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IL&FS Infrastructure Development IL&FS Infrastructure Development
Corporation Ltd.Corporation Ltd.May 2008May 2008
A Presentation ByA Presentation By
Madhya Pradesh – Destination UnveiledMadhya Pradesh – Destination Unveiled
Possibilities of development of tourism Possibilities of development of tourism
project through PPP in MPproject through PPP in MP
In this presentation
1. Tourism in India
2. Tourism in Madhya Pradesh
3. Public Private Partnership ( PPP)
4. Project Development
5. About IL&FS
6. Project Development & Promotion Partnership PDPP
7. Select Success Stories
8. Conclusion
Tourism in India – Some Facts & Tourism in India – Some Facts & FiguresFigures
Tourism in India
JBIC ranked India as the fifth most attractive investment destinations.
Conde Nast Traveler, one of the world’s most celebrated travel magazines ranked India amongst the top tourist destinations of the world.
Tourism is one of the third largest net earner of foreign exchange for the country and also one of the sectors, which employs the largest number of manpower.
India has significant potential for becoming a major global tourist destination.
Tourism in India – Figures
0.8% share of world market
Tourists (2006) 4.6 million (International) 382 million (domestic)
Employment Direct - 10.7 million Indirect – 24.4 million
Export earnings ~ US $ 9.6 bn 2006
Contribution to GDP Direct 2% Overall 5.9%
FOREIGN EXCHANGE
Tourism is one of the third largest net earner of foreign exchange for the country (2001-02):
- Gem & Jewelry US$ 7.40 Bn.- Readymade Garments US$ 5.50 Bn.- Tourism US$ 3.30 Bn.
EMPLOYMENT
Every Rs.1 million ($25,000) invested creates…
• Tourism (directly) 47.5 Jobs• Tourism (indirectly) 89 Jobs
(sub-sector of hotels and restaurants, transportation etc.)
• Agriculture 44.6 Jobs• Manufacturing 12.6 Jobs
Tourism in India : Key Potential
•World class cultural and natural heritage tourism assets
•Multi-themed product development opportunities
•Strong global, regional and national tourism market growth prospects
•Strong potential to increase market share
•Potential to go beyond the 3 S’s of tourism – experience tourism
Tourism in India – Major concerns
Need – Make projects lucrative for private sector Investment
Approach & Connectivity
Lack of Proper Infrastructure
Lack of Information - Marketing
Mismatch between demand and supply
Poor availability of trained manpower (guides, hospitality)
. Regulatory issues – coordination between departments
Tourism in Madhya PradeshTourism in Madhya Pradesh
A Glimpse of Tourism in Madhya Pradesh
Kanha is the largest Wildlife Sanctuary in Asia
Kahjuraho has some of the most famous Sculptures in the world
Bhimbeteka is the oldest Cave Paintings in the world
Sanchi houses the oldest Buddhist Stupa in the world
9 national parks and 25 game sanctuaries out of which four are major tiger reserves.
Sacred rivers of Narmada, Tapti, Son and Kshipra have a string of religious places located on their banks.
Pachmarhi one of the most beautiful hill stations.
Tourist festivals displaying variety of folk and performing arts at Khajuraho, Orchha, Pachmarhi, Indore-Ujjain (Malwa) and Bhopal.
Kanha National Park
BhimbetekaKhajuraho Sanchi Pachmarhi
On the basis of the proximity of destinations and linkages between them, State Government has identified 4 major tourist circuits in the State:
Gwalior - Shivpuri - Orchha - Khajuraho
Indore - Ujjain - Maheshwar -
Omkareshware - Mandu Jabalpur - Bhedaghat - Mandla -
Kanha - Bandhavgarh Bhopal -Sanchi - Bhojpur - Bhimbetka
- Panchmarhi
Major Tourism Circuits
Attractions along key circuits
Heritage Tourism Gwalior, Orchha, Khajuraho,Sanchi, Mandu,Datia, Burhanpur etc
Pilgrim Tourism Ujjain, Maheshwar, Omkareshwar, Chitrakoot, Amarkantak, Sanchi, Orchha, Amarkantak etc.
