2013 8 Private Sector Development and Public Private Partnerships in Infrastructure - Capability statement ICRA MANAGEMENT CONSULTING SERVICES LIMITED Logix Park, First Floor Tower A4 & A5, Sector 16 Noida - 201 301 Tel: + (91 120) 4515800 Fax: + (91 120) 4515850 Email: enquiry@imacs.in Web: www.imacs.in ICRA Management Consulting Services Limited
Firm overview ICRA Management Consulting Services Limited (IMaCS) is a management and development consulting firm headquartered in India. IMaCS has over 17 years of consulting experience during which we have completed about 1200 projects with over 600 clients across 40 countries. IMaCS is a wholly owned subsidiary of ICRA GROUP ICRA Limited, a leading credit rating agency in India. Group ICRA comprises four businesses, Credit Rating Management Consulting IT (Software) BPO namely, Credit Rating, Management Consulting, IT (Software) and BPO Services, which are offered by four different companies, namely, ICRA Limited (the parent ICRA Limited ICRA Management Consulting Services Limited ICRA Techno Analytics Ltd. ICRA Online Ltd. company), and three fully owned subsidiaries, IMaCS, ICRA Techno Analytics ICRA Techno Analytics Inc. Limited (ICTEAS), and ICRA Online Ltd., respectively. The main driver for IMaCS growth has been a growing need for unbiased and professional views on adopting best business practices arising from economic deregulation, growing international trade & integration, and the increasing need to be globally competitive. IMaCS began as a firm operating in India and has since worked in several parts of the world on its own Denotes either projects done or clients located in a country and through strategic partners. Our New York based subsidiary, IMaCS Virtus Global Partners, Inc. (www.ivgpartners.com) offers Strategy and Transactional Advisory services to companies in North America and in India seeking to operate in the Indo-American corridor. Building on a carefully nurtured knowledge bank of global benchmarks for business and management practices and a repository of high-quality analytical talent, IMaCS has executed assignments for a variety of Indian and International organisations, Governments, and regulatory authorities. Our clientele includes Government and Government agencies, Private sector organizations, multilateral / bilateral development institutions, Banks & Financial Institutions and Regulators. We have executed assignments for multilateral and bi-lateral development agencies such as the Asian Development Bank (ADB), African Development Bank (AfDB), Department for International Development (DfID) United Kingdom, International Finance Corporation (IFC), United Nations Development Program (UNDP), United States Agency for International Development (USAID) and the World Bank. 1
Business Groups and Service offerings IMaCS has six practice areas grouped under Strategy, Risk Management, Process Consulting, Transaction Advisory, Policy Advisory, and Capacity Building. The different business groups and practice areas within IMaCS form our matrix of service offerings. Multi-disciplinary teams are used on most assignments. The diversity of experience in IMaCS 1 2 3 4 5 6 Strategy Risk Management Process Consulting Transaction Advisory Policy & Regulation Capacity Building Enhancing Competitiveness / Market Assessment / Product development/ Market Intelligence / Profit improvement Credit Risk / Market Risk/ Operational Risk / Enterprise wide Risk management/ Risk Analytics/ Risk Software Cost reduction / Process re-engineering / Organisation design / / Supply Chain Management / Outsourcing M&A / Due diligence / Project Advisory / Bid advisory / Financial restructuring Policy Advisory / Regulatory Economics / PPP Models/ Governance Investment Institutional Programme Sustainable Monitoring Climate Strengthening Management Development & Evaluation teams helps it to adopt a creative and cross-functional approach to problem solving, which has not only been very successful in practice, but has also been well appreciated by all our clients. Most consultants at IMaCS have advanced academic degrees and also have experience in reputed firms before joining IMaCS. Both fresh graduates and experienced consultants undergo formal and informal training in IMaCS to deliver high quality solutions to clients. IMaCS clients also have the benefit of the considerable organisational expertise that IMaCS has built up over the past 15 years. IMaCS consulting activities are organised along five verticals: 1. The Infrastructure Group,, focuses on policy and project transactions in the areas of sector reform and restructuring, creating public private partnerships, and building capacity in government and public sector institutions. At a Policy level, IMaCS seeks to serve regulators, governments and multilateral agencies in formulating or refining sector-wide policy issues such as licensing, regulation, business rules, competition, tariffs, service level obligations, and subsidies. At a Project Transaction level, the Group has accumulated substantial experience and skills in handling engagements related to regulatory representations, financial modelling, structuring payment and security mechanisms, designing project contracts and concession agreements, and providing assistance in financial closure for various infrastructure projects. 