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Aparna Bhatia

Joint Director
Ministry of Finance
Government of India
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Encouraging PPPs….
Government  of  India  has  announced  several  policy 
initiatives  and  taken  measures  to  create  enabling 
framework for PPPs ….

y Planning for PPPs


y The bidding process and implementation
y Capacity Building
y Information/ knowledge sharing

The views expressed in this paper are the views of the authors and do not necessarily reflect the views or
policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
ADB does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any
consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.
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Planning….

PPPAC
y Public Private Partnership Appraisal Committee set up
y Procedure for appraisal of PPP projects notified
y Adoption of best practices encouraged
y Cross sectoral experiences used
y Time bound appraisal

Scheme for Financial Support to


PPPs
y Provides Funding in the form of grant to meet gap for making a PPP project
commercially viable
y Funding of upto 20% of Project Cost. If required, an additional 20% can be
made available by the sponsoring authority
y Empowered Institution /Committee set up for quick processing of cases
y Viability Gap Funding up to Rs.100 crore for each project sanctioned by
Empowered Institution
y Proposals up to Rs.200 crore sanctioned by Empowered Committee, and
y Amounts exceeding Rs.200 crore sanctioned by Empowered Committee
with approval of Finance Minister

y 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 projects
` IIFCL lends to public sector, PPP, or private sector.
Lending up to 20% of project cost
` IIFCL 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

India Infrastructure Project


Development Support - IIPDF
y IIPDF announced in the Union Budget for 2007-08
y A corpus of Rs.100 crore created in DEA
y The 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
y The IIPDF will be administered by the Empowered
Institution.
y 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…
y 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.
y It would not include expenses incurred by Sponsoring
Authority on its own staff
y 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 be
converted into grant

Panel of Transaction Advisers


y Panel of eleven Transaction Advisers, drawn up through
competitive bidding and technical short-listing.
y 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
y Panel applicants have already been assessed as capable of
providing transaction management services.
y 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
y Model Concession Agreements prepared / being prepared by
Planning Commission as templates for contract documentation
y Framework should be bankable, investor friendly; yet secure good value
for public money
y Institutionalise independent policy making, free of incumbent’s control
y Based on the principle that risks should be allocated to parties that are
best suited to manage them
y Reflect best practices
y Model RFQ document for pre-qualification of bidders issued
y Model RFP document being finalised.

Capacity Building
Programme
` PPP Cells set-up in States/ major infrastructure ministries
` Strengthening of the cells – TA programme
` Training 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
y To facilitate preparation of bankable PPP projects,
selected States and Central Ministries are being
provided for a period of 36 months with
y 1 Project Appraiser/Analyst/Financial analyst
y 1 MIS/Data Manager
y Panel of law firms on retainer basis
y Initially for 14 States and 8 Central Ministries

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

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PPP Projects‐ Process Support by DEA
Project Identification
¾Expert Support to the PPP
Preparation of Memorandum for Consideration (MFC)‫‏‬ Cells through PPP and MIS
consultants and legal advice
under ADB T. A.
Approval of the MFC and the Project by the
Government/Statutory Authority ¾Sector specific and Need
assessment workshops
Project development studies, including demand ¾Training of officers- short
assessment, environmental assessment, cost
estimates, risk management mechanism, and financial
term and long term courses
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structuring of the project ¾Exposure to best practices

Development of contractual structure and preparation ¾ Pre bid Grading of projects


of concession agreement and bid documents and risk valuation
¾ Transaction Advisers
Bidding process
¾IIPDF for project Development
Selection of Private Sector Investor/Developer Expenses
Signing of Concession/Contract Agreement ¾Online Toolkit and Manual

Monitoring performance and costs ¾ Viability Gap Funding


Scheme
Support for making infrastructure projects commercially
viable
Access to long term debt finance ¾ Finance through IIFCL
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