DEVELOPMENT RESIDENTIAL & COMMERCIAL ...bshb.in/download/BSHB Pre-bid Con - Real Estate...
Transcript of DEVELOPMENT RESIDENTIAL & COMMERCIAL ...bshb.in/download/BSHB Pre-bid Con - Real Estate...
Pre-Bid cum Investors’ Conference
12th August 2013
“Changing Urban Landscape of Bihar”
DEVELOPMENT OF RESIDENTIAL & COMMERCIAL PROJECTS IN
PATNA ON PPP BASIS
Agenda
1
Background
Project key features and provisions of Bid Documents
I) Residential- cum-Commercial development Project at
• Project #1: Residential at Sector-5, Bahadurpur, Patna along with
Commercial at DS Sector, Kankarbagh, Patna
II) Commercial Development Projects at
• Project #2: L-Sector Kankarbagh, Patna
• Project #3: Hanuman Nagar, Patna
Q&A
Agenda
2
Background
Project key features and provisions of Bid Documents
I) Residential- cum-Commercial development Project at
• Project #1: Residential at Sector-5, Bahadurpur, Patna along with
Commercial at DS Sector, Kankarbagh, Patna
II) Commercial Development Projects at
• Project #2: L-Sector Kankarbagh, Patna
• Project #3: Hanuman Nagar, Patna
Q&A
Background
3
Bihar State Housing Board
a State level nodal agency
to provide “housing for all”.
Operates under Urban Development & Housing Department (UD&HD), GoB
BSHB envisions to develop 1,00,000 housing units across Bihar in next 5 years
Public Private Partnership (PPP) is the preferred mode
Pilot Projects already approved by State Cabinet
Bids invited for 3 projects
Transaction Advisors:
Deloitte Touche Tohmatsu India Pvt. Ltd. in association with Kapoor & Associates
and ASA Law
Architect Consultants (for Bundled Project):
Black Inc, Ahmedabad
Background
4
Pilot Projects under consideration
Proposed Sites for Development
# Project Type Site Location Site Area Type Proposed Development
1 Bundled Project:
Residential cum
Commercial
Projects
Sector 5, Bahadurpur
(Opp. TV Tower)
10.17
acres Greenfield
• 1,596 Flats
• Commercial Complex
(Mall, Office, Shopping
Complex etc.)
DS Sector, Kankarbagh
(3 Sites)
4.20
acres Greenfield
2 Lohianagar (Kankarbagh)
Sector-S, T, U –Rental
~ 32.35
acres Brownfield
• ~2,488 Flats +
Commercial
3 Bahadurpur Sector-3,6
~ 74.41
acres Brownfield
• ~8,454 Flats +
Commercial
4 Katari, Mustafabad, Gaya
~ 125
acres Greenfield
• ~12,696 Flats +
Commercial
5 Damodarpur, Muzaffarpur
~21.75
acres Brownfield
• ~1,496 Flats +
Commercial
6
a
Commercial
Projects
L-Sector, Lohianagar,
Kankarbagh
1.70
acres Greenfield
• Commercial Complex
(Mall, Office, Shopping
Complex etc.)
6
b Hanuman Nagar, Kankarbagh 0.55
acres Greenfield
• Commercial Complex
(Mall, Shopping
Complex etc.)
RfP
Issued
RfP
Issued
Upcoming
Projects
Agenda
5
Background
Project key features and provisions of Bid Documents
I) Residential- cum-Commercial development Project at
• Project #1: Residential at Sector-5, Bahadurpur, Patna along with
Commercial at DS Sector, Kankarbagh, Patna
II) Commercial Development Projects at
• Project #2: L-Sector Kankarbagh, Patna
• Project #3: Hanuman Nagar, Patna
Q&A
About the Project – Bundled Project
6
# Factor Description
1 Name of the
Project
Development of:
Residential Property at Sector-5 Bahadurpur, Patna
bundled with
Commercial Property at DS Sector, Lohianagar, Patna
2 No. of
Development
Sites
A. Four (4) sites:
Residential Site ~ 10.17 Acres at Sector-5 Bahadurpur (Patna)
3 Commercial Sites total ~ 4.20 Acres at DS Sector, Lohianagar
(Patna):
o Site A ~2.38 acres
o Site B ~1.13 acres
o Site C ~0.69 acres
3 Proposed
Development
Residential: As per BSHB Architectural design, drawings &
Specifications
Commercial : As per applicable developmental norms
4 Estimated
Project Cost Rs.561 Cr
5 Lease Period 30 (Thirty) Years
6 Lease
Renewals
Renewable with each term of 30 (Thirty) years
No limit on number of Renewals
Bundled Project– Residential Site
8
View of Bahadurpur, TV Tower site and Adjoining TV Tower
Land Area: ~10.17 acres
Bundled Project –Commercial Sites
10
DS Sector – Site A Land area DS Sector – Site A Access Road
• Site A approx. 2.38 acres
DS Sector – Site B
• Site B approx. 1.13 acres • Site C approx. 0.69 acres
3 sites with total land approx.