2. The Banking and Finance Group focuses on assisting banks and financial institutions in Strategy, Risk management, Process improvement and Transaction advisory. Our services span M&A, Risk management (credit/ market/ operations), Strategy and Business planning, Organisation design and restructuring, derivatives strategy, corporate debt restructuring and purchase/sale of portfolios. Besides providing consulting services to banks, IMaCS also develops and installs software programmes in the areas of risk management and workflow automation related to credit management. IMaCS also designs and conducts training programmes in Risk Management. 2
3. The Corporate Advisory Group focuses on enhancing competitiveness of clients across a variety of sectors and industries. IMaCS brings sector specific expertise and experience in a) Auto & Industrial Markets b) Retail and Consumer Markets and c) Healthcare, Hospitality and Tourism and d) Education and Skill Building. Specific areas of consulting include Strategy and Competitiveness at firm/industry/region/country levels, shareholder value maximisation, business process design and improvement, entry strategies and product positioning, enterprise-wide risk management, evaluation of acquisition or divestiture plans, and transaction assistance (e.g. partner search, valuation, due diligence, structuring deals and business and financial restructuring). 4. The Energy Group focuses on strategy, policy and transactional issues related to Electricity, Oil & Gas and Renewables. The Group has significant expertise in restructuring and reform process in the Electricity sector having worked with multiple entities such as the government, regulators, state owned and private power companies from early stages of sector reform in India. Our services cover regulatory assistance to utilities and regulatory commissions, restructuring and privatization, formulating strategies and business plans for utilities, conducting market assessment studies for investors/utilities, providing assistance to developers/project appraisal/project risk assessment, and investment and transaction assistance. IMaCS has assisted Indian and international business groups in formulating strategies to enter the Energy sector. IMaCS has a strong focus on Renewables having worked in wind, hydro, co-generation, and biomass segments, both at policy and project levels. 5. IMaCS Development Consulting Group has emerged out of IMaCS experience in working with profit-seeking organisations and investors with the principle that practices commercial enterprises follow are just as applicable for organizations working in the not-for-profit, government and social development. The significant difference between for-profit and not-forprofit organizations is essentially in how they are funded and/or in the expectations of returns of their respective sponsors. The quest for strategic clarity, operating efficiency, and financial sustainability remain the top priorities for senior management of all kinds of organizations, spanning from profit-seeking enterprises to not-for-profit organizations in the development sector. IMaCS works with governments at various levels national, state or local government - in a bid to help them become more effective in achieving their objectives. Our clients include Government institutions at central, state and local levels, bilateral and multilateral aid agencies in India and overseas. 3
IMaCS Energy and Infrastructure Group The Energy and Infrastructure Group of IMaCS focuses on policy and transactional projects in the areas of sector reform and restructuring, creating public private partnerships, and building capacity in government and public sector institutions. Infrastructure Developers Banks, Lenders, Private Equity, Multilateral Institutions At the Policy level, IMaCS seeks to serve regulators, governments and multilateral agencies in formulating or refining sector-wide policy issues such as licensing, regulation, business rules, competition, tariffs, service level obligations, and subsidies. Sponsors/Government Regulators At a Transaction level, our Infrastructure group has accumulated substantial experience and skills in handling engagements related to regulatory representations, financial modelling, structuring payment and security mechanisms, designing project contracts and concession agreements, and assistance in financial closure for various infrastructure projects. Our transaction advisory services spans the project development cycle. 