S1_110930 PPP Presn_S.R Ramanujam

8/3/2019 S1_110930 PPP Presn_S.R Ramanujam

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PPPs in India

Status, Achievements and Challenges

S.R. Ramanujam

The views expressed in these presentations are the views of the author and do not necessarily reflect the views or policies of the Asian Development

Bank (ADB), or its Board of Directors or the governments they represent. ADB does not guarantee the source, originality, accuracy, completeness or reliability of any statement, information, data, finding, interpretation, advice, opinion, or view presented, nor does it make any representation concerning

the same.



PPPs in India - Status



National Government has a strong focus on

infrastructure investments

Source: Planning Commission



PPPs are making a strong contribution to

infrastructure investments




Energy and telecom have contributed the

maximum share in the past


Note: Data represents investments that would be realised till 2011-12. Share of highways will

increase significantly since a large number of awarded projects will be executed in coming

years.

Share of various sectors in infrastructure PPPs



PPP penetration has grown strongly in transport

sector




PPP projects now spread across several sectors

Sector Number of projects Project Cost in bn USD

Roads 405 36.1

Ports 61 16.5

Airports 5 3.9

Railways 4 0.3

Tourism 50 0.92

Urban Development

(incl metro) 152 6.02

Healthcare 8 0.37

Education 17 0.38

Total 702 64.51

Source: Department of Economic Affairs (Infrastructure division), Government of India

PPP in India Database –

PPP projects awarded, under construction or in operation

Note: Excluding telecom and energy projects. Categorisation and definitions vary as compared

to Planning Commission.



Power TransmissionPower Transmission

HighwaysHighways

PortsPorts

RuralRural

Power DistributionPower Distribution

WaterWater

AirportsAirports

Urban InfrastructureUrban Infrastructure

Text and Listings− Eight text divisions

Note: Sample projects in each sector

JhajjarMaru

Aravalli

Jhajjar

Maru

Aravalli

Delhi Gurgaon

Baroda – Halol

Panagarh – PansitVivekananda bridge

Delhi Gurgaon

Baroda – Halol

Panagarh – PansitVivekananda bridge

PipavavMundra

Hazira

JNPT

Vallarpadam

Pipavav

Mundra

Hazira

JNPT

Vallarpadam

PURAPURA

Delhi

Bhiwandi

Agra

Delhi

Bhiwandi

Agra

KUWASIP

Nagpur

AurangabadLatur

Salt Lake

KUWASIP

Nagpur

AurangabadLatur

Salt Lake

DelhiMumbai

Bangalore

Hyderabad

Delhi

Mumbai

Bangalore

Hyderabad

Hyderabad SWM

Kohlapur W/water

Dehradun SWMDehradun terminal

Amristar terminal

Hyderabad SWM

Kohlapur W/water

Dehradun SWMDehradun terminal

Amristar terminal

PPP projects now spread across several

sectors

Indl ParksIndl Parks

Pharma cityPharma city



PPPs continue to be a priority in national

planning

• Efforts to attract private investment into infrastructure

through the PPP route have met with considerablesuccess….

• …PPP based development needs to be encouragedwherever feasible.

• PPPs with appropriate regulation and concern for

equity should also be encouraged in social sectors,such as health and education. Several StatesGovernments are already taking steps in this direction.

Source: Draft approach to the 12th Five Year Plan, August 2011, Planning Commission



The PPP Eco-System in India



Sectoral laws and regulations enabling or permitting PPPs

e. Electricity Act 2003, Indian Ports Act

Sectoral laws and regulations enabling or permitting PPPs

e. Electricity Act 2003, Indian Ports Act

Central Line Ministries, Statutory bodies

e.g Ministry of Power, NHAI

Central Line Ministries, Statutory bodies

e.g Ministry of Power, NHAI

Cabinet Committee On InfrastructureCabinet Committee On Infrastructure

Developers. Operators, Contractors, Industry associationsDevelopers. Operators, Contractors, Industry associations

Department of Economic Affairs

Planning Commission

Department of Economic Affairs

Planning Commission

State Infrastructure Development

Companies/ Boards

e.g. Gujarat Infrastructure Development

Board

State Infrastructure Development

Companies/ Boards

e.g. Gujarat Infrastructure Development

Board

Line Ministries in the States, Statutory

bodies, Utilities

e.g Madhya Pradesh State Road

Development Corporation

Line Ministries in the States, Statutory

bodies, Utilities

e.g Madhya Pradesh State Road

Development Corporation

State Urban Development/ Finance

Corporations, Municipal Funds

State Urban Development/ FinanceCorporations, Municipal Funds

Urban Local Bodies, Metropolitan

Development Authorities

Urban Local Bodies, MetropolitanDevelopment Authorities

Focussed infra

financiers

Focussed infra

financiersState owned

commercial banks

State owned

commercial banks

Private and intl

banks

Private and intl

banksPrivate equity

funds

Private equity

fundsInvestment

banks, arrangers

Investment

banks, arrangers

Sector regulators

e.g Airports Economic Regulatory Authority, Electricity Regulatory Commissions

Sector regulators

e.g Airports Economic Regulatory Authority, Electricity Regulatory Commissions

Infrastructure focussedvoluntary organisationsInfrastructure focussedvoluntary organisations

