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Case studies of PPP for sustainable housing projects   (SEMINAR ‐II) 

 
Chapter 8: CASE STUDIES OF PPP FOR SUSTAINABLE HOUSING PROJECTS

8.1 General

The chapter deals with the case studies for Public Private Partnership and an attempt has been made
to understand the approach taken. The areas responsible for success of the venture have been
established. The financial arrangements and risk allocation strategies have been discussed. Finally
how the social and environmental issues have been addressed has been documented through the case
studies.

8.2 PCNTDA (Pimpri-Chinchwad New Town Development Authority) -


Development of Eco-Friendly and Affordable Township, Pune

8.2.1 Project Description:


Introduction: The Pune Metropolitan Region (PMR), comprising Pune and Pimpri Chinchwad
cities, is one of the fastest growing urban agglomerations in India. A major automobile and auto-
ancillary hub and a well-known international education destination, it also ranks among the top IT
destinations of India. Besides, the region has many industrial clusters housing industries like FMCG,
engineering, agro and bio-technology.

The Pimpri Chinchwad New Township Development Authority (PCNTDA), a key development
authority of the Pune Metropolitan Region, is responsible for the development of its peri-urban areas,
especially in its north. In line with the phenomenal growth of the region and its strident aspirations,
PCNTDA has envisioned the development of an integrated township at Sector 12 spanning 53
hectares. Given the success of the Public Private Partnership (PPP) model in involving private
participation for development, PCNDTA proposed to develop the integrated township on PPP basis.

Project Conceptualization and objectives:


In normal course, PCNTDA would have constructed housing units using 1 FSI through conventional
construction contracts; exposing itself to
• Cost overruns – escalations and variations
• Delayed decision making – time overruns
• Other issues like QA and QC for limited capacities within its system

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PPP as an Option: PCNTDA understood that the plot had good real estate potential to attract interest
from private sector. Hence by providing certain incentives through a viable PPP model, private
players can be roped in for the project.

Moreover the development authority (in accordance with the city development plan) had the
obligation of providing social housing under the BSUP scheme for slum eradication. There are total
72 slum pockets in Pimpri Chinchwad city area, out of which 9 slums are located in Pimpri
Chinchwad New Township Development Authority (PCNTDA) area on the Authority’s lands. All the
9 slums are proposed to be tackled for rehabilitation. The scheme envisages integrated Slum
Rehabilitation and Redevelopment to ensure full and complete rehabilitation of slums with security of
tenure, proper housing and amenities. Moreover, after resettlement of slums, the slum areas will be
denotified and the same will be put to designated use commensurate with the Development Plan of
PCNTDA.

In addition to this on the basis of Government of India’s previous approval, Pimpri-Chinchwad


Municipal Corporation (PCMC) has identified about 16000 EWS/Urban Poor families out of which
13250 families are proposed to be rehabilitated under already sanctioned BSUP scheme. The
remaining identified beneficiaries are proposed to be rehabilitated in this scheme.

Therefore, PCNTDA is desirous of implementing a housing scheme under BSUP under the PPP
framework. The Authority has identified land admeasuring about 53 hectaresin Sector 12 of Bhosari.
On the said land about 5000 slum dwellers from slums identified and beneficiaries that remain
uncovered under the previous BSUP scheme will be provided housing.

Expectations of PCNTDA from private developer


• Bring in project construction and management efficiencies
• Implement the project on a fast track basis
• Generate funds for PCNTDAs contribution for BSUP through exploitation of real estate
• Provide social and physical infrastructure towards integrated development
• All packaged in one contract to reduce the risk of exposure to multiple contracts and fine
tuning of cash flows between them

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Project Location and site: The Pimpri-Chinchwad New Township Development Authority
(PCNTDA) approves setting up of the first pilot project of eco-housing under the Jawaharlal Nehru
National Urban Renewal Mission (JNNURM) scheme on public private partnership (PPP) basis in
Sector 12, Bhosari Village, near Pune on 53 hectare (approx. 130 acres) land.