1.Feasibility and Project Structuring Project Identification and Pre-feasibility Demand/Traffic Assessment Technical & Financial Feasibility Economic Cost Benefit Analysis Environmental Impact Assessments Structuring Concessions and/or Joint Ventures Contract Documentation 2.Bid Process Management /Advisory Preparing bidding documents RFQ/RFP Drafting and reviewing concession agreements Assisting private developers in bidding for projects Financial Modeling and Project Risk assessment Conducting pre bid meetings bid evaluation & selection of bidder 3. Financing and Implementation Infrastructure project structuring & appraisal Financial Engineering & Structured Finance Assisting credit enhancement in projects Sell and Buy side Advisory Private Equity and Debt finance Assistance in negotiation with lenders Our Energy and Infrastructure Group works across the Energy (including Power, Oil & Gas and Renewables), Transportation, Urban Infrastructure and Social Sectors (Education and Healthcare) across a variety of functional areas. The Practice has a core team of in-house consultants, an extensive database of external experts, and partnerships with a range of collaborating institutions. We recognize the need for infrastructure development in countries in the emerging markets, and have accordingly built our research, knowledge base, networks, and delivery mechanisms to work globally. 4
IMaCS services in Public Private Partnerships IMaCS brings rich experience in Private Sector Development and Public Private Partnerships (PPPs) through deep involvement in several transitioning sectors (that were otherwise provisioned by public agencies and where private sector participation and PPPs have been initiated through competitive bidding and market development frameworks created through policy intervention) since the initial stages of reform. Our work in PPPs covers both Policy and Project level support for clients across Government & Government agencies, Regulators, Multi-lateral agencies and Private Sector organisations. Our sectoral expertise in PPPs and private sector development extends across i) Transportation (Airports, Ports and Highways), ii) Power (Generation, Transmission and Distribution), iii) Renewables, iv) Urban Infrastructure (Water supply, Waste-water recycling, Solid Waste Management), v) Gas (Transmission lines and City Gas networks), vi) Telecom (Rural Mobile Telephony), vii) Skill Building and viii) Healthcare. IMaCS work in Public Private Partnerships Key Highlights Policy support: 1. Development of a Practitioners Toolkit for developing PPPs in Municipal Solid Waste Management on behalf of the Ministry of Urban Development, Government of India. 2. Development and maintenance of a comprehensive web-based database of PPP projects (www.pppindiadatabase.com) on behalf of Department of Economic Affairs, Ministry of Finance, Government of India 3. Development of a Communication Strategy and a Practitioners Manual for handling Communication in PPPs for Department of Economic Affairs, Ministry of Finance, Government of India 4. Formulating a Strategy and Business Plan for a regional Urban Development Fund seeking to attract private sector finance and participation in the Urban Sector. Transaction Design and Bid Process Support 1. Urban: Advising on projects involving over USD 200 million worth in Water Supply and Waste - water reuse and concluded a number of transactions in Solid Waste Management. Successfully concluded bidding for India s first large scale Waste-water reuse PPP project in the city of Surat in Gujarat. 2. Power: Transaction advisor for the first Public Private Partnership in Power Transmission in India by successfully assisting the Central Power Transmission Utility in identifying a Joint Venture Partner for the Western Region Grid Strengthening project in India. Besides this, IMaCS has provided Bid Advisory support to over 10 projects in Power Generation and Distribution over the last five years. 3. Telecom: Advised the Universal Service Obligation Fund, Government of India in structuring and bidding out subsidy support for shared extension of mobile networks in rural areas in India. 4. Transportation: IMaCS was part of consortium that advised Government of India in privatization of the airports at New Delhi and Mumbai. Advised bidders on traffic studies and bid strategy in over 15 Highway PPP projects under the National Highway Development Program (NHDP) and on more than 10 PPP projects in the Ports sector in India over the past five years. 5. Skill Building: Retainer Advisor to the National Skill Development Corporation, Government of India to evaluate proposals from Private sector for PPPs in Skill Building and in forming Sector Skill Councils. 5
