Design Swiss Challenge Policy for Maharashtra Tourism Development Corporation- Government of Maharashtra

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Swiss Challenge Policy
March 2016

2. 1
▪ Initiation in spotting an unidentified need and provide
solution
▪ Bring in innovative processes, technology, finance &
expertise in execution. Encourage induction of novel
methods and promotion of unique solutions
▪ Invite private capital & efficiency by having open and
transparent process
▪ Provide financially sustainable solutions
▪ Augment public private partnerships in sectors/projects
which are not covered under current PPP framework
Why Swiss Challenge Method?

3. 2
▪ Identify priority sectors for Public Private Participation in MTDC so as to utilize the efficiencies,
innovativeness and flexibility of the private sector to provide better infrastructure and service at an
optimal cost
▪ To prepare a shelf of projects to be offered for PPP and take them forward with assistance of the
MTDC through a transparent selection process
▪ Putting in place an effective and efficient institutional mechanism to take up the project development
activities viz. project identification, preparation of DPRs, project structuring and bid process
management
▪ Provide necessary risk sharing framework in the project structure so as to assign risks to the entity
most suited to manage them
▪ Create a robust dispute redress mechanism/regulatory framework for PPP projects
▪ To provide a mechanism for MTDC contribution for projects those are intrinsically unviable
▪ To put in place an effective and efficient institutional mechanism for project implementation and
monitoring.
Objectives of Swiss Challenge

4. 3
Supreme court gives nod to Swiss Challenge method
SOURCE : Supremecourtcases, Government of India
Civil appeal number of 2009 (Arising out of SLP ( c ) Nos. 11229,11355-11356, 21754-
21755 & 21756-51757 of 2008)

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Supreme court gives nod to Swiss Challenge method
SOURCE : Supreme court cases, Government of India

6. 5
Supreme court gives nod to Swiss Challenge method
SOURCE : Supreme court cases, Government of India

7. 6
Supreme court gives nod to Swiss Challenge method
SOURCE : Supreme court cases, Government of India

8. 7
GR of Swiss Challenge method
Government of Maharashtra, Department of Industry, Energy & labour has issued GR Dt. 30 Oct. 2015
for procurement procedure in which one of the method of purchase is “Swiss Challenge Method”
SOURCE : GR, Government of Maharashtra

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GR for Swiss Challenge method
SOURCE : GR, Government of Maharashtra

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Process for implementing Swiss Challenge
1. Receive proposals
from different private
players (credible with
at least 10 years of
hospitality experience)
2. Evaluate proposal
(technical evaluation)
3. Seek financial proposal
from bidder with best
proposal
1. MTDC to publicize
different assets for
development purposes
2. Participants invited to
propose vision and
implementable ideas
for development
Step 2: Receive proposal
Step 1: MTDC to prepare
for Swiss Challenge
1. Setup Swiss Challenge
tender for the project
based on the “chosen”
project
2. Complete Swiss
Challenge project and
declare winner (based
on process outlined
before)
Step 3: Bid process
1. Initiate project work
(start meeting with all
stakeholders)
Step 4: Initiate the project
 MTDC will support with getting all necessary approvals
 Most approvals will be cleared before tender process

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“Swiss challenge” model would be ideal in this set-up as hospitality
business will require innovation and novel ideas
Swiss Challenge Model
1 Suo motu : on its own motion
Will
modify
the
tender as
per the
best bid
The
project
will be
given to
the next
bidder
Yes No
3
2
1
Proponent
Concerned
Authority
Other private
players
Right of
first
refusal
Key steps
Submission of Suo moto
proposal1 to concerned
authority, authority to provide
approval after examination of
the proposal
Open bidding will be done by
the concerned authority
inviting bids from other
private players
If competing bidder provides
the best financial offer,
proponent is given chance to
match the offer
1
2
3

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Eligibility criteria for sending a proposal
 Substantial experience in resort operation (Minimum 10 years of hospitality
experience – MTDC will decide nature of experience specific to property
location)
 Occupancy rates – minimum 60% across all categories
 Key management experience (minimum 10 years of resort operations
experience)
 Financial Strength (Will be evaluated on below parameters) depending upon
the property
 Net worth
 Turnover
 Credit rating
 Net profit margin /ROE/ ROA
 Viable project financials (NPV and IRR along with other project financials)

