brief idea about the topic

1. MODULE 4 PPP PROJECT
MODULE 4: PPP PROJECT
PROCESS DEVELOPMENT

2. INTRODUCTION
¾ PPP Project Development Process enables:
¾ PPP Project Development Process enables:
| Appreciation of the process involved in project
development
| Understanding the sequence of activities in project
development
| U d t di th l d ibiliti f b th th
| Understanding the roles and responsibilities of both the
public entity and the private partner during the project
development process
| Familiarisation with the key issues and concerns that
arise in the project development process

3. VARIOUS STAGES IN THE PPP PROJECT
DEVELOPMENT LIFE CYCLE
Project
Identification Stage
•Expression of Needs
•Need Analysis
•Option Analysis
P f ibilit t di
Identification Stage
Module-3
•Pre-feasibility studies
Activities post
Identification
•Constitution of Project Management Team/Cell
•Stakeholder Consultation
•Hiring of Advisors/Consultants
Module-3
•Technical
Project Feasibility
Stage
•Technical
•Financial
•Value Proposition of Projects
•Economic
•Adherence to Legal compliance framework
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4. VARIOUS STAGEVARIOUS STAGES IN THE PPP
PROJECT DEVELOPMENT LIFE CYCLES IN THE PPP
PROJECT DEVELOPMENT LIFE CYCLE
Ri k A l i
Project Structuring
Stage
(Module-11)
•Risk Analysis
•Indicative Contractual Framework
Pre procurement
•Land Acquisition
•Shifting of Utilities
•Funding Agreements
A l d Cl
Pre-procurement
Activities
(Module-12)
•Approvals and Clearances
•Inter-departmental co-ordination
Bid Documentation
Stage
(Mmodule 14)
•Request for Qualification
•Request for Proposal
•Project Information Memorandum
•Draft Agreement
(Mmodule-14)

5. VARIOUS STAGES IN THE PPP PROJECT
DEVELOPMENT LIFE CYCLE
DEVELOPMENT LIFE CYCLE
• Competitive Procurement Strategy
Procurement Process
Stage
(Module-13)
• Single stage and two stage bid process
• Selection of private partner
(Module 13)
P t A d C t t
• Contract Management Framework
• Contract Management Team & Contract
Management Plan
K i P A d C
Post Award Contract
Management
(Module-13)
• Key stages in Post Award Contract
Management

6. PROJECT IDENTIFICATION STAGE
| Whether there is a pressing need for the project?
| Whether there is a pressing need for the project?
| Whether all possible service delivery options have
been considered for the project?
| What goes into a pre-feasibility study?

7. ACTIVITIES POST PROJECT IDENTIFICATION
ACTIVITIES POST PROJECT IDENTIFICATION
| Constitution of a Project Management Cell/ Unit/Team
| Stakeholder consultation
| Hiring of Transaction Advisors/ Consultants/ Experts,
etc.
| Obtaining preliminary approvals

8. PROJECT FEASIBILITY STAGE
| The project feasibility stage confirms the
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practicability of a project in terms of technical,
financial, legal and economic aspects, whether or not a
project is envisaged for development through the PPP
project is envisaged for development through the PPP
route. It is also at this stage that various project
structure options for development of the project
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emerge and the merits for development of the project
through an appropriate PPP framework is examined
(Value Proposition of projects analysis).
( p p j y )

9. PROJECT FEASIBILITY STAGE
•Whether the project is technically do-able?
•What are the alternative engineer/design options available for
development?
Technical
Feasibility
(Module-5)
development?
•What is the optimum engineer/design option?
•What is the cost associated with the optimum engineer/design option?
•What are the minimum service levels expected from the project?
(Module 5)
Financial
•Whether the project is feasible through PPP solely on the basis of return on
investment?
•Whether the project returns are attractive for the private sector to partner?
•What is the revenue the private partner could share with the government?
Financial
Feasibility
(Module-6)
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•Whether the project needs funding assistance from the government
(grant/annuity), and if so when and how much?

10. PROJECT FEASIBILITY STAGE
• Whether developing a project under PPP framework results in value
Valuation Proposition of
Project Analysis
(Module 7)
Whether developing a project under PPP framework results in value
to the public sector?
• Whether the bid submitted by the preferred bidder is acceptable to the
public entity thereby providing to the public sector?
• Whether or not to award the project to the preferred bidder?
(Module-7) Whether or not to award the project to the preferred bidder?
Economic Analysis
(Module-8)
• What is the net economic benefit of development of project to society?
Adherence to Legal
Compliance Framework
(Module-9)
• Whether the project/procurement process complies with the existing
legal and regulatory framework?