Our work in PPPs can be organized along three service offerings: 1. Policy and Program level advice 2. Transaction Design, structuring and Bid Process hand-holding 3. Project Bid Strategy advice for private sector developers While service offerings 1) and 2) typically are done with Government / Government agencies (some of which are supported by Multi-lateral / Bi-lateral agencies), service offering 3) is done on behalf of investors / private developers that bid for PPP projects. Our work across diverse stakeholders and across the spectrum from policy, transaction design and bid strategy enables us to provide a balanced multi-dimensional perspective to our clients. 1. Policy and Program level advice: Experience with PPPs both internationally and in India suggest that PPPs require a strong enabling environment including a clear sector level policy, institutional capacity for project development and structuring within the Government / Concessioning agencies and internal capacities to profile, disseminate and learn from past experience and best practices. IMaCS' expertise in PPP policy advisory covers preparation of policy guidance documents, sector level toolkits, training and capacity building programmes, and creation and maintenance of database on PPP projects. 2. Transaction Design, structuring and Bid Process hand-holding: IMaCS has experience in providing Transaction services for PPP projects in sectors including Transportation Power, Water supply, Waste-water recycling and re-use, Solid Waste Management, Telecom, Healthcare, and Education & Skill Development. 3. Project Bid Strategy advice: has experience in working with private sector developers on providing project level bid strategy advisory services in sectors including Transportation (Ports and Highways), Power (Generation and Distribution), Gas Transmission and City Gas Networks and Urban Services (Water supply, Waste-water recycling and re-use, Solid Waste Management). Case vignettes of select assignments done by IMaCS in each of these areas are provided below: 6
Policy Support 1. Toolkit for PPPs in Solid Waste Management. 2011. The Asian Development Bank (ADB) on behalf of the Ministry of Urban Development, Government of India (MOUD) retained IMaCS to develop a Toolkit for implementation of Public Private Partnerships (PPPs) in Municipal Solid Waste Management (MSWM). The Toolkit aims to facilitate a better understanding of applicability of potential PPP models in the context of issues and challenges faced and to provide a step-by-step approach to identify, evaluate and implement PPP projects in MSWM. A rapid assessment covering recent policy developments in the sector, compilation of case studies of select PPPs and a review of baseline scenario in select satellite towns to explore scope for application of PPP models, was undertaken as part of the process of developing this toolkit 2. Development of PPP communication strategy. India. 2010. Following the Government of India s recognition of PPPs as a key element of its Infrastructure development strategy, it identified strategic communication as a key enabling requirement for mobilizing stakeholder support. Against this backdrop, the Department of Economic Affairs (DEA) Government of India with support from the World Bank retained IMaCS to develop a Communication Strategy to enhance the level of awareness about PPPs among key stakeholder groups. This exercise involved a detailed Communication Needs Assessment (CNA) survey to identify the current mind-set and information needs of key stakeholder groups, review the present level and approaches of communications in the context of PPPs, review PPP Communication Strategies of other countries and draw lessons for India to develop a strategy and action plan for elements of the communication strategy at project and program levels. 3. Communication Manual for PPPs India 2010. As PPPs continue to develop and expand in India, the need to use strategic communication to review, mitigate and manage political and developmental issues and make the outcomes socially and politically sustainable is becoming critical and forms the subject of this Manual. This Manual developed with support from the World Bank and done on behalf of the Government of India is structured as a high level guide on the use of Communication tools and techniques for engaging with stakeholders of a PPP project so as to mobilise their support and to address their concerns. This Manual is intended for the use of Practitioners of PPP projects ( Practitioners ) working in various arms of Government at the Central, State or Local levels, who are entrusted with the responsibility of developing infrastructure projects in India under the PPP mode. 4. Design, Development and Maintenance of PPP Database. India. 2007-12. To track the development with respect to Public Private Partnerships (PPP) in India, the Department of Economic Affairs (DEA), Ministry of Finance, Government of India retained IMaCS to design, develop and maintain a database on Public Private Partnerships. The database would support DEA, Government of India and State Governments in providing information resources to track development of PPPs and measure the overall performance of states in attracting investment into PPPs, apart from other information on PPPs. 7
