technologies in India & tackling climate change 20

21 PPP investments in Transport Gujarat, Karnataka, Madhya Pradesh, Maharashtra & West Bengal leading States In pipeline 454 Road projects 61 Ports projects 8 Railway projects 6 Airport projects (Source: PPP India Database & PPIAF) Promoting European clean technologies in India & tackling climate change 21

22 PPP Initiatives in India ADB-GoI Initiative Department of Economic Affairs (DEA) PPP Cells (Assam, A.P., Haryana, M.P., Orissa, Rajasthan, Uttarakhand) awareness building and training workshops, development of state-level PPP websites and management information systems (MIS), preparation of PPP draft policies and guidelines/toolkits for states India Infrastructure Finance Company Limited (IIFCL) IIFCL is allowed to refinance infrastructure loans by banks and FIs as well as lend directly, subject to a limit of 20 percent of the project cost PPPs have overriding priority under IIFCL funding schemes. Provision of Viability Gap Funding (VGF) to provide capital grants for BOT projects on national highway The objective is to make even commercially unviable projects attractive for private investment by reducing their capital costs (Source: Planning Commission) Promoting European clean technologies in India & tackling climate change 22

23 PPP Initiatives in India (cont d) India Infrastructure Project Development Fund (IIPDF) meant to help meet project development costs of public sponsoring agencies of infrastructure projects, both at central as well as state levels. It can assist to meet up to 75% of the project development costs The costs are recovered from the successful bidder Public Private Partnership Appraisal Committee (PPPAC) set up with an objective to reduce transaction costs, enhance coordination among ministries involved and ensure fast track approval of PPP projects (Source: Anant & Singh) Promoting European clean technologies in India & tackling climate change 23

24 Foreign Participation in Transport PPPs As of 2011, Foreign participation in PPP projects 7% of total number of projects 1% of total cost of projects Good participation in Highways/Roads projects (NHDP) bidding rules have encouraged Indian firms to opt for joint venture with foreign firm RFQ/RFP stages give weight to prior experience, financial soundness of bidders two winning points for foreign firms Deutsche Bank, Isolux Corsan Group (Spain), Widmann AG (Germany) (Source: Ministry of Finance; Anant & Singh) Promoting European clean technologies in India & tackling climate change 24

25 PPP Opportunities Roads Urban Roads JNNURM (J. Nehru National Urban Renewal Mission) UIDSSMT (Urban Infrastructure Development Scheme for Small and Medium Towns) PFDF (Pooled Financed Development Fund) Rural Roads PMGSY (Pradhan Mantri Gram Sadak Yojna) PURA (Provision of Urban Amenities to Rural Areas) Promoting European clean technologies in India & tackling climate change 25

26 Opportunities Urban Transport Atal Indore City Transport Services Limited upcoming tenders RFP: Supply & Maintenance of Electronic Ticketing Machines for City Buses RFP: Bus Operate and Maintain, Own on Transfer Basis High Speed Rail Along Outer Ring Road, Hyderabad International Competitive bidding INCAP (nodal agency) will initiate tenders from Internationally reputed Consultants to asses the feasibility and cost of the Project. Mumbai Metro Promoting European clean technologies in India & tackling climate change 26

27 PPP Opportunities Ports Cargo handling is projected to grow at 7.7% until Approx. 60% of container traffic handled by Mumbai Port and JNPT in Navi Mumbai 20 projects in PPP mode presented by Ministry of Shipping to Rajya Sabha in August 2011 Major ports International port operators have been invited to submit competitive bid for BOT terminals on a revenue share basis SPVs Nhava Sheva International Container Terminal Pvt Ltd Kakinada Sea Ports Limited Gangavaram Port Tender awaited for Sea Port at Tatadi (Source: Investment Commission & Deloitte) Significant foreign involvement in the port sector Promoting European clean technologies in India & tackling climate change 27

28 PPP Opportunities Railways Development of world class railway stations 22 stations have been identified at the first stage Commercial Utilization of surplus land 43,000 hectares vacant land Rail Land Development Authority (RLDA) set up JVs for locomotive manufacturing Diesel Loco Factory, Marowhra, Bihar Electric Loco Factory, Madhepura, Bihar Coach Factory, Rae-Bareli, Uttar Pradesh (Source: Ministry of Finance) Promoting European clean technologies in India & tackling climate change 28

29 PPP Opportunities Railways (contd) Dedicated Freight Corridor 2700 route kms approximate cost of Rs.28,000 crores ( 4 billion) Mix of EPC and PPP methodology Multimodal Logistics Parks Wagon Investment Scheme (Source: Ministry of Finance) Promoting European clean technologies in India & tackling climate change 29

30 PPP Opportunities Airports Opportunities/ Potential Greenfield airport projects planned in Goa, Pune, Navi Mumbai, Greater Noida and Kannur Modernisation / upgradation of metro airports induction of partners for Chennai, Kolkata expected Aviation components (Source: Ministry of External Affairs; Ministry of Finance) Promoting European clean technologies in India & tackling climate change 30

31 Issues/ Drawbacks of PPP in India Poorly drafted contracts and lack of understanding of the complexity, context and dependencies of the contract; Lack of experience in the private sector as well as in the government for managing large-scale PPPs; Lack of measurement of performance; Difficulty in managing stakeholder returns, which involve long term deals including the life cycle of asset infrastructure; The market s inability to provide the needed financial instruments and to undertake long-term equity. Promoting European clean technologies in India & tackling climate change 31

32 EBTC Services Service details Promoting European clean technologies in India & tackling climate change 32

33 EBTC Services Service details Promoting European clean technologies in India & tackling climate change 33

34 EBTC Services Service details Promoting European clean technologies in India & tackling climate change 34

35 Questions & Answers

36 Conclusion EBTC: a platform for EU-Indian collaboration Indian needs, demands, and partners continuously being identified Interested in business opportunities? Looking for technology collaborations? Are you planning to develop project? Looking for business & academic partners? Interested in research consortium & projects? Connect with EBTC: Website: info@ebtc.eu Follow us: Promoting European clean technologies in India & tackling climate change 36

37 Thank You EBTC New Delhi (Head Office) DLTA Complex, South Block, 1st Floor 1, Africa Avenue, New Delhi , INDIA Tel: Fax: New Delhi Mumbai Bengaluru Kolkata Brussels