11. DECISIONS THAT EMERGE FROM VARIOUS
FEASIBILITY STUDIES:
FEASIBILITY STUDIES:

12. PROJECT STRUCTURING STAGE
| What are the risks associated with the project?
| How can the risks be best mitigated?
| How can the risks be best mitigated?
| Which are the parties can best handle the risk and at
what cost?
| How best can the risk be allocated among the parties?
| What should be the contractual framework for
i l t ti f j t?
implementation of project?
| What are the indicative roles and responsibilities of
the parties to the PPP agreement?
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| What are the key issues and concerns for project
implementation?

13. PRE-PROCUREMENT ACTIVITIES
| Land Acquisition and starting to move utilities.
| Funding Agreements
| Approvals and clearances
| Approvals and clearances
Ad i i t ti A l
| Administrative Approvals
| Inter-departmental co-ordination

14. BID DOCUMENTATION STAGE
| Notice Inviting Tenders
| Notice Inviting Tenders
| Request for Proposal
| Project Information Memorandum Docket
D ft A t
| Draft Agreement

15. PROCUREMENT PROCESS STAGE
| A procurement process which ensures transparency
and fairness in the selection process is the best type of
p yp
procurement. Usually, a competitive and transparent
procurement process will need to be adopted for the
selection of the private partner for the project
selection of the private partner for the project
development. The procurement process can either be a
single stage process or a two stage process.

16. POST AWARD CONTRACT MANAGEMENT
STAGE
| PPPs, while bringing in private capital and
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experience, also involve the transfer of valuable
public assets as well as foregoing future revenues in
the form of concessions To ensure that such
the form of concessions. To ensure that such
arrangements always enjoy high credibility in the
public mind, due diligence, transparency, objectivity
and probity in the entire decision making process are
all paramount if these arrangements are to succeed
and continue for future projects.
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17. ROLE OF COMMUNICATION
ROLE OF COMMUNICATION
| Communication among the various stakeholders
plays a significant role in the smooth development of
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projects from the identification stage to the post
award contract management stage. Communication
is necessary at the policy level and also at the project
is necessary at the policy level and also at the project
level. Unless all the stakeholders in a project are
brought within the confidence of the public entity,
i l i b diffi l Th f h ldi
implementation can be difficult. Therefore, holding
continuous and sincere interactions with all the
stakeholders is in the interests of the project.
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18. CAPACITY BUILDING REQUIREMENTS
CAPACITY BUILDING REQUIREMENTS
| Building capacities among the officials of the public
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entity and the private partner helps to make project
development, a relatively easier and smoother
experience It is useful for all the stakeholders
experience. It is useful for all the stakeholders
associated with project development to be aware and
familiar with the concepts and practices of PPPs.

19. INDICATIVE TIMELINES FOR PROJECT
DEVELOPMENT
Developing a PPP project can be categorized into two
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stages.
| Stage one is from project identification until the
l ti f i t t Thi t d l
selection of a private partner. This stage deals
largely with all the transactions that are key to
the selection of a private partner.
| Stage two is the actual project implementation
by the private partner which involves
construction operation and maintenance of the
construction, operation and maintenance of the
project assets to deliver the required services as
set out in the contract.

20. INDICATIVE TIMELINES FOR PROJECT
DEVELOPMENT
Key Stages
Years
Year1 Year2 Year3 Year4 Year5
Years
Identification,
Feasibility &
Feasibility &
Structuring
Tendering &
C i
Contracting
Financial Closure
Construction &
Commissioning
Commissioning

21. CONCLUSION
| The project development process discussed in this
module has been compiled on the basis of past
i f j t b i d l d d PPP
experience of projects being developed under PPP
framework. Every project proposed for development
under PPP framework would in an ideal scenario
follow the project development process steps
mentioned in the module. Each of the project
development steps takes the practitioner one step
development steps takes the practitioner one step
closer to effective development and implementation
of projects.

22. BIBLIOGRAPHY
| Module I: PPP Background, India: Developing Tool Kits
for Improving PPP Decision-Making Processes Toolkit
content, Draft, Economic Consulting Associates and
CRISIL Infrastructure Advisory, September 2010
| Module I: South African Regulations for PPPs, Public
Private Partnership Manual, National Treasury PPP
Unit, South Africa, 2004
| Module II - Analyse and Structure, PPP Advanced
Course, Knowledge Series, Training of Trainers
Curriculum, Department of Economic Affairs, Ministry of
Fi G t f I di D b 2010
Finance, Government of India, December 2010
| National Public Private Partnership Guidelines,
Infrastructure Australia, Australian Government,
D b 2008
December 2008

23. BIBLIOGRAPHY
BIBLIOGRAPHY
| National Public Private Partnership Policy Draft for
| National Public Private Partnership Policy, Draft for
Consultation, Department of Economic Affairs
Ministry of Finance, Government of India, 2011
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| PPP Manual for Nigeria, Infrastructure Concession
Regulatory Commission, Nigeria Infrastructure
Advisory Facility, Nigeria, 18 October 2011
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