4.20 acres situated at DS Sector,
Lohianagar (Patna)
DS Sector – Site C
PPP
PPP Development Model
12
Receives leasing rights for 30 years (comm., grant flats),
Renewable for 30 yrs. each time
Undertakes development of commercial components
such as retail, office development
1 2
3
4
5
Part Revenues to fund cost of development of
residential flats for BSHB
6
7
Players participate in Bidding Process for
Residential cum Commercial Projects
(based on technical and financial qualifications)
Development of Residential Flats 2BHK Flats
Private Developer (get selected) Bihar State Housing
Board
1
2
Land for Commercial Development
Land for Residential Development
3
Allotment of Housing Units (excl. flats under
grant) by BSHB
Flow of PPP related activities undertaken by both parties
O&M for 2 Years and handover to RWA
Earns revenues from commercial spaces & flats
under grant
Role of Bihar State Housing Board
― Provides developer with commercial land parcel on 30 years lease;
― Renew Lease
― All development, earnings, expenditure related rights and obligations to be transferred to private player;
― In lieu of commercial land, developer mandated to develop residential housing for BSHB as per specifications laid down by the Board;
― Net future earnings from the commercial land to form the source of construction cost required for the residential units;
― Allotment rights and obligations w.r.t. residential development (excl. grant flats) to remain with BSHB
Role of Private Sector Developer
― Receives commercial land parcel for 30 years on lease;
― Lease Renewable for 30 years each time on payment of Lease Renewal charges
― No restriction on number of Renewals
― Develop commercial land;
― Retain and manage commercial parcel earnings, expenditure;
― Undertake development of residential housing in line with specifications provided by BSHB;
― Transfer residential property (excl. grant flats) on completion of construction to BSHB;
― Remain responsible for O&M for 2 years and any defects, during the defect liability period (3 years) in case of residential property
14
Joint Development of Residential Flats by Private Developer as per specification laid down by BSHB
Proposed PPP Development – Roles
Selection of Private Player for Bundled Project – Selection Criteria
15
Selection through International Open Competitive Bidding Process
Technical Eligibility Criteria:
I) Minimum Qualification:
Residential Construction/ Development Experience* >= 3.05 Acres in last 5 years;
Commercial Construction/ Development Experience* >= 1.26 Acres in last 5 years;
II) Technical Capacity:
Project Experience of > Rs. 841.50 Cr in last 5 years
At least 1/4th from Eligible Projects (> Rs. 112.20 Cr.) in Category 1 and/ or Category 3
III) Financial Capacity:
Minimum Net Worth of Rs.140.25 Cr
Category 1 and 3 would be deemed to include housing, residential townships and mass housing.
Category 2 and 4 (core Sector) would be deemed to include real estate, factory buildings, industrial
buildings, industrial parks, port terminal, airport terminal, railway stations, commercial complexes and office
complexes.
IV) Financial Bidding Criteria:
Highest Premium offered or Lowest Grant quoted in terms of “Number of Flats”
* Proof = clients work orders and completion certificates from Client/Engineer/app. Government Instrumentality
TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT
16
Ref. Article Key Provision
Recital Single Stage Bidding Process.
Special Purpose Vehicle (SPV) to be incorporated
Article
2
Scope The Scope of Project includes:
(a)Construction of Project
(b)Sub-leasing/renting/transferring etc. of Assets on Commercial Property {and Flats
under Grant} after COD;
(c)O&M of Commercial Property – during entire period
(d)O&M of Residential Property for 2 years and handing over to RWA
(e)Handing over Residential Property {except Flats Under Grant} to BSHB for
allotment; and
(f) Any other obligations as per agreement
Article
3
Licence
and
Lease;
Sub-Lease
(a) license right to develop, operate and maintain Project
(b) upon COD, lease-hold rights of Commercial Property {and Flats Under Grant} for
30 years
(c) including right to further sub-lease, transfer, grant licence, tenancy rights, similar
relationship
TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT
17
Ref. Article Key Provision
Article
3
Renewal Upon expiry of 30 Years, Authority shall renew Lease Rights
Renewal for 30 years upon payment of Renewal Premium
No limit on number of Renewals
Article
3
Transferability In case of Commercial Property:
Lease Rights are also transferable after COD
Transfer subject to payment of Transfer Dividend
Sub-Lease, tenancy, grant licence, similar arrangement allowed under
intimation to the Authority
No Transfer Dividend payable in case of Sub-leases/ creating tenancy/
granting licence rights etc.