The site is locate in PMR (Pune


Metropolitan Region). The PMR is well
connected internationally through the Pune
international airport and new international
airport proposed at Chakan. The PMR is
part of the Golden Quadrilateral of India
and is linked through a state of the art
expressway with Mumbai the commercial
capital of India. It is few hours away from
India’s largest container port (JNPT) and
the Thane Belapur Industrial belt.

(Fig. F8 - A) Location Plan of the site at Sector 12, Bhosari

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Site Statistics:
• Area: 53 hectares
• Trapezoidal in shape with a frontage of about 800 meters on the Spine road
• Surrounded by a 20 meter arterial road
• Well developed by internal roads (6 meters) and with a proper laid water network including an
over head water tank facility

8.2.2 PPP Arrangement


The scheme will be implemented as follows:
• PCNTDA will be the Project Implementing Agency.
• CEO, PCNTDA, shall call Expressions of Interest (EOI) from eligible persons, developers,
companies etc. under this PPP scheme to develop the layout as per the guidelines of BSUP,
for constructing the dwelling units of 30 sq.mtr. carpet area.
• The selection of developer shall be done by a transparent process.
• If the FSI utilized in the project is less than 2.50, the balance FSI shall remain with the said
authority to be used for EWS/slum housing in the future in the same zone. PCNDTA will be
the Planning Authority for the same.
• The balance cost of the project i.e. a part of the state share and ULB share of the project cost
and any excess amount over and above resulting from cost escalation shall be met out from
the additional FSI i.e. 2.5.
• In case the developer offers any premium, it shall be obtained by PCNDTA in terms of extra
dwelling units so that these dwelling units shall be used either for rehabilitation of other slums
or for designing slum prevention schemes like rental housing or affordable housing.
• The proposal so received and on being found suitable shall be put up by the said authority for
Government’s approval along with the comments of State Level Nodal Agency (SLNA) i.e.
Maharashtra Housing & Area Development Authority (MHADA) on them.
• The selected developer will start the construction of the dwelling units and develop layout
including infrastructure and social amenities and funds would be released by PCNTDA in
stages as per the actual construction.
• After the completion of the construction, PCNDTA will take over the dwelling units and allot
them to eligible slum dwellers by following a clear and transparent procedure.

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PCNTDA (Pimpri Chinchwad New Town Development Authority) - Scope & Obligations:
Pimpri Chinchwad New Township Development Authority (PCNTDA) is one of the development
authorities of the Pune Metropolitan Region that is responsible for development of peri urban areas
towards the north of PMR. The PCNTDA was established in the year 1972 with a mandate to create
Pimpri Chinchwad New Town with well thought out goals and objectives. Towards this objective,
PCNTDA, since its inception, has been instrumental in developing urban housing and commercial
infrastructure for the rapidly growing population of the Pimpri Chinchwad city.

The PCNTDA was mandated by the Government of Maharashtra to develop about 43 sq kms to
house a population of about 5 lakh citizens. It has till date acquired and developed about 10.8 sq kms.
The area has been developed in sectors comprising of housing and commercial uses. The civic
amenities and urban infrastructure has been provided by the PCNTDA. The PCNTDA has been
actively perusing its goals of supporting urbanization of the peri urban areas and is now aspiring to
provide next generation urban amenities to its citizens.

PCNTDA’S Key obligations


• Payment of Grant of Rs. 225 crores as per schedule linked to handover schedule.
PCNTDA shall transfer the amount of grant sanctioned for developing these units under the
JNNURM scheme to the Developer. The remaining project cost of BSUP units shall be
financed by the Developer.
• As per the Development Control Regulations, the allowable Floor Space Index (FSI)
applicable on the project site is 1. But, recognizing the uniqueness and innovation of the
project concept, the Government of Maharashtra has granted a total special FSI of 2.5 for the
project.
• Accept BSUP Facilities/ Affordable Housing units on its completion; subject to quality
specifications as laid out in development agreement
• Transfer of Lease Rights in phases linked to construction milestones. PCNTDA shall
execute a lease deed for 99 years with the Developer for the remaining portion of the land.
The lease rights shall be granted to the Developer in phases, upon completion of milestones
as defined in the project agreement.
• Facilitate clearances of Govt. agencies on reasonable effort basis