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Swiss Challenge Method: Prominent projects proposed/ongoing
Karnataka:
(Monorail project,
Bengaluru)
▪ Project proponent: Consortium of IL&FS, Scomi
Geodesic
▪ Stretch will be 16km
▪ Approximate project cost: ₹2,200 to ₹2,400 crores
Punjab:
(Personal rapid
transit system,
Amritsar)
▪ Project proponent: Fairwood
▪ Stretch will be 3.3 km connecting Golden temple
with 3 destinations
▪ Estimated cost: ₹500 crores
Madhya Pradesh:
(IT cloud
computing, Rural
BPO)
▪ 15 new centres in 3 years
▪ Total investment : ₹143 crores
▪ Total youth to be employed: 200 youth per centre
Kerala:
(500 MW
petroleum coke
based power
project, Kochi)
▪ Project proponent: Infrastructures Kerala Ltd. (Inkel)
▪ After expansion 1.5 mn tonnes of fuel will be
available
▪ Estimated cost : ₹12,000 crores
SOURCE : The Hindu, Infrastructure bulletin

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Proposed mechanism for driving Swiss challenge method
▪ Chief Secretory, Tourism,
Government of Maharashtra
▪ MD (MTDC)/Joint MD
▪ GM (Land & Estate Department)
▪ Chief Accounts Officer
▪ Chief legal
▪ Chief Works Department
Two steps vetting of projects – first MTDC committee and then State level Committee
First step - MTDC committee
▪ Chief Secretory Tourism, Government
of Maharashtra
▪ Chief Secretory Finance, Government
of Maharashtra
▪ Chief Secretory PWD, Government of
Maharashtra
▪ MD (MTDC)/Joint MD
Second step – State level
committee

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Revenue sharing details
▪ Bidder will have to pay either minimum revenue share or
“Minimum guaranteed amount” whichever is higher to
MTDC
▪ Minimum guaranteed amount is bidding parameter. Capital
expenses shall be borne by original project proponent/
successful counter bidder
▪ Minimum revenue sharing will be as follows:
0-3 years: 0%
4-6 years: 1%
7-9 years: 2%
10-25 years: 3%

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Assets for monetization (1/3) Resort
Land banks
Sr. No. Destination Type Area (In Sq meter)
1 Fardapur Resort 21,200
2 Velneshwar Resort 156,780
3 Chikhaldara Resort 30,400
4 Panshet Resort 16,400
5 Tuljapur Resort 24,000
6 Harihareshwar Resort 59,800
7 Ajanta T Junction Resort 8,794
8 Aurangabad Resort 9,629
9 Anudhya Nagnath Resort 8,094
10 Khindsey- Meghdoot Resort 23,500
11 Shegaon Resort 12,100
12 Washim Resort 62,600
13 Diveagar Resort 25,000
14 Titwala Resort1 48,600
15 Riddhapur Resort1 2,520
16 Gazipur Resort1 12,100
17 Narsi Namdev Resort1 8,094
18 Dajipur Resort1 63,300
19 Gaganbawda Resort1 54,800
20 Akloli Resort1 9,410
21 Khopoli Resort1 14,079
22 Manor Resort1 27,950
23 Panhala fort resort Resort1 12,748
24 Salbardi Open land 6,000
25 Kunkeshwar Open land /Resort under construction 5,000

17. 16Source: MTDC
Assets for monetization (2/3) Resort
Land banks
Potential for high end property
Sr. No. Destination Type Area (In Sq meter)
1 Bhandardara Resort 64,800
2 Ganpatipule Resort 190,450
3 Karla Resort 153,400
4 Tarkarli Resort 59,000
5 Shirdi Pilgrim Inn Resort 4,900
6 Malshej Ghat Resort 50,000
7 Matheran Resort 14,570
8 Mahableshwar Resort 60,703
9 Pimpaldari Open land 20,000
10 Navegaon Khairy Open land 30,000
11 Akkalpada Open land 8,000
12 Bordi 2
Open land (resort under
construction)
9,800
13 Akaluj
Open land (resort under
construction)
18,500
14 Kaundinyapur Open land 8,100
15 Lonar II Open land 20,000
16 Kashid Open land 8,000

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Assets for monetization (3/3)
Source: MTDC
Sr. No. Destination Type Area (In Sq meter)
1 Nivati (near Sindhdurg) Premium resort (open land) 17,400
2 Tadoba Premium resort (existing resort) 30,000
3 Mithbav (near Devgardh, Kokan) Premium resort (open land) 63,778
4 Sillari Premium boutique tents (open land) 5,900

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Thank you