5. Feasibility study and Business Plan for AMC-Urban Development Fund with AMC being structured as a Public Private Partnership. Orissa. 2009 The main purposes of this engagement done on behalf of a German bi-lateral agency as part of an Indo-German cooperation initiative were to (i) lay the groundwork for the establishment of a Fund modality at the state level for urban infrastructure projects and (ii) develop a proposal for financial cooperation, identifying eligible subsectors for financing and outlining capacity building requirements. As part of the study, IMaCS reviewed the Urban investment needs and potential urban financing market, developed the Institutional Design and Capital Structure, and prepared a five year Business Plan for the Fund. An Asset Management Company (AMC) Fund model was recommended at the end of this exercise with detailed modalities for managing the AMC as a Public Private Partnership. Transaction structuring and bid process support Urban services 1. Transaction advice and Bid process support Water Supply PPP Ranchi Municipal Corporation and Drinking Water and Sanitation Department, Government of Jharkhand (DWSD) 2011. IMaCS has been retained for providing transaction advice and bid process support to RMC and DWSD for conducting a technical assesment of the existing water supply system, scoping and structuring of a comprehensive PPP project for rehabilitation and maintenance of the water supply system in the city, prepare bidding documentation and and provide hand-holding assistance in conducting the bid process for selecting a private operator for the same. 2. Transaction advice and Bid process support. Waste-water reuse and Water Supply PPP projects. Surat. 2009-10. The engagement was completed by IMaCS with support from Asian Development Bank to support Surat Municipal Corporation (SMC) in developing two projects, namely, a) Water supply distribution project in New North Zone in Surat city, and b) Waste water recycling to produce Industrial Grade Water from Bamroli STP and supply to Pandesara Industrial Area (both within the ambit of the SMC). The scope of assistance involved preparation of Feasibility and Investment Banking reports, preparation of bid documents and hand-holding SMC through the bidding process. The Bid process for the Waste water recycling project has been completed and evaluation report of bids received has been submitted to SMC for further action. The Bid documents for the New North Zone water supply project was proposed to be implemented as an affermage contract and the bid documents for the same were submitted. 3. Transaction advice - Waste-water reuse and Water Supply PPPs. Ahmedabad. 2009-10. The engagement, done with support from Asian Development Bank, was to support Ahmedabad Municipal Corporation (AMC) in developing two projects, namely, a) Water supply distribution project in New West Zone and b) Waste water recycling to produce Industrial Grade Water from 8
Pirana STP and supply to Narol and Vatva Industrial Area. The scope of assistance involved preparation of Feasibility and Investment Banking reports (FIBRs), preparation of bid documents and hand-holding AMC through the bidding process. Following finalization of FIBRs, bid documents for both the projects were submitted. 4. Transaction advice - Water Supply PPP. Rajkot. 2009-10. The engagement done with support from Asian Development Bank was to support Rajkot Municipal Corporation (RMC) in developing a Water supply distribution project in the Extended Nyari Zone of the city. The scope of assistance involved preparation of Feasibility and Investment Banking reports (FIBRs), preparation of bid documents and hand-holding the municipal corporation through the bidding process. Following finalization of FIBRs, bid documents for both the projects were submitted. 5. Transaction advice and Bid process support - Solid Waste Management PPP. Koyambedu Municipal Market. Chennai 2009. IMaCS assisted the Market Management Committee of Koyambedu Market Chennai in implementing Integrated Solid Waste Management practices through a PPP contract and in conducting a Bid process to identify a private Service Provider. IMaCS conducted a feasibility study to crystallize project components, assisted MMC in preparing Tender documents and invited bids for the project. Based on the bids received, a private developer was awarded the concession. 6. Transaction advice and Bid process support Solid Waste Management PPP. Dumping yard renewal and Transfer Station Development PPP. Ambattur. Tamil Nadu 2008. IMaCS assisted Ambattur Municipality, a suburban town within Chennai Metropolitan Area, in a feasibility study and bid process for identifying a private service provider for scientific closure of dumping yard and development of Transfer station. The feasibility recommendations were accepted and the bid process led to identification of a private operator for executing the project. 7. Transaction advice and Bid process support - Solid Waste Management PPP. Collection and Transfer. Alandur. Tamil Nadu. 2007. The exercise involved supporting Alandur Municipality, a suburban town within Chennai metropolitan area in conducting a bid process for selection of a private service provider for handling primary collection, secondary transfer and disposal of solid waste. The transaction was completed successfully. 