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Developer (consortium comprising Mumbai-based D B Realty, Man Infrastructure and Ajwani
Developers) - Scope & Obligations:

• As per the transaction structure, the Developer shall construct 5,040 housing units under
Basic Services for Urban Poor (BSUP) scheme of JNNURM. The Developer has to
complete the BSUP units within 2 years and hand over to PCNTDA
• Master planning for the entire 53 hectares of land
• Development, construction and marketing of 7.951akh square meters of integrated real
estate space.
• The Developer shall construct affordable housing units as per pre specified specifications
and handover to PCNTDA free of cost.
• The Developer shall construct the physical and social Infrastructure of the integrated
township, thereby ensuring good roads, adequate water supply, an efficient sewerage system
as well as schools and hospitals.
• The project shall be developed in a manner that it has minimum possible impact on the
surrounding environment and is in harmony with nature. To this end, the Developer shall
undertake eco-friendly initiatives including rain water harvesting, use of solar power,
environment-friendly materials and vermicomposting.
• Upfront payment of Rs. 50 crores
• Submission of Performance Security of Rs. 100 crores

Selection of Developer:
Project development stages comprised of
• Market feasibility studies
• Project conceptualization
• DPRs for JNNURM
• PPP project structuring
• Drafting of development and lease agreements
• Transaction documentation; RFQ and RFP
• Managing the bid process

With the objective of undertaking this project on a PPP basis in a transparent and objective manner,
PCNTDA launched a three-cover Request for Proposal in June 2009.
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Assessment of technical and financial capabilities
• Detailed presentation of bidders to Evaluation Committee on master plan
• Committee comprising of Divisional Commissioner (Pune Division), Collector (Pune ) and
Commissioner PCMC
• Selection of successful bidder on an objective bidding parameter: The bidding parameter for
the project was the constructed "Carpet Area" in "square meters" of affordable housing units
that the bidder shall construct and hand over free of cost to PCNTDA. The specifications of
the affordable housing units to be handed over to PCNTDA were specified in the bid
documents.

The tender received a good response from a number of interested bidders. These were Tata Motors,
Mahendra Estates, Panchsheel (Pune) , a consortium comprising Vijay Associates (Wadhwa), Goel
Ganga and J Kumar Infrastructure and a consortium comprising Mumbai-based D B Realty, Man
Infrastructure and Ajwani Developers .

Of the total bidders, two bidders were judged as technically and financially capable and short-listed
for the final stage. The bidder with the highest constructed "Carpet Area' offered to PCNTDA was
selected as the Successful Bidder i.e DB realty, Man Infrastructure and Ajwani Developers. The
Successful Bidder quoted a constructed Carpet Area of l ,30,599 square meters of affordable
housing units to be handed over to PCNTDA. Thereby, PCNTDA derived
• 7,369 housing units (including 5,040 BSUP housing units + 2275 Affordable housing stock)
• A school and a hospital for the BSUP units
• A school and a hospital for the general public
• Development of public amenities

8.2.3 PPP Housing Model: Key features of the housing model are:
• PCNTDA would provide land for construction of houses for urban poor in PCMC area
• GOI would provide JNNURM grant for 5040 BSUP houses
• Developer gets additional FSI for the project
• The gap funding would be done by the PPP partner
• Extra premium to PCNTDA in terms of affordable housing stock over and above the BSUP
units.