Transactionadvisors, Auditors

Transactionadvisors, Auditors

Specialisedinfrastructure media

Specialisedinfrastructure media

Research and traininginstitutions

Research and traininginstitutions

S e

c t o r a g e n c i e s



S e c t o r P r

i o r i t y

S e c t o r P r i o r i t y

F i n a n c i n g i n s t r u m e n t s

F i n a n c i n g i n

s t r u m e n t s

P r o j e c t s u

p p o r t

P r o j e c t s u p p o r t

F i s c a l b e

n e f i t s

F i s c a l b e n e f i t s

Enablers – Financing

PPP is first choice execution model in

highways, ports and airports sector

PPPs are integrated into sector plans

Solar Mission National Highways Development

Prorgamme

Jawaharlal Nehru National

Renewal Mission

PPP is first choice execution model in

highways, ports and airports sector

PPPs are integrated into sector plans

Solar Mission National Highways Development

Prorgamme

Jawaharlal Nehru National

Renewal Mission

Scheme for Infrastructure Financing

through IIFCL

165 projects, 52 bn USD

project cost, 4.9bn USD

sanctioned, 2.6 bn disbursed

(Dec 2010)

Infrastructure Debt Fund

Scheme for Infrastructure Financing

through IIFCL

165 projects, 52 bn USD

project cost, 4.9bn USD

sanctioned, 2.6 bn disbursed

(Dec 2010)

Infrastructure Debt Fund

Viability Gap Fund

100 Projects, 9.8 bn USD project

cost, 1.82 bn USD viability gap

assistance

India Infrastructure Project

Development Fund

40 projects already approved

Pilot projects initiative

Being replicated by States

Viability Gap Fund

100 Projects, 9.8 bn USD project

cost, 1.82 bn USD viability gap

assistance

India Infrastructure Project

Development Fund

40 projects already approved

Pilot projects initiative

Being replicated by States

Tax exemptions

Infrastructure Companies

Banks and intermediaries

Bond investors

Tax exemptions

Infrastructure Companies

Banks and intermediaries

Bond investors



A p p r o v a l s

A p p r

o v a l s

P P P p o l i c i e s

P P P p o l i c i e s

S t a n d a r d i s a t i o n

S t a n d a r

d i s a t i o n

F a c i l i t a t

i o n

F a c i l i t a t i o n

Enablers – Policy and Process

Cabinet Committee on

Infrastructure

PPP Appraisal Committee for

Central sector projects

Empowerd Institution/ Empowered

Committee for approving viability

gap projects

Similar processes at State level

Cabinet Committee on

Infrastructure

PPP Appraisal Committee for

Central sector projects

Empowerd Institution/ Empowered

Committee for approving viability

gap projects

Similar processes at State level

PPP definition

PPP policy

PPP rules

PPP guidance manual

PPP definition

PPP policy

PPP rules

PPP guidance manual

Model Concession Agreements

Standardised procurement

documents Developers

Consultants

Model Concession Agreements

Standardised procurement

documents Developers

Consultants

Supporting PPP cells in States and

central line ministries

Capacity Building Programmes

Knowledge sharing workshops

Online PPP toolkit

Sectoral PPP toolkits

Guidelines on specific topics (PPP

monitoring)

Panel of transaction advisors

Supporting PPP cells in States and

central line ministries

Capacity Building Programmes

Knowledge sharing workshops Online PPP toolkit

Sectoral PPP toolkits

Guidelines on specific topics (PPP

monitoring)

Panel of transaction advisors



ADB Involvement in infrastructure

National Highways Authority

Urban Sector Improvement Programmes

National Highways Authority

Urban Sector Improvement Programmes

FI loan to IIFCL

Non Sovereign Loans and Private Sector LoansBangalore Metro

Energy sector loans

FI loan to IIFCL

Non Sovereign Loans and Private Sector LoansBangalore Metro

Energy sector loans

Pilot Projects

PPP Cells

Knowledge and Policy support

Pilot Projects

PPP Cells

Knowledge and Policy support

Sovereign

Loans

Financing

Enabling

PPPs



Achievements and challenges



Achievements so far

Political priority for infrastructurePolitical priority for infrastructure

Political acceptance of PPPsPolitical acceptance of PPPs

Sector specific solutionsSector specific solutions

Support to make projects viableSupport to make projects viable

Domestic financingDomestic financing

StandardisationStandardisation



What has worked and what hasn’t

Power Roads Ports AirportUrban

TranspW & S Health Edu. Rural

Political Clarity

Bankable revenue

model

Enabling

framework

Project pipeline

Implementation

bottlenecks

Expanding the PPP momentum in other sectors will be challenging



Challenges

Brownfield projects, Networks – Water, Slum renewal, Power distribution, urban

transport

Brownfield projects, Networks – Water, Slum renewal, Power distribution, urban

transport

Focus on service delivery, not just asset creation - Health, EducationFocus on service delivery, not just asset creation - Health, Education

Project owners are at State and city level - Understanding and acceptance variesProject owners are at State and city level - Understanding and acceptance varies

Substantially unviable sectors – Primary health and educationSubstantially unviable sectors – Primary health and education

Financing gaps in the domestic marketFinancing gaps in the domestic market



What should be the focus

Sector specific solutionsSector specific solutions

New models for service delivery, performance monitoringNew models for service delivery, performance monitoring

New financing products to plug the gapsNew financing products to plug the gaps

Blending plan programmes with private investmentBlending plan programmes with private investment

Engagement with States and cities to deepen the PPP penetrationEngagement with States and cities to deepen the PPP penetration

PPPs for performance, technology and scaling up, Not just for

financing

PPPs for performance, technology and scaling up, Not just for

financing



Thank You

[email protected]

[email protected]

+91 9833778822

S1_110930 PPP Presn_S.R Ramanujam

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