8. Transaction advice and Bid process support - Telecom Subsidy support for rural mobile network expansion. India. The Universal Service Obligation Fund, Department of Telecommunication, Government of India (USOF) had decided to extend financial support for creation of shared infrastructure for mobile services in the rural areas. IMaCS was retained as financial consultant for conceptualising and developing the methodology for support and assisting USOF in the bid design and bid process management for the scheme. IMaCS role on this project involved the following: (a) examine the role of mobile services in enhancing lowcost telecom access in rural areas and rationale for the proposed scheme of USOF, (b) review proposed framework for extending support to mobile infrastructure creation along with our recommendations and design of the scheme, (c) analysis and designing the principles for 9
arriving at the subsidy, (d) create a statistical Index based on district level economic and demographic data to arrive at differentiated benchmark subsidy levels for shareable and nonshareable components, (e) assistance in finalisation of Tender documents and bid process management for the scheme. The process for subsidy support extension was successfully concluded. Healthcare 9. Transaction advice and Bid process support Healthcare - North Goa District Hospital PPP, Mapusa Goa. 2010. This project is to facilitate a transaction for Government of Goa to enter into Public- Private Partnership (PPP) contract with an experienced Private Service Provider for operating and managing a government hospital in Goa. The scope of work for this study involved: assisting the Health Department in the selection of suitable firms as legal consultants and also assisting in the entire building process up to the signing of the concession agreement; advising on the commercial and capital structuring; development of various possible alternatives for revenue maximization and preparation of revenue model for the project; assistance in preparation of Bid documents including the relevant Schedules of the Concession Agreement, and assisting the Health Department in the entire Bid Process and selection of Concessionaire. Energy 10. Transaction advice and Bid process support - Power Transmission Western Region system strengthening scheme II. India. The Power Grid Corporation of India Limited (PGCIL) appointed IMaCS to provide assistance in selection of private player (Independent Power Transmission Company - IPTC)) to execute two transmission projects. The said projects are a part of the transmission system associated with Western Region system strengthening scheme II. The project involved assistance to PGCIL in preparation and review of Model of Financing Package and Base Project Cost and Criteria for Evaluation of Financing Package & Base Project Cost and Tariff alongwith Price Variation (PV), sharing of RFP methodology being followed for similar projects by other organisations in India and Abroad, review of draft RFQ prepared by POWERGRID including responding to queries of POWERGRID/Bidders on the RFQ document, review and finalisation of draft RFP (financial & commercial aspects), review and finalisation of various contractual documents like the Shareholder s Agreement (SHA), Implementation Agreement (IA), Transmission Service Agreement (TSA), conduct of pre-bid conferences and issue of clarifications to Bidders on RFP document, review of Evaluation Report of Financial Package and Project Cost and assisting POWERGRID in review, negotiation & finalisation of various Contracts and Project Agreements/Documents till financial closure. The bid process was successfully concluded. 11. Bid process support - Competitive Power Procurement under Case I and Case II bidding guidelines. IMaCS assisted the Haryana Power Generating Company Limited in a bid process 10
management for the development of a 1338 MW coal based thermal power plant at Jhajjar District in the State of Haryana as part of assistance for procurement of power of 3200 MW by tariff based competitive bidding. IMaCS has also assisted utilities in several states including Gujarat, Uttarakhand, Bihar and Madhya Pradesh in conducting similar bid processes for competitive procurement of power under Case I. 12. Bid process support Selection of a joint venture partner for development and operation of a coal mine. IMaCS assisted the Punjab State Power Corporation Limited (PSPCL) for evaluating the tenders and selection of a joint venture partner for formation of a joint venture company for selection, allottment, development, mining and supply of coal to power stations of PSPCL. Transport 13. Bid process Ports. PPP for marine services. IMaCS was appointed by a port management company to provide financial advisory and bid process management services for outsourcing/privatisation of marine services. The Port proposed to either sell the equipment for marine services (Tugs and Pilot Launches) and charter them back from the purchaser or retain the equipment with the Port and privatise manning, operation and maintenance of these facilities. The Port had called for tenders for the above and appointed IMaCS to undertake financial and technical evaluation of the tenders and suggest the best option - outsourcing/privatisation of marine services. IMaCS evaluated the technical bids submitted by the bidders for adherence and responsiveness to the tender document and assisted the client in discussions with the bidders with regard to the data gaps and clarifications on issues relating to relevant experience of the bidders. IMaCS evaluated the price bids submitted by the bidders under both options and calculated the Net Present Value of the cash outflows -and recommended a bidder under the sale and charter back option. 