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Stakeholders of the PPP Model
• PCNTDA (Pimpri Chinchwad New Town Development Authority)
• Government of India (through JNNURM)
• Government of Maharashtra
• Developer (consortium of D B Realty, Man Infrastructure and Ajwani Developers)
• Lending Institutions
• Consumers

Approaches for PPP in Housing used:


The eco-housing and integrated township being developed in Pune makes use of three suggested
approaches. These are:
1. Virtual Land Approach
2. Slum Rehabilitation Approach
3. Subsidy - Cross subsidy approach

1. Virtual Land Approach: The government provides land at prime location to attract interest of real
estate developers to bid for the project. The features synonymous to this housing approach present in
the model are:
• Provision of Land by the public entity
• Increase in FSI (from 1 to 2.5) in order to leverage potential of the given land parcel

2. Slum Rehabilitation Approach: The development authority (in accordance with the city
development plan) had the obligation of providing social housing under the BSUP scheme for slum
eradication. Using PPP as a toll to provide solution, they involved the Slum Rehabilitation Approach
of housing and aim at shifting the slum dwellers to a better surrounding with requisite amenities and
services in this integrated township. The features synonymous to this housing approach present in the
model are:
• Provision of BSUP units (under the JNNURM Scheme)
• Provision of grant (225 crores) for funding of the total development cost
• FSI relaxation and help in statuary clearances
• Denotification of previously encroached slum dwellings and land use conversion
commensuration with the City Development Plan

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Subsidy Cross-subsidy approach: The PPP model is a mix of cross subsidies provided by the public
entity to the developer in lieu of construction of prescribed stock and BSUP units. The features
synonymous to this housing approach present in the model are:
• Provision of land by the Government
• Government grant
• Allowable commercial exploitation of 25% of the land area
• Developer builds BSUP units and hands them over free of cost
• Extra premium given as affordable housing stock

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Schematic Section of the housing ( Fig. F8 - B)

Project outcome in terms of Sustainable Housing stock


Net Plot Area: 3.89 lakh sqm
Maximum Allowable FSI: 9.72 lakh sq m (FSI = 2.5)

BSUP Area (For 5040 EWS Dwelling Units: 1.76 lakh sqm)
Total FSI for PPP = 7.96 lakh sqm (9.72 lakh sqm - 1.76 Lakh sqm)
Bidding Parameter (Maximum Carpet Area of Affordable housing stock = 1.30 Lakh sqm)

FSI remaining with developer to be used in Residential Housing and Commercial Land use
7.96 Lakh sqm - 1.30 Lakh sqm = approx. 6.66 Lakh sqm)

(Table T8 - A) Showing distribution of housing units provided to PCNTDA

Type of housing unit created No. of units

BSUP housing 5040

Affordable housing [Carpet area 53 sqmtr] 1917

Affordable housing [Carpet area 73 sqmtr] 358


Total 7315
1 School and Hospital for BSUP
1 School and Hospital for general public
Other Infrastructure Physical infrastructure
Development of public amenities and reservations

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8.2.4 Financial Sustainability: The financial sustainability of the model is analyzed on the basis of
financial structure of the model. The contributions towards project finances from PCNTDA and
Developer Consortium are documented. Sample cash flows are then made to check whether the
inherent incentives in the PPP model are beneficial to both or not.

Contributions towards finances from PCNTDA:


• Availability of Prime Land
• 225 Crores grant (148 under JNNURM + 13 Crores from GOM + 75 Crores from
Beneficiaries)
• Increase in FSI helps generating more revenue for the developer
• Reduced Pre-operative expenses (like clearances and stamp duty exemptions)

(Table T8 - B) Showing financial benefits accruing to PCNTDA as part of the model

Description Amounts

Gap funding for BSUP by Developer (5040 housing Units


Rs 190 crs
+ physical and social infrastructure amounting 100 crs)

Upfront payment at time of signing of agreement Rs. 50 crs

Construction value of 1,30,599 sqmtr carpet area


Rs. 209 crs
(Affordable Housing Stock offered) @ Rs. 16,000 / sqmtr

Total value derived Rs. 449 crs

FSI available for developer for exploitation (after netting


6,45,391 sq mtr
out FSI for BSUP and Affordable stock units)