Eco & Adventure Tourism
Pachmarhi, Kanha, Bandhavgarh, Panna, Satpura, Pench Valley National Parks, Tigra Lake (Gwalior), Upper Lake (Bhopal), Gandhi Sagar (Mandsaur) etc
Leisure & Business Tourism
Pachmarhi, Khajuraho, Bhopal, Gwalior, Indore, Mainpat, Tamia, Jabalpur etc.
Investment Requirements – Tourism Perspective Plan & ADB Study
PERIOD INVESTMENT REQUIREMENTS (RS. CRORE)
Short Term (1-5 years) 308.30
Medium Term (6-10 years) 185.55
Long Term (11-20 years) 484.48
Total (Rs. Crore) 978.33 (Rs. Crore)
Source : Tourism Perspective Plan, MoT
Source : ADB India Tourism Infrastructure Study, 2007
• MP has numerous tourist attractions. • Focus on positioning MP in the national & International media . • MP was awarded the National Tourism Award 2007-08.• Some of its recent initiatives include:
– Heritage Meet for heritage property owners– Carnival in ‘Tourist Hubs’– Integrated national media campaign
Initiatives Of Madhya Pradesh Tourism
Public Private Partnership ( PPP )
PPP Approach
Leverage Budgetary Resources Need to improve efficiency in service delivery
Need
PPP approach
Attract private investments for infrastructure projectsGoal
Attracts market investments Reduces cost to public sector Improves service delivery
Advantages
Private Sector contribution for: - Financial investments - Management practices - Efficiency in service delivery
Public Sector contribution limited to: - Financial gap funding - Providing institutional commitment to project
Why Public Private Partnership ?
“ PPPs enable the public sector to benefit from commercial
dynamism, the ability to raise finances in an environment of
budgetary restrictions, innovation and efficiencies, harnessed
through the introduction of private sector investors who
contribute their own capital, skills and experience ”
Acceleration of Infrastructure Provision Faster Implementation Value for Money Partnership Building Enhanced Public Management Genuine Risk Transfer Output Specification Asset Performance & Reduced Costs Performance-Related Reward Private Investment Promotion Improved Quality of Service
Advantages of PPP
In Short, The Key Objective:
Government Private Sector
Partnership
Investments that are economically & socially beneficial
Expanding the possibilities for efficient infrastructure provision
through ‘Public-Private Partnership’
Project Development – A step beyond consultancy
Challenge of PPP
Projects Capital
The Missing Link – Project Development
Project Development: What it is (1/2)
Project concept Technical & Financial Evaluation Statutory & Regulatory Approvals Approvals for various grants &
subsidies Development of various contracts Setting up of a Project Company
(SPV)
Project Development: What it is (2/2)
Vendor Development Interaction with FIs Bid Documents & Bid Process
Management Selection of Operator Facilitation for financial closure Hand holding during
implementation
Project Development: What it is not
Construction and operation of a project: That is to be done by the selected
bidder Mechanism leading to
privatization
Project Development: Why To mitigate technical and financial risks by
association of expert bodies To manage bottlenecks related to approvals To obtain best value of the project for the
state To minimize the implementation time for a
project To leverage resources of government:PPP PPP leads to building up of capacity of local
people
Project Development: What it needs
A project anchor like State Government A project development agency A project development fund
1-3% of the project cost and To be recovered from the successful bidder
Upfront finalization of legal agreements and bidding criteria by the project anchor
Project Development and Promotion Partnership (PDPP)
PDPP Arrangement
Key Features Partnership for development with State Governments Hands on mode of operations Sharing of Risks and Rewards (result-oriented) Mixture of Govt. approach & Private efficiency
Key objectives Need assessment for development Integrated development Public Private Partnership
Leveraging limited public resources with private investments