Article
7
Representati
on and
warranties
For the Developer:
Selected bidder/ Consortium & Associates, to hold mini. 51% Equity;
each member to hold (i) 26% Equity and (ii) 5% TPC during Construction
Period & 3 years thereafter
Article
9
Performance
Security
Rs. 22.44 Cr
To remain in force till 3 months after Defect Liability Period (DLP)
TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT
18
Ref. Article Key Provision
Article
12
Construction Architectural design and drawing for Residential Property made available
by the Authority at the time of bidding to be followed.
Structural design and drawing for Residential Property made available by
the Authority at the time of bidding to be taken as reference only.
Developer to get Structural design & drawing proof checked by NIT or IIT
Bonus for early completion of Construction
Article
17
O&M Developer solely responsible for O&M of Commercial Property
O&M of Residential Property for 2 years from COD
Authority to ensure incorporation of RWA/ society/ association etc.
Developer to hand over the O&M work to RWA
Article
18
Safety
Requirement
Developer to comply with the Safety Requirement, rules, directions and
guidelines
IE to perform Safety Audit
Article
20
Independent
Engineer
Authority to appoint the I.E., before Commencement of Works
Cost of I.E. to be borne equally between the Authority and Developer
Article
21
Financial
Close
Developer to achieve Financial Close within 180 days from Signing of
Agreement
in the event of delay, entitled for further upto 60 (sixty) days, as per DLA
TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT
19
Ref. Article Key Provision
Article
22
Marketing/
Allotment/
Booking
Advance Booking:
Entitled to commence booking on Commercial Property after Appointed Date
Also entitled to commence booking of Flats under Grant upon 65% construction
completion
Sub-lease/ transfer etc.:
Only after COD, may execute Sub-Lease Deed, Licence agreement, tenancy
agreement
Flats Under Grant:
• A tri-partite agreement shall be executed amongst Authority, Developer
and transferee in case of Flats Under Grant
• No Transfer Dividend for first transfer
• Payable for subsequent transfers
Commercial Property:
• lease rights transferable with prior permission and upon payment of Transfer
Dividend after COD
Article
24
{Premium}
/ {Grant}
Developer may offer Upfront Premium in the form of Cash OR
Seek Grant in the form of ……number(s) of residential flats (“Flats under Grant”)
out of the Residential Property plus nominal Cash Support in the range of Re. 0 and
Re. 5,00,000/-*
*Nominal cash support to avoid tie-bidding
No roof-top rights, No change in Architecture and Civil structures of Flats under Grant,
Interiors incl. internal finishes, fittings can be modified in case of Flats Under Grant;
TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT
20
Ref. Article Key Provision
Article
32
Termination In the Event of Developer Default –
During Construction - NIL
During Operations - 65% of Fair Value of Assets*
*Net of insurance cover& Grant Recovery
In the Event of Authority Default –
• During Construction - 100% of Fair Value of Assets*
• During Operations - 100% of Fair Value of Assets*
*Net of insurance cover
Article
34
Defect Liability Residential Property = 3 years from COD
Agenda
21
Background
Project key features and provisions of Bid Documents
I) Residential- cum-Commercial development Project at
• Project #1: Residential at Sector-5, Bahadurpur, Patna along with
Commercial at DS Sector, Kankarbagh, Patna
II) Commercial Development Projects at
• Project #2: L-Sector Kankarbagh, Patna
• Project #3: Hanuman Nagar, Patna
Q&A
About The Project
22
Lease for Commercial Development of :
• approx. 1.70 acres of Land at L- Sector in Kankarbagh, Patna &
• approx. 0.5463 acres of Land at Hanuman Nagar in Kankarbagh, Patna
# Factor Description
1 Name of the
Project
• Commercial Development at L- Sector in Kankarbagh, Patna
• Commercial Development at Hanuman Nagar in Kankarbagh, Patna
2 No. of
Development Sites
• L Sector Project : One site ~ 1.70 Acres of land
• Hanuman Nagar Project: One site ~ 0.55 acres
3 Total Built up Area • L Sector Project : Approx. 17,200 Square Meters, FAR = 2.5
• Hanuman Nagar Project: Approx. 5,527 Square Meters, FAR = 2.5
4 Estimated Project
Cost (in INR crore)
• L Sector Project : Approx. INR 59.74 Cr
• Hanuman Nagar Project: Approx. INR 15.71 Cr
5 Lease Period • 30 Years
6 Lease Renewals Renewable with each term of 30 (Thirty) years
No limit on number of Renewals
About The Project – Hanuman Nagar Project
27
Hanuman Nagar site area – 0.546 acres
