Economic Research institute for ASEAN and East Asia (ERIA)PPP
Framework WorkshopByAdil ZaidiAssociate Director, Government &
Transaction Advisory Services Ernst & Young Pvt Ltd, India PPP
Framework update arc!, "#$" Page " Agenda$% Introduction to PPP in
India"% Institutional &rame'or()Institutional structure &or
a**roval o& PPP *ro+ects)Time re,uired &or a**roval o&
*ro+ects)easures to strengt!en im*lementation ca*acity-% .!allenges
to /e addressed0% Initiatives under consideration to cataly1e PPP
*ro+ects2% Summary o& en!ancement o& PPP institutional
&rame'or(3% .ase studies4% .oncluding remar(s arc!, "#$" Page -
)India at *resent s*ends around 2 5 36 o& t!e GDP on
in&rastructure develo*ment, /ut aims to increase investments to
76 o& t!e GDP /y"#$0)Signi&icant unta**ed *otential in
e8governance, !ealt! & education sectors)InordertoensurePPP
modelsucceedsandattract*rivateinvestors,Govt%o&India
!asdevelo*edvarious*olicies®ulatory&rame'or(saddressingrationalris(
allocation /et'een Pu/lic and Private sectorSource: Various
database, as of July 2011Less than S! "# mi$$ion%etween S! "#
mi$$ion to S! mi$$ion %etween mi$$ion to '## mi$$ion(ore than '##
mi$$ionInfrastructure pro)ision in India * +he stor, so far-.arc!,
"#$" Page 0 PPP the preferred mode for infrastructure
pro)ision)Government o& India, !as envisaged t!at a/out 2#
*ercent o& in&rastructure
investmentint!ecountryduringt!e$"t!&iveyear*lan9"#$"5"#$4:'ill
come &rom *rivate sector *rimarily t!roug! PPP route+ota$
estimated in)estment in infrastructure /, Pu/$ic 0 Pri)ate Sector
during "#'" * "#'1 2 S! '3#"# /i$$ion$#t! *lan 9actual: $$t! *lan
9estimated: $"t! *lan
9*ro+ected:#"##0##3##;##$###$"##$-;"3"2$#02$072$#Private investment
Pu/lic investmentInfrastructure investments across various five
year plan (in USD billion)Institutiona$ frameworkarc!, "#$" Page 3
)Pro+ect A**raisal Division, under Planning .ommission *rovides
inde*endent
a**raisalo&t!e*ro+ects'!ic!is&ollo'ed/ya**rovalo&t!e.a/inet
.ommittee on Economic A&&airs
9..EA:)..EA!assetu*adedicatedcommitteenamedasPu/licPrivate
Partners!i*A**raisal.ommittee9PPPA.:toeor a**raisal o& PPP
*ro+ects o& all sectors o& cost greater t!an @SD "# million
/ut less t!an @SD 2# million>or a**raisal o& *ro+ects
costing less t!an @SD "# millionPro5ect 6ostAppraisa$ agenc,@*to
@SD $ millionCelevant ministry@SD $ million /ut less t!an @SD 2
millionStanding >inance .ommittee 9S>.:% @SD 2 million and
a/ove /ut less t!an @SD "# millionEinance .ommittee
9E>.:Institutiona$ structure for appro)a$ of PPP
pro5ectsAdministrati)e (inistr,PPPA6Administrati)e
(inistr,SF66ommitteeAdministrati)e (inistr,SF6 7 EF6arc!, "#$" Page
; Stage Time Line$% Tec!nical &easi/ility study and its
a**roval0 to 3 mont!s"% A**roval o& *ro+ect structure and /id
*arameter $ mont!-% Pre*aration o& dra&t /id documents
com*rising o& C>D, C>P and .oncession Agreement$ mont!0%
In8 *rinci*le and &inal a**roval /y Pu/lic Private Partners!i*
A**raisal .ommittee9PPPA.: $%2 mont!s to "%2 mont!s 9i& t!e
documents are /ased on model documents, it may ta(e $%2 mont!s,
else u* to "%2 mont!s:2% Invitation o& t!e C>D and s!ort
listing $%2 to " mont!s3% Invitation o& t!e C>P and issue
o& letter o& a'ard " to "%2 mont!s4% Signing o& t!e
.oncession Agreement $ mont!;% >inancial closure @* to 3
mont!s+ime re8uired for procurement process for PPP pro5ects)PPP
*rocurement *rocess in India varies /ased on t!e *ro+ect si1e and
t!e sector 8larger and com*le< *ro+ects ta(e more time as
com*ared to smaller *ro+ects)Based on t!e trends so &ar, t!e
a**roval time can vary &rom one year to t'o and !al&
yearsarc!, "#$" Page 7 (easures to strengthen imp$ementation
capacit, ).a*acity Building)Esta/lis!ed "2 PPP cells in state and
national government de*artments)Aodal agencies at state and
national
level)Trainingand(no'ledges!aring'or(s!o*sacrossvariousde*artments'it!ADB
assistance)Cegulation)Inde*endent Cegulatory Aut!ority in most
o& t!e sectors= )Air*ort Economic Cegulatory Aut!ority 9AECA:,
)Tari&& Aut!ority &or a+or Ports 9TAP:, )Telecom
Cegulatory Aut!ority o& India 9TCAI:, ).entral Electricity
Cegulatory .ommission 9.EC.: etcarc!, "#$" Page $# (easures to
strengthen imp$ementation capacit, (contd-.) )Develo*ing s!el&
o& *ro+ects and &acilitating &inancing )Eia/ility Ga*
>unding 9EG>: sc!eme)India In&rastructure >inance
.om*any Limited 9II>.L:)India In&rastructure Pro+ect
Develo*ment >und 9IIPD>:)Standard transaction documents
&or eac! sector)Pre*aringmodel &ormats &or C>D,
C>P, .oncession Agreement)Increasing Su/8national government
involvement)State Su**ort Agreement &or getting state
involved)Su/8national governments to &und a *art o& EG>
in some casesarc!, "#$" Page $$ 6ha$$enges to /e addressed)In order
to attract more domestic and international *rivate &unding in
Indian In&rastructure, a more ro/ust regulatory environment,
'it! an Inde*endent Cegulator is essentialA/sence of independent
regu$ator)An online data /ase consisting o& all t!e *ro+ect
documents including &easi/ility re*orts , concession agreements
and status 'ill /e !el*&ul to all StateF.entral govt%
de*artments to ta(e lessonsLack of proper information for State
9o)ernment and $oca$ /odies)T!e limited Institutional ca*acity to
underta(e large and com*le< *ro+ects at various .entral
ministries and more im*ortantly at State and Local /odies level,
!inder t!e translation o& targets into *ro+ects% Lack of
Institutiona$ 6apacit, arc!, "#$" Page $" )T!e Pro+ect develo*ment
activities vi1, detailed &easi/ility, land ac,uisition,
environmentalF&orest clearances etc are not given ade,uate
im*ortance /y t!e .oncessioning Aut!orities% )T!e a/sence o&
ade,uate *ro+ect develo*ment /y aut!orities leads to lesser
interest /y Private sector, mis*ricing and successive delays at t!e
time o& erame'or( Legal Ena/lersSector Po$iciesE