Bringing in private sector efficiency and management skills
PDPP Approach
Identification of key development needs & potential projects
Integrated Development through Project Development Phased implementation
Potential benefits to be staggered 6-12 m, 1-3 years, more than 3 years
About IL&FS Infrastructure Development About IL&FS Infrastructure Development Corporation Corporation
Genesis
Mandate: Commercialization of infrastructure projects Value added financial services
Initial JV format: Central Bank of India (CBI) Unit Trust of India (UTI) Housing Development Finance Company Limited
(HDFC)
IL&FS formally commenced business in 1988
Name %Government Shareholding
-Life Insurance Corporation OF India 26.98 Central Bank of India 9.18 State Bank of India 7.68 Abhu Dhabi Investment Authority 12.73
Sub-total 56.57
Private Shareholding Housing Development Finance Corporation 13.10 ORIX Corporation, Japan 23.82 IL&FS Employees Welfare Trust 6.51
Sub-total 43.43
TOTAL 100.00
Current Shareholding
IL&FS Infrastructure Development. Corp. Ltd. (IL&FS IDC)
100% subsidiary of IL&FS
Project Development Advisory arm
More than 200 professionals
Executing Project Development Mandates in ~ 20 states
IL&FS / IIDC provides Complete Process and Programme Management from the ‘Concept’ Stage to ‘Implementation’
We are ‘Project Developers’ & not just Consultants
Sectoral Expertise
Power Water Special Economic Zones
Telecom Sanitation Solid Waste Mgt
Ports Sewerage Environment
Airports Urban Infrastructure Rehabilitation of Assets
Roads & Bridges Health E Governance
Tourism Education Municipal Finance
In each sector, IL&FS has established specific replicable, stand alone, prototypes
Representative Government Partnerships
Government of India (Ministries)
Commerce Textiles Information Technology
Central Public Sector Undertaking
ONGC Coal India Limited MMTC
State Governments
Tripura Assam Nagaland Uttranchal Jharkhand Chattisgarh Tamil Nadu Andhra Pradesh Kerala Karnataka Orissa Madhya Pradesh Maharashtra Gujarat Rajasthan
IL&FS IDC has offices at:Mahindra Towers, New Delhi(corporate head office)Front offices at:Jaipur, Raipur, Patna, Guwahati,Calcutta,Ahmedabad, Mumbai,Bhopal, Vadodara, Rajkot,Shimla, Ranchi, Tirupur,Bhubaneshwar, Banagalore, Hyderabad, Chennai, Chandigarh,Dehradun,Thiruvanthapuram, & Kathmandu (Nepal)
Delhi
Mumbai
Chennai
Kolkata
Hyderabad
Ahmedabad
Bangalore
Bhopal
Jaipur
Goa
Vadodara
Gangtok
Srinagar
Thiruvananthapuram
Belgaum
Agartala
Chandigarh
Raipur
Rajkot
Tirupur
Kota
Guwahati
Shimla
Patna
Ranchi
Bhubaneswar
DehradunKathmandu
Geographical spread
Select PDPP Arrangements Andhra Pradesh Assam Bodoland Territorial Council (BTC) Chhattisgarh Himachal Pradesh Jharkhand Kerala Orissa Punjab Tripura Uttaranchal Gujrat West Bengal Karnataka
Strengths of IL&FS IDC
Have several Success Stories to tell Experience in structuring projects in PPP formats Linkages with Major Private Sector Developers - Good
will in the market and confidence of industry in IL&FS Strong relationships with Central Government Associations with State Government clients Associations with Financial Institutions and multi
laterals Ability to draw upon diversified services from IL&FS
Group companies Ability to tie up and utilise local resources
Select Success Stories
Jal Mahal Integrated Tourism Project
Project Scope: Development of Jal Mahal and Mansagar Lake area into a sustainable, eco friendly tourism destination Including lake restoration, monument conservation and lake precincts development
Project Cost: Rs. 200 Crores
Concession agreement signed
Development of Tijara Fort
Project Scope: Development of tourism and hospitality facilities within Tijara Fort
Project Cost: Rs. 25.0 crores
Private Sector partner selected
Albert Hall Museum: O&M
The Project: restoration and conservation of the Museum
building and conservation and documentation of the antiquities contained therein.
PSP to co-finance the facilities and O&M Govt of Rajasthan would continue to hold the
museum inventory on its books.