Hanuman Nagar site frontage Hanuman Nagar site access
PPP Development Model
28
Leasing rights for 30 years
Renewable - 30 yrs. each time
Undertakes development of Commercial Components
Earns revenues from sub leasing of commercial
spaces
1 2
3
4
5 6
Players participate in Bidding Process for specific
project(s)
(based on technical and financial qualifications)
**Earns**
• Lease Premium (one time) +
• Fixed Annual Lease Rent (Notional amount)
Private Developer (get selected)
1
2
Land for Commercial Development
Bihar State Housing Board
PPP
Flow of PPP related activities undertaken by both parties
Selection of Private Player for Bundled Project – Selection Criteria
29
Selection through International Open Competitive Bidding Process
Technical Eligibility Criteria:
I) Technical Qualification: (In last Five Years)
L-Sector Project: Commercial Construction/ Development Experience >= 34,440 Sq Mt;
Hanuman Nagar Project: Commercial Construction/ Development Experience >= 11,054 Sq Mt;
II) Financial Capacity:
L-Sector Project: Minimum Net Worth of Rs.14.94 Cr
Hanuman Nagar Project: Minimum Net Worth of Rs.3.93 Cr
III) Financial Bidding Criteria:
Highest Lease Premium. “Highest Bidder” shall mean the Bidder who is offering the highest Lease
Premium.
TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT
30
Ref. Article Key Provision
Recital Single Stage Bidding Process.
Special Purpose Vehicle (SPV) to be incorporated
Article
2
Scope The Scope of Project includes:
(a)Construction of Project
(b)Sub-leasing/renting/transferring etc. of Assets on Commercial Property after COD;
(c)O&M of Commercial Property – during entire period
(d)any other obligations as per agreement
Article
3
Grant of
Development
Rights
(a) Lease right to develop, operate and maintain Project
(b) Lease Period of 30 years from Appointed Date
(c) including right to further sub-lease, transfer, grant licence, tenancy rights, similar
relationship
Article
3
Renewal
Upon expiry of 30 Years, Authority shall renew Lease Rights
Renewal for 30 years upon payment of Renewal Premium
No limit on number of Renewals
TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT
31
Ref. Article Key Provision
Article
4
Change in
Ownership
For the Developer:
Selected bidder/ Consortium & Associates, to hold mini. 51% Equity;
each member to hold 26% Equity till 3 years (three years) from achievement of
Commercial Operation of the Project
Article
6
Consideration Nominal Annual Lease Rent Rs.1,50,000/- for L Sector
Rs.50,000/- for Hanuman Nagar Site
Upon Renewal after 30 Years, Annual Lease Rent at increased rate
Article
13
Performance
Security
Rs. 2.99 Cr for L Sector Project
Rs. 0.79 Cr for Hanuman Nagar project
To remain in force until 6 months after issuance of Completion Certificate
Article
14
Construction Developer to obtain and maintain all Applicable Permits
O&M Developer solely responsible for O&M
Developer to prepare, maintain & update an Asset and Project Utility register
Article
15
Drawings Structural design & drawings of Assets and/or Project Facilities to be proof-
checked from IIT or NIT, prior to construction
TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT
32
Ref. Article Key Provision
Article
17
Completion of
the Project
Project Completion : on or before the expiry of 24 months from Appointed
Date
Completion Certificate to be issued only after utilization of mini. 75% FAR
Article
19
Marketing/
Allotment/
Booking of the
Assets
Entitled to commence booking after executing Lease Deed
Lease rights transferable with prior permission and upon payment of Transfer
Dividend after COD
Sub-Lease of Assets on the Commercial Property to comply with the following:
All amount from the Sub-Lease to be deposited in the Project Account
Developer solely responsible for the timely implementation of the Project
Article
20
Grant of Sub-
Lease Rights
The Developer shall grant sub-lease, licence, tenancy or similar rights/
arrangements of spaces by way of execution of a Sub-Lease Deed to be
entered into between the Developer and the Sub-Lessee/ transferee
Term of such Sub-Lease Deed or sub-license Deed shall be co-terminus
Developer to maintain a Sub-Lease Register
TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT
33
Ref. Article Key Provision
Article 23 Lease Period,
Renewal, and
Transferability
Commercial Property – L Sector and Hanuman Nagar :
Lease Rights transferable after COD
Transfer subject to payment of Transfer Dividend
Sub-Lease, tenancy, grant licence, similar arrangement allowed under
intimation to the Authority
No Transfer Dividend payable in case of Sub-leases/ creating tenancy/
granting licence rights etc.