14. Financial Advisory support. Airports Authority of India (AAI). Renovation and Modernisation of Mumbai and Delhi airports. The Government of lndia (GoI) had decided to restructure and modernize two major metro international airports in India through formation of joint ventures between the Airports Authority of lndia (AAI) and private players, to be selected through an international competitive bidding process. AAI appointed a consortium consisting of a leading investment advisory services firm and IMaCS for the proposed transaction as the financial advisor. As part of the engagement, IMaCS along with the consortium partner estimated aeronautical and non-aeronautical sources of revenue for the airports, commented on feasibility of various financing structures that enable privatisation of airports, conducted sensitivity analysis with respect to key variables affecting project viability, and provided inputs on regulatory issues pertaining to the institutional framework for privatisation. Our consortium also anchored the process of appointment of technical adviser and overall supervision of work carried out by the transaction adviser, prepared the bid documents and carried out bid process management leading to selection of private developers. 11
15. Techno-economic Feasibility Study and Bid Process. Monorail project. Delhi. With a present population of about 15 million, the National Capital Region is growing exponentially. Apart from its intra-city transport demand, the city also attracts a large volume of passenger traffic from other areas due to its historical, political, economic and administrative importance. Considering present and future transport demand, various schemes to augment public transport have been planned or are under implementation. One of the projects is a Mono Rail Project, a Light Rail Transport System for three corridors in the city. IMaCS, in consortium with an Indian technical consultancy firm and two Japanese consultancy firms, undertook this study, in which IMaCS role was primarily to undertake financial analysis and recommend financing structure, including viability gap funding for three corridors in the city. 16. Transaction strucutring and bid process. Airports. Air Cargo complex. The Airports Authority of India (AAI) appointed IMaCS to carry out evaluation of the bids received for the cargo complex at a major metro airport. AAI received varied bids from disparate consortia, which then had to be brought onto a common measuring scale for evaluation and final selection. IMaCS drafted the bid documents, evaluated the technical and financial proposals submitted by the bidders, developed selection criteria/matrix of desired variables for ranking of proposals/bids, and carried out negotiations with the selected developer on behalf of AAI. Bid advisory for private developers Transportation 1. Bid advisory support. PPPs in Terminals in Major Ports. India. IMaCS has advised private developers / bidders in bidding for 5 PPP projects at Terminals in Major Ports (Federal ports in India that are directly under the Ministry of Shipping, Government of India). Bid advisory assistance to developers in these projects has typically covered market assessment, financial modelling, risk analysis and bid strategy. Some of the PPP projects for which IMaCS advised private developers include a) Marine Liquid Cargo Terminal, Ennore Port b) Iron ore berth. Paradeep Port, c) General Cargo Berths. Kandla Port, d) Alumina Berth. Visakhapatnam Port and e) 4 th Container Terminal. JNPT Mumbai f) EQ-1 Visakhapatnam Port g) North Cargo Berth II Tuticorin Port h) Coal Terminal Mormugao Port 2. Bid Advisory support. PPPs in Minor Ports. IMaCS has advised private developers / bidders in bidding for over 10 PPP projects in Minor Ports (ports in India that are developed by respective State Governments). Bid advisory assistance to developers in these projects has typically covered market assessment, financial modelling, risk analysis and bid strategy. Some of the PPP projects for which IMaCS advised private developers include a) Machilipatnam Port b) Cuddalore Port, c) Hazira Port d) Mundra Port, e) Dhamra Port, f) Pipavav Port Rail connectivity, g) Subarnarekha Port h) Nargol Port 3. Bid Advisory support. Highway PPPs. IMaCS has advised private developers / bidders in bidding for Highway PPP projects being bid out under the National Highway Development 12
