Public Private Participation in National               Highways    Focus: Role and Risks of Private Sector                ...
Definition• Mobilize private funds and focus public  funding in areas where private money cannot  be channeled
Need• Budgetary constraints• Managerial inefficiencies
Role PlayingGovernment                   Private SectorExpected to provide land     Expected to invest fundsfor the projec...
Graph: Growth of PPP’s in Roads over the years
Challenges• High initial investment• Long gestation period• Transfer of control rights over public assets to  private hand...
Model Concession Agreement• It is a policy and regulatory framework to  address issues important for limited recourse  fin...
Financial Viability of Highway Projects• Capital cost is the variable that will determine  the financial viability of a pr...
Policy Provisions  The policy essentially provides for two kinds of  contracts:• BOT Toll Contracts (BOT, BOOT, etc.)• BOT...
Risks faced by a Concessionaire•   Revenue Risk/Traffic Risk•   Force Majeure•   Environmental Risk•   Construction and O&...
Questions?THANK YOU!
Ppp in national highways   india
Upcoming SlideShare
Loading in …5
×

Ppp in national highways india

1,146 views

Published on

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,146
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
56
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide
  • This framework addresses the issues which are typically important for limited recourse financing of infrastructure projects, such as mitigation and unbundling of risks; allocation of risks and rewards; symmetry of obligations between the principal parties; precision and predictability of costsand obligations; reduction of transaction costs; force majeure; and termination. It also addresses other important concerns such as user protection, independent monitoring, dispute resolution and financial support from the Government
  • In the given scenario, higher the capital cost, greater would be the compulsion of project sponsors to seek larger grants
  • BOT Toll: concessionaire recovers investment by charging toll from usersBOT Annuity: concessionaire is assured a minimum return on his investment. Govt. bears the entire risk w.r.t. toll incomeSPV: formed by one or more entities esp. for one project. The govt. can be one such partner
  • Ppp in national highways india

    1. 1. Public Private Participation in National Highways Focus: Role and Risks of Private Sector Presented By: Rashi Saxena Priyanka Saklani MBA-Infrastructure
    2. 2. Definition• Mobilize private funds and focus public funding in areas where private money cannot be channeled
    3. 3. Need• Budgetary constraints• Managerial inefficiencies
    4. 4. Role PlayingGovernment Private SectorExpected to provide land Expected to invest fundsfor the project site, during the constructionregulatory clearances, and and maintenance phasesa concession right to the of infrastructure projectscontractor/ concessionaire
    5. 5. Graph: Growth of PPP’s in Roads over the years
    6. 6. Challenges• High initial investment• Long gestation period• Transfer of control rights over public assets to private hands• Risk allocation between public and private sectors
    7. 7. Model Concession Agreement• It is a policy and regulatory framework to address issues important for limited recourse financing of infrastructure projects• It also addresses other important concerns such as user protection, independent monitoring, dispute resolution and financial support from the Government.
    8. 8. Financial Viability of Highway Projects• Capital cost is the variable that will determine the financial viability of a project• Bidders would, therefore, seek appropriate capital grant/subsidy from the NHAI
    9. 9. Policy Provisions The policy essentially provides for two kinds of contracts:• BOT Toll Contracts (BOT, BOOT, etc.)• BOT Annuity Contracts• SPV Contracts
    10. 10. Risks faced by a Concessionaire• Revenue Risk/Traffic Risk• Force Majeure• Environmental Risk• Construction and O&M Risk• Financial Risk• Regulatory Risk/Political Risk
    11. 11. Questions?THANK YOU!

    ×