Synopsis

Submitted by

Sumit Chauhan
25 Sep 2012

PROJECT SEMINAR - 02

CRITICAL FACTORS FOR SUCCESSFUL APPLICATION OF PPP IN REAL ESTATE

SEMINAR GUIDE

Prof. YOGESH TYAGI

Synopsis Critical Factors for Successful Application of PPP in Real Estate

Contents
1. 2. 3. 4. 5. 6. 7. 8. INTRODUCTION ...................................................................................................... 2 NEED ...................................................................................................................... 3 AIM ........................................................................................................................ 4 OBJECTIVE .............................................................................................................. 4 OUTCOME............................................................................................................... 4 METHODOLOGY ...................................................................................................... 5 CHAPTERISATION .................................................................................................... 6 REFERENCES............................................................................................................ 7

Submitted by | Sumit Chauhan 1

Synopsis Critical Factors for Successful Application of PPP in Real Estate

1. INTRODUCTION
1.1 Public Private Partnership
Public Private Partnership means an arrangement between a government/statutory entity / government owned entity on one side and a private sector entity on the other, for the provision of public assets and/or public services, through investments being made and/or management being undertaken by the private sector entity, for a specified period of time, where there is well defined allocation of risk between the private sector and the public entity and the private entity receives performance linked payments that conform (or are benchmarked) to specified and predetermined performance standards, measurable by the public entity or its representative. www.pppinindia.com The term publicprivate partnership describes a range of possible relationships among public and private entities in the context of infrastructure and other services. Other terms used for this type of activity include private sector participation (PSP) and privatization. While the three terms have often been used interchangeably, there are differences. The public partners in a PPP are government entities, including ministries, departments, municipalities, or state-owned enterprises. The private partners can be national or international and may include businesses or investors with technical or financial expertise relevant to the project. Privatization involves the sale of shares or ownership in a company or the sale of operating assets or services owned by the public sector. Sectors in which PPPs have been completed worldwide include: Commercial complexes IT parks Hotels Housing

1.2 Real Estate

Real estate is one of the fastest growing sectors in India. Market analysis pegs returns from realty in India at an average of 14% annually with a tremendous upsurge in commercial sector. Further, the housing sector has been growing at an average of 34% annually, while the hospitality industry witnessed a growth of 10-15% last year.

Submitted by | Sumit Chauhan 2

Synopsis Critical Factors for Successful Application of PPP in Real Estate

In developing India, we are faced with the problems of infrastructure and shelter to accommodate growing population in the urban areas. As per Governments own estimates, there is a shortage of more than 25 million houses mostly in Low Income Group Category which will increase the need of the supporting infrastructure. This shortage is growing despite best efforts by the Government and the private sector. Problem of this magnitude cannot be handled either by Government or by Private Sector independently. Public-Private Partnership (PPP) is right approach to address this problem. Public-Private Partnerships (PPPs) is seen as a solution for producing high quality and cost effective real estate product delivery. PPPs enable the public sector benefits from the private sector i.e. the ability to raise finances in an environment of budgetary restrictions, innovations and efficiencies, harnessed through the introduction of private sector investors who contribute their own capital, management, skills, experience and technology.

1.3 Critical Factors for Successful Implementation of PPP

Critical Success Factors can be defined as those few key areas of an activity due to which desired results are achieved. Project identification, stable political & economic situations, available financing market, selection of suitable sub-contractors, management control or good governance, innovative technical solutions, innovation in financing methods of the consortium, stable macro-economic environment, strong monitoring & evaluation system, feasibility study/cost-benefit analysis, and effective risk allocation are all regarded as critical factors for the success of PPP projects.

2. NEED
Recent years have seen a marked increase in coordination between the public and private Sectors. PPPs have demonstrated the ability to harness additional financial resources, management, experience, skills, latest technology and operating efficiencies inherent to the private sector. Some merits of the Public-Private Partnerships Finance Management Experience Skills Technology

Submitted by | Sumit Chauhan 3

Synopsis Critical Factors for Successful Application of PPP in Real Estate

The real estate sector is largely fragmented. The scope for the development of real estate is tremendous. But, the availability of funds or rather economical availability and use of fund is desired. To achieve this, Public Private Partnership is a desirable solution. There is a large scope of use of PPP Model in various areas of Real Estate sector, but the success of this lies in its correct way of implementation. There are many examples of PPP that had not gone as per the expectations. Generally the private sector makes more money than expected due to negligence. Therefore, there is a need to find out the best practices in use of PPP Model. This can only be done through detailed analytical and critical studies of existing and ongoing projects.