Lakes’ Restoration and Management
GoR has identified 5 lakes for undertaking Detailed studies: Nakki – Mt. Abu Fatehsagar, Pichola
– Udaipur Annasagar – Ajmer Sarovar - Pushkar
Conservation of Quila Nabha Quila is 18th century historical fort
located in the heart of the walled city of Nabha, Punjab.
Unsolicited Proposal received from Nabha Foundation, a Trust incorporated by Khemka Family
Project structured on Swiss Challenge
Restoration and Conservation of Quila Complex and Reuse as the Business School
Lease Period : 66 years Minimum Investment for
Restoration : Rs 15 Cr
Rajinder Kothi
Redevelopment of Rajinder Kothi at Patiala in Punjab as Heritage Hotel Restoration and Conservation
of the Property Reuse of Property as
Heritage Hotel Lease Period : 30 years Nimrana Hotels Pvt Limited
selected as concessionaire through competitive bidding
Agartala Budget Hotel: Milestones
Land Allotment from GoT
Roots Corporation Limited set up “Ginger” Hotel.
Project Started Commercial Operation from 21st August, 2007.
NEC Grant of Rs. 9 million through State Government as Viability Gap Funding. Already released to Roots Corporation.
1st hotel project promoted by reputed
Hospitality chain in the NER
Guwahati Budget Hotel: Milestones
Land Identification & Allotment Roots Corporation agreed to set up
“Ginger” Hotel. Agreement signed with GoA in January 07. Project construction started – foundation
completed. Hotel to be commissioned by October
2009.
Tezpur Budget Hotel: Milestones
Feasibility Studies completed Land Identification & Allotment Sarovar Group agreed to set up three
star category hotel in Management Contract.
Developer identified - Mentok RI Projects Pvt. Ltd has tied up with Sarovar.
Hotel to be commissioned in 24 months.
Crowborrough Hotel: Milestones
Mandate received from MTDC Feasibility Studies Completed Project Structuring – approved by
GoM/MTDC Bid Process Management
completed Private Developer selected. However the 3rd highest
bidder went to court and presently the matter is subjudice
Budget Hotel at Dimapur
GoN has given mandate for conversion of existing Dimapur Tourist Lodge into a Hotel & Commercial Complex.
Feasibility Study Completed. Project Structuring in process Bid Documents approved by GoN. Awating clearace of part land with
Indian Airlines
Solang Nala Ropeway Project
Project Size: Rs 1200 mio Project links Solang to Manali Passenger Ropeway with provisions ski accessories
Restaurants at Lower and Upper Terminal Points. Upgradation of existing Bar Lift Preparation of Ski slopes Establishment of Ski-centre Area Management including Environment Management
IIDC partnered with Himachal Govt. to identify developer.
Agreements signed with Govt. realising higher share of revenues
from project compared to suo moto bid received initially
International Convention Center, Hyderabad
Hyderabad International Convention Center Project developed by IL&FS IDC is operational since January 2006 Developer: Emaar Properties PJSC, Dubai
Convention and Exhibition- 3,000+ paxBusiness hotel- 300 room A residential community encompassed around a 18 hole world-class golf course
Implementation by 2 SPVs through a Private Sector Developer
Project Cost : Rs. 308 Crore
Role of IL&FS IDC: Comprehensive Project Development advisory to GoAP
International Convention Center, Thiruvananthapuram
Status - At award stage: Preferred bidder has been identified (July 2006)
Project Structure Convention Center-1500 pax plenary, 500 pax hi-
tech hall, Exhibition spaces Hotel/Resort/Service Apartment- 150 rooms Retail space/Theme Park- upto 7000 sq.m. Implementation by a private sector led SPV with
equity holding by Government of Kerala Project Cost: Rs. 140 Crore Role of IIDC: Comprehensive Project Development
advisory services to GoK
Conclusion
Conclusions
Need to develop tourism infrastructure PPP is the best mode PDPP and Project Development are the
tools for converting projects from paper to ground
Government’s role should be limited to providing land, regulatory issues to avoid over exposure and exploitation
This approach has financial benefits as well as improvement in the service sector
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