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Aparna BhatiaJoint DirectorMinistry of FinanceGovernment of India

Encouraging PPPs….

Government  of  India  has  announced  several  policy initiatives  and  taken  measures  to  create  enabling framework for PPPs….

Planning for PPPsThe bidding process and implementationCapacity BuildingInformation/ knowledge sharing

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Planning….

PPPACPublic Private Partnership Appraisal Committee set upProcedure for appraisal of PPP projects notifiedAdoption of best practices encouragedCross sectoral experiences usedTime bound appraisal

Scheme for Financial Support to PPPs

Provides Funding in the form of grant to meet gap for making a PPP project commercially viableFunding of upto 20% of Project Cost. If required, an additional 20% can be made available by the sponsoring authorityEmpowered Institution /Committee set up for quick processing of cases

Viability Gap Funding up to Rs.100 crore for each project sanctioned by Empowered InstitutionProposals up to Rs.200 crore sanctioned by Empowered Committee, and Amounts exceeding Rs.200 crore sanctioned by Empowered Committeewith approval of Finance Minister

Eligible sectors: roads and bridges, railways, ports, power, urban transport, tourism, urban infrastructure; any other sector could be considered with prior approval

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India Infrastructure Finance Company Limited

Established to provide long term debt for financing infrastructure projectsIIFCL lends to public sector, PPP, or private sector. Lending up to 20% of project costIIFCL lending aimed at - Easing asset-liability mismatch of FIs through refinance;- Lowering Long term debt cost due to sovereign

guarantees- Setting benchmarks for market borrowings by other

organizations

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India Infrastructure Project Development Support - IIPDF

IIPDF announced in the Union Budget for 2007-08A corpus of Rs.100 crore created in DEAThe IIPDF will contribute up to 75% of the project development cost as an interest free loan. Balance 25% to be co-funded by sponsoring authority The IIPDF will be administered by the Empowered Institution. Proposals for assistance from the IIPDF will be sponsored by Central Government Ministries/Departments, State Governments, Municipal or Local Bodies, PSUs or any other statutory authority

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IIPDF…IIPDF available for PPP projects for meeting the project

development costs including for feasibility studies, legal reviews, environment impact studies, financial structuring, development of project documentation etc. It would not include expenses incurred by Sponsoring Authority on its own staff On successful completion of the bidding process, the project development expenditure would be recovered from the successful bidder. In the case of failure of bids, loan would beconverted into grant

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Panel of Transaction AdvisersPanel of eleven Transaction Advisers, drawn up through competitive bidding and technical short-listing.The panel facilitates provision of quality transaction management services from qualified firms having skills and experience to provide commercial/ financial and legal services for PPP transactions Panel applicants have already been assessed as capable of providing transaction management services.They can be appointed by the Sponsoring Authority on the basis of financial proposal against a defined scope of work.

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Bidding Process and Implementation

Model Concession Agreements prepared / being prepared by Planning Commission as templates for contract documentation

Framework should be bankable, investor friendly; yet secure good value for public money Institutionalise independent policy making, free of incumbent’s controlBased on the principle that risks should be allocated to parties that are best suited to manage themReflect best practices

Model RFQ document for pre-qualification of bidders issuedModel RFP document being finalised.

Capacity Building Programme

PPP Cells set-up in States/ major infrastructure ministriesStrengthening of the cells – TA programmeTraining courses and exposure programmes for public officials from across the country Framework being prepared for PPP training modules at LBSNAA/State institutes of public administration, in collaboration with leading management institutes Conferences/ workshops for experience sharing and exposure to best practices.

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Mainstreaming PPPs …Consultancy Services for PPP Cells

To facilitate preparation of bankable PPP projects, selected States and Central Ministries are being provided for a period of 36 months with

1 Project Appraiser/Analyst/Financial analyst 1 MIS/Data ManagerPanel of law firms on retainer basis

Initially for 14 States and 8 Central Ministries

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Information Dissemination

www.pppinindia.com launched as a virtual knowledge base on PPP projects, policies and best practicesDevelopment of a database on PPP projects-ready for launch Creation of ‘toolkit’ and manual for PPP project preparation

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Project Identification

Preparation of Memorandum for Consideration (MFC)‏

Approval of the MFC and the Project by the Government/Statutory Authority

Expert Support to the PPP Cells through PPP and MIS consultants and legal advice under ADB T. A.

Sector specific and Need assessment workshops

Training of officers- short term and long term courses

Exposure to best practices

Pre bid Grading of projects and risk valuation

Project development studies, including demand assessment, environmental assessment, cost

estimates, risk management mechanism, and financial structuring of the project

Development of contractual structure and preparation of concession agreement and bid documents

Bidding process

Selection of Private Sector Investor/Developer

Signing of Concession/Contract Agreement

Transaction Advisers

IIPDF for project Development Expenses

Online Toolkit and Manual

Monitoring performance and costs

Access to long term debt finance

Support for making infrastructure projects commercially viable

Viability Gap Funding Scheme

Finance through IIFCL

PPP Projects‐ Process

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Support by DEA

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