Rs. 6955/ sqmtr


Value offered per FSI
Rs. 646/ sqft

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Contributions towards finances from Developer:
• Equity funding for BSUP units
• Equity funding for physical and social infrastructure
• Equity funding for offered affordable housing stock
• 70% of total FSI remaining with Dveloper to be used for MIG/HIG housing
• Remaining for commercial exploitation
• Developer aims at generating profits of around 300 crs

Sample Cash Flow for Developer: An attempt has been made to generate spreadsheet that will
contain all the requisites of a cash flow statement minus the values for the PPP model. This means
that all the financial support and incentives in the PPP models suggested earlier, shall be documented
in the sample cash flow and it shall be observed how the value of the revenue stream is increased,
while on the same hand the expenditures are reduced. (Refer to Table T8 - C)

8.2.5 Risk Identification, Allocation and Mitigation: A framework enlisting all the risks that may
affect the housing project has been drawn. The risk identification, allocation and risk mitigation
strategies as per the PCNTDA model have been discussed. The Risk framework has been divided
according to the phase of construction in the housing project. (Refer to Table T8 - D)

8.2.6 Social and Environmental Sustainability:


Clearly the model is an attempt to achieve both social as well as environmental sustainability by
striving to provide housing to all the sections of the society. An attempt has been made to provide all
sections with similar amenities thereby discouraging social segregation. The model aims at
eradicating slums under the BSUP scheme. On the environmental sustainability front, all efforts are
made to make the integrated township into Eco-friendly housing with provisions for i rain water
harvesting, use of solar power, environment-friendly materials and vermicomposting.

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8.3 Commonwealth Games Village, Delhi

8.3.1 Project Description:


Introduction: The work involves the development of residential project of Commonwealth Games
Village - 2010 in the heart of Delhi near akshardham temple on a PPP (Public Private Partnership
mode).

The Delhi Development Authority (DDA) has been assigned the role of development of the
Commonwealth Games Village, 2010. DDA has decided to develop a residential facility in the
village. This residential facility would be used by the organizing committee for Commonwealth
Games, 2010. The developer for the project is Emaar MGF

Project Location and site


The Games Village area is being planned to
comprise of approximately 11 hectares of land for
residential use, and 5.5 hectares for
Hotel/Commercial use. The 11 hectares site is off
National Highway-24, Noida Mor, Adjacent to
Akshardham Temple, in close proximity to the
Central Business District. There is over 30 hectares
of adjoining green / recreational area with a
proposed golf Course next-door with a view of
River Yamuna. The apartments are required to be
used for accommodation of about 8,000
international participants during the Games Period,
largely on a twin sharing basis.
(Fig. F8 - C) Location plan of Commonwealth Games Village
Project Development Controls
1. Land area - 11 hectares
2. Maximum Floor Area Ratio (FAR) - 200
3. Maximum Ground Coverage - 33.3%
4. Maximum Height - Subject to clearance from AAI/Fire Department and other statutory bodies.
Further, the height should not exceed the height of highest dome of the Akshardham Temple (43 m).

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5. Parking - Minimum 2 Equivalent Car Space (ECS) / 100sq.m. floor area, with minimum space
standards as follows:
• Open — 23sq.m. per ECS
• Ground floor covered- 28sq.m. per ECS
• Basement - 32sq.m per ECS
• Multi-level with ramps - 30sq.m. per ECS
• Automated multi-level with lifts - 16sq.m. with ECS
6. Density - Provisions of density norms shall not be applicable if approval from the concerned
authority is obtained by DDA
7. Additional floor area up to a maximum of 400sq.m. shall be allowed to cater to community needs
such as community. / recreational hall, creche, library, reading room and society office. In addition to
the above, 100sq.m. area shall be permissible for Senior Citizen Recreation Room..
8. Community Service Personnel/ EWS and Lower Category norms are not applicable for this
Project, since equivalent Units thereof shall be provided by DDA
9. Stilts: If the building is constructed with stilt area of rion- habitable height and is proposed to be
used for parking, landscaping etc. the stilt floor need not be included in FAR and shall be counted
towards height.
10. Basement(s), if constructed, and" used only for parking, utilities and services shall not be counted
towards FAR.
11. Total Number of Towers: 34
12. Total Number of flats: 1168
13. Project Start: 14.09.2007
14. Project End: 31.03.2010
15. Basement(s) up to the setback line equivalent to parking and services requirement such as
installation of electrical & fire fighting equipments & other services required for the building with
prior approval of the concerned agencies could be permitted and not be counted in the FAR. However
the area provided for the services should not exceed 10% of the total basement area or 30% of one
basement whichever is higher.
16. Wherever parking is required to be earmarked within the plot / basement, in case of misuse, the
same is liable to municipalisation / taken over by the authority.