3. AIM To analyze the critical factors and propose a model for successful implementation of Public-Private Partnerships in Real Estate. 4. OBJECTIVE
4.1 To understand the use of PPP mode in Indian Real estate scenario. 4.2 To identify the factors necessary for implementation of PPP in real estate. 4.3 To analyze & review the critical factors necessary for successful implementation of PPP in real estate. 4.4 To propose a model keeping in mind the critical factors & hence increasing the success rate of PPP in real estate.

5. OUTCOME
5.1 Critical Factors for Successful Application of Public Private Partnerships in Real Estate. 5.2 Key Areas for more Effective Implementation of PPP in Real Estate. 5.3 A model for implementation of PPP in Real Estate.

Submitted by | Sumit Chauhan 4

Synopsis Critical Factors for Successful Application of PPP in Real Estate

6. METHODOLOGY

Submitted by | Sumit Chauhan 5

Synopsis Critical Factors for Successful Application of PPP in Real Estate

7. CHAPTERISATION
Chapter 01 - Introduction
It will cover introduction of the topic with the help of keywords & basic idea behind the Public Private Partnership & factors for implementation.

Chapter 02 - Literature review

This chapter will cover the review of the data collected from the various published journals, papers, books, websites, specific guides, thesis & seminars for the understanding of the topic.

Chapter 03 - Overview of Real Estate

This chapter will cover the present scenario in the Real Estate, Market Scenario, Policies, driving factors for different types of projects in Real Estate, & Key Trends for the understanding of the topic & its application for the topic.

Chapter 04 - Public Private Partnership & its Models

This chapter will cover the general definition of Public Private Partnership, Government Policies, Fundamental Qualities, characteristics, merits, demerits & its need in Real Estate Market. It will also discuss the various models in Public Private Partnership, methods of private participation, types of contracts & methods of concessions for the understanding & application of concepts.

Chapter 05 - Success Factors of a Public Private Partnership

This chapter will discuss the various factors that are required for the implementation of Public Private Partnership in a project and listing down them to find out the Critical Factors from the above listed factors.

Chapter 06 - Case Studies

This chapter will discuss the particular case studies & questionnaire survey for finding the factors that are critical for implementation of Public Private Partnership in a project.

Chapter 07 - Conclusions / Inferences

This chapter will cover the conclusion / inferences from the case reviews & questionnaire survey that will give the critical factors for the successful implementation of Public Private Partnership in Real Estate.

Submitted by | Sumit Chauhan 6

Synopsis Critical Factors for Successful Application of PPP in Real Estate

Chapter 08 - Proposal for a Successful Public Private Partnership

This chapter will cover the proposal of the critical factors responsible for successful implementation of Public Private Partnership in a project.

8. REFERENCES
8.1 Books E. R. Yescombe, - Provisions and Project Finance Public Private Partnerships: Principles of Policy & Finance E.S. Savas, - Privatization and Public Private Partnerships 8.2 Publications Ministry of Finance, Government of India (2010): Approach paper on Defining Public Private Partnerships 8.3 Thesis / Seminars Thesis by Prof. Yogesh Tyagi (BEM/455) 2010: Public Private Partnerships in Physical Infrastructure Services for Urban Development Thesis by T.S.Deepak (BEM/382) 2007: Financial Feasibility Study of Highway Projects on BOT basis Seminar by Mohammed Mustafa Ali (BEM/487) 2011: Real Estate Development Process 8.4 Research Papers & Articles Hardcastle, Akintoye & Li (School of the Built and Natural Environment, Glasgow Caledonian University, Scotland): Critical Success Factors for PPP / PFI projects in the UK Construction Industry A Factor Analysis Approach Henry Alinaitwe, Robert Ayesiga and Albert Rugumayo (College of Engineering, Design, Art and Technology, Makerere University, Uganda) : Success Factors for Implementation of Public Private Partnership in the Construction Industry in Uganda

Submitted by | Sumit Chauhan 7

Synopsis Critical Factors for Successful Application of PPP in Real Estate

8.5 Journals Ernst & Young (2008): Indian real estate-shifting gears K. Boyfield (2002): Private sector funding for Public sector Infrastructure Albert P.C. Chan, Patrick T.I. Lam (2008): Application of Public Private Partnership (PPP): First International Conference on Construction In Developing Countries 8.6 Websites www.workosaur.com/real-estate-industry-overview www.pppinindia.com www.planningcommission.com www.sezindia.nic.in

Submitted by | Sumit Chauhan 8