Program. Bid advisory assistance to developers in these projects has typically covered market assessment, financial modelling, risk analysis and bid strategy. IMaCS has advised bidders on over 35 projects over the past 10 years. 4. Bid Advisory Support. Railways. Mozambique. The Government of Mozambique received financial assistance from the International Development Agency to rehabilitate two separate railway lines as part of a single railway project, through private sector participation on BOT basis. The privatisation programme required setting up of an SPV, with equity contribution from the Government of the country, the state owned incumbent railway operator (CFM) and a private sector operator. The SPV was to receive subordinate debt from IDA at concessional rates, and the concession to operate the identified railway lines after rehabilitating them. The client, a leading turnkey infrastructure construction company, in consortium with a leading technical consultancy firm, wished to bid for forming the SPV, which was to be granted the concession for developing and operating the Beira Rail System. The deciding criterion for the bids was the amount of subordinate fund (subvention) to be sought from IDA. IMaCS assisted a leading railway construction company in carrying out the due diligence and risk assessment of the project. The project feasibility report, concession agreement and other bid documents were reviewed to identify key commercial risks in the project, and queries were raised for the prebid meeting. Following the receipt of clarifications/modifications in the bid documents, a comprehensive financial model was developed to analyse the financial viability of the project and estimate the optimum level of IDA funding required. IMaCS carried out sensitivity analyses, by varying certain critical parameters to arrive at the optimum level of IDA funding required. Our client emerged as the winning bidder for this project and has since implemented the project. The Beira Railway project has emerged as a critical logistic link for export of coal from Mozambique. Power 5. Bid strategy. Ultra Mega Power Project PPPs. India. IMaCS advised power sector developers in bidding for 4000 MW Ultra Mega Power Projects (UMPPs) developed by Government of India on a competitive bidding basis at three locations, namely, Sasan, Tilaiya and Mundra. In these projects, IMaCS support covered risk and regulatory assessment, financial and tariff modelling to suggest means of financial engineering and to develop an effective bid strategy. 6. Bid strategy. Other Power Projects IMaCS advised private sector players for participating in BOO bids for a lignite based power project and a solar photovoltaic project. IMaCS has also advised two private sector players in bidding for supply of power under Case I bidding guidelines of Ministry of Power, Government of India. 7. Bid strategy. Power distribution PPP under Distribution Franchisee arrangement for Aurangabad and Nagpur. IMaCS advised two private sector players in bidding for the Distribution Franchisees in the competitive bids conducted by Maharashtra State Electricity Distribution Company Limited (MSEDCL). 13
8. Bid Strategy. Gas Transmission. IMaCS was retained by a leading Gas sector operator for advice on financial modelling and bidding strategy advise for two Gas Transmission networks in Northern India that were bid out by the Gas regulator, PNGRB. IMaCS scope of work involved financial modelling and feasibility assessment. Our client was declared the successful bidder in both the bids. 9. Bid Strategy. City Gas Networks. IMaCS has been retained by a leading gas sector operator for pre-bid advisory and for assistance in preparation of bids for City Gas Networks for three cities in India. Water supply 10. Bid Strategy. Water Supply. Aurangabad water supply PPP. IMaCS was retained by a leading Indian water operator to review the PPP structure and RFP for this project and conduct a demand and revenue assessment study. As part of the study, IMaCS conducted a technical assessment of the network and a household level survey to identify issues in the network and distribution system. IMaCS also reviewed the contract and provided inputs to the operator on contractual aspects that impacted the bankability of the project. 14
I M a C S Corporate Office: Logix Park, First Floor Tower A4 & A5, Sector - 16 Noida - 201 301 T: + (91 120) 4515800 F: + (91 120) 4515850 Registered Office: 1105, Kailash Building, 11th Floor 26 Kasturba Gandhi Marg New Delhi 110001 T: + (91 11) 2335 7940-50 F: + (91 11) 2335 7014 Contacts Mr. Anand Madhavan Head Energy & Urban Infrastructure Phone: + 91 44 45964300 / 2434 0043 (Chennai) Mobile: + 91 98404 62556 (Mobile) Email: anand.m@imacs.in Mr. Harish Kamath Head - Transport Phone: + 91 22 30470047 (Mumbai) Mobile: + 91 98204 49124 (Mobile) Email: harish.kamath@imacs.in Mr. Sunil Varma Marri Head - Energy Phone: + 91 120 4515800 (Noida) Mobile: + 91 98490 38227 (Mobile) Email: sunil.marri@imacs.in Mr. Sriram V Chief Operating Officer Phone: + 91 44 4596 4300 /4596 4326 (Chennai) Mobile: + 91 98400 88273 (Mobile) Email: sriram.v@imacs.in 15