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Common Facilities:
The Project Developer shall develop the following facilities integrated with other services of the
Residential Facility.
a) One (1) Convenience Shopping of 1,000sq.m.
b) Totlots aggregating to 2500sq.m., each being at least 125sq.m.
c) One (1) Housing area Park of 5000sq.m.
d) One (1) Housing area Play ground of 5000sq.m.
e) Two (2) Angawaris of 200-300sq.m. each
f) Milk Booth as per standard design of the concerned Department
g) All other developmental controls of MPD-2021 shall be applicable including

Accommodation Requirements:
• Bedroom Size- minimum of 12 sq.m. carpet area
• Minimum 4000 bedrooms
• Each room independent of the other rooms
• Each bedroom to be air-conditioned
• Fixtures for People with disability to be provided (in minimum of 5% of total units)
• All units to be complete and ready to use, with availability of water, sewerage, drainage,
electricity etc.
• Living Space should be minimum of 7.5 sq.m. carpet area per bedroom of that unit.

8.3.2 PPP Arrangement


Salient features of the PPP arrangement:
• The entire Residential Facility needs to be developed and made available for the common
wealth Games 2010.
• The Residential Facility on the Project Site including all the open areas (“Residential
Facility”) shall be used by OC during the Commonwealth Games, 2010 for a period of around
seven (7) months (“Games Period”). The Games Period will comprise four (4) months period
prior to the Games, the period of Games and two (2) months post-Games. Except as permitted
by the Monitoring Committee, no activity by the Project Developer or any of its sub-
contractors shall be allowed in the entire premise during the Games Period.
• The Project Developer will be allowed to identify potential buyers and receive consideration
for its share of Residential Apartments before the Games and after Project Developer’s share
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of Residential Apartments have been identified and allocated in accordance with Clause 2.1(b)
as mentioned in role of DDA above.
• DDA shall transfer the land underneath the 50% of the developed Residential Apartments (i.e.
50% of the dwelling units only excluding all other facilities, for e.g. commercial, institutional)
to be identified for transfer to the Project Developer, for onward transfer to the individual
buyers by the Project Developer in accordance with the terms, conditions and covenants
contained in the RFP document, the Project Development Agreement and the Conveyance
Deed, to be executed by DDA after completion of the Project and post the Games Period. The
Project Developer shall agree to sign the Conveyance Deed in the format provided by DDA
• DDA will sell-off its share of Residential Apartments only Post-Games.
• The possession of the Residential Apartments would be given to the allottees/ lessees only
after the Games Period.

DDA (Delhi Development Authority) - Scope & Obligations:


The Delhi Development Authority was created in 1957 under the provisions of the Delhi
Development Act "to promote and secure the development of Delhi ". DDA has played a vital role in
the orderly-yet-rapid development of Delhi. The city has become the residence of choice for more
than 11 million people and this number continues to increase. The Charter of DDA, as ratified by the
Act of 1957, lists the objectives of the Authority as:

a. To formulate a Master Plan for covering the present and future growth of Delhi and to
promote and secure the development of Delhi according to the plan covering all the possible
activities.
b. To acquire, hold, manage and dispose of land and other property.
c. To carry out building, engineering, mining and other operations and, to provide services and
amenities.