Article 24 Default,
substitution
and
Termination
In the Event of Developer Default –
During Construction - NIL
During Operations - 65% of Fair Value of Assets*
*Net of insurance cover
In the Event of Authority Default –
• During Construction - 100% of Fair Value of Assets*
• During Operations - 100% of Fair Value of Assets*
*Net of insurance cover
Agenda
34
Background
Project key features and provisions of Bid Documents
I) Residential- cum-Commercial development Project at
• Project #1: Residential at Sector-5, Bahadurpur, Patna along with
Commercial at DS Sector, Kankarbagh, Patna
II) Commercial Development Projects at
• Project #2: L-Sector Kankarbagh, Patna
• Project #3: Hanuman Nagar, Patna
Q&A
Selection of Private Player for Bundled Project – Qualification Criteria
36
Project to qualify as Eligible Project:
For a project to qualify as an Eligible Project under Categories 1 and 2:
It should have been undertaken as a PPP project on BOT, BOLT, BOO,BOOT or other similar basis for providing its
output or services to a public sector entity or for providing non-discriminatory access to users in pursuance of its
charter, Lease Rights or Concession or contract, as the case may be;
the entity claiming experience should have held, in the company owing the Eligible Project, a minimum of 26% (twenty
six per cent) equity during the entire year for which Eligible Experience is being claimed;
the capital cost of the project should be more than Rs. 112.20 Crores (Rs. One Hundred Twelve Crores and Twenty
Lakhs only); and
Payments/receipts of less than Rs. 112.20 Crores (Rs. One Hundred Twelve Crores and Twenty Lakhs only)
shall not be reckoned as payments/receipts for Eligible Projects
Factors for Experience across categories
Categories Factor
• Category 1: 1.25
• Category 2: 1.00
• Category 3: 0.75
• Category 4: 0.60
*real estate would include dwelling units as part of industrial estates & other industrial infrastructure such as SEZs/Industrial Parks, institutional
infrastructure development such as schools, colleges, universities, IT-ITeS Campuses/ Hostel buildings etc.; Social/ Rehabilitation projects such as
night shelter buildings, bus shelters, community centers, etc.; hotels, resorts, and serviced apartments, development of amusement parks, recreational
facilities such as planetarium oceanariums, museums, auditoriums, stadiums, etc.; city side development in Airports, i.e. – retail and recreational
construction experience in Airports; development of way side amenities forming part of highway projects
TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT
37
Ref. Article Key Provision
Article
43
Definition Some important definition includes:
“Fair Value” means the updated estimated cost of construction of similar assets of equal
size and specifications, calculated in accordance with the schedule of rates applicable to
the works assigned by the Authority to its contractors, less depreciation calculated by
what is known as the Age/ Life method as applicable at the time of Termination, as arrived
at by the independent valuer mutually appointed by the Parties for the purpose. For this
purpose, developer shall submit the design life of the proposed development at the start
of Construction Period, as certified by IIT/ NIIT, and this shall further be acknowledged
and approved by BSHB. This approved design life shall be the basis of calculating
depreciation while determining the Fair Value of assets
“Renewal Premium” shall mean the premium payable on renewal of Lease or Sub-Lease
by the Lessee or Sub-Lessee or right claiming thereunder to the Authority or BSHB which
shall be equivalent to 10% (5% in case of Flats Under Grant) of the prevalent market
value of the proportionate share in land involved in the renewal as Premium and also the
enhanced Lease Rent on the proportionate share of Land for which renewal is sought for.
“Transfer Dividend” shall mean the amount payable by the Lessee (except for granting
sublease, licence) seeking transfer of his right at any time during the currency of the
Lease which shall be equivalent to 50% *[(higher of prevalent circle rate and the price
consideration for transfer) – (allotment premium)].