Roles and Responsibilities:


• DDA will issue a Letter of Intent to the successful Bidder. If for any reason, DDA is unable to
sign the Project Development Agreement with the successful Bidder, the Bidder with the next
highest financial bid may, at the option of DDA, be declared successful, in case he matches
the financial bid of the highest financial Bidder.

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ƒ DDA shall transfer the land underneath the 50%of the developed Residential Apartments (i.e.
50% of the dwelling units only excluding all other facilities, for eg. commercial, institutional)
to be identified for transfer to the Project Developer, for onward transfer to the individual
buyers by the Project Developer in accordance with the terms, conditions and covenants
contained in this RFP document, the Project Development Agreement and the Conveyance
Deed, to be executed by DDA after completion of the Project and post the Games Period
ƒ DDA shall allocate the Project Developer’s 50% share of the Residential Apartments on the
basis of lottery drawn by the Monitoring Committee in the presence of representatives of
DDA and the Project Developer within 9 months from the date of signing of Project
Development Agreement,
ƒ DDA proposes to hold a Pre-Bid Conference on the date specified to discuss the issues related
to the Project with the Bidders. DDA at its sole discretion may also hold further discussions
with the Bidders to finalize the technical/commercial parameters and other related issues for
the Project, before submission of the Proposals, which would be common for all the Bidders
ƒ DDA, at its discretion, may respond to queries submitted by the Pre-Bid Conference attendees
after the date of the Pre-Bid Conference. Such response(s) shall be posted on the DDA
website.
ƒ DDA will promptly release all Bid Securities in the event DDA decides to terminate the
Bidding proceedings or abandon the Project within seven (7) days of such notification. For
any delay beyond the aforementioned period of seven (7) days, DDA shall be liable to pay
interest at the rate of seven percent (7%) per annum.
ƒ DDA shall reject any Proposal, which does not include the Bid Security.
ƒ Monitoring Committee shall consist of 1 (one) representative each appointed by DDA and the
Project Developer and an “Independent Engineer”, who would be any person or agency
appointed mutually by the representatives of DDA and the Project Developer in the
Monitoring Committee for the purposes mentioned in the RFP and the Project Development
Agreement. DDA shall bear the expenses for its representative and the Project Developer shall
bear the expenses for its representative

Emaar MGF - Scope & Obligations:


Emaar MGF Land Limited, one of India’s leading real estate developers is a joint venture between
MGF Developments Limited and Emaar Properties PJSC (“Emaar”) of Dubai. Emaar is one of the

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world’s foremost real estate companies with operations in 16 countries. MGF has over the last 10
years established itself as one of the key players in retail real estate development in India.

The Company commenced operations in India in February 2005. Its primary business is development
of properties in residential, commercial, retail and hospitality sectors. In addition, it has also
identified healthcare, education and infrastructure as business lines for future growth. Its operations
span across various aspects of real estate development, such as land identification and acquisition,
project planning, designing, marketing and execution.

Liability/Responsibilities of Developer as per RFP / Agreement:

ƒ The Project Developer shall undertake to develop the Project Site and construct such capacity
of residential accommodation and meeting such specifications and requirements as are
specified
ƒ The Project Developer shall adhere to the Project Milestones within the timelines as specified
ƒ Monthly reports on the progress of the Project shall be prepared by the Independent Engineer
based on the reports submitted by the Project Developer and submitted to DDA/ Monitoring
Committee.
ƒ In case of any sub-contracting by the Project Developer, the Project Developer is liable to
notify the same to DDA in writing within 7 days of such sub-contracting. In case of any
objection to such sub-contracting by DDA, DDA shall intimate the Project Developer within 7
ƒ The Project Developer shall completely develop the Project by April 1, 2010. The date of
completion of the Project will be deemed to be the date when all Residential Apartments are
completely developed and are technically fit to be occupied including all other associated
facilities and amenities and a completion/ occupancy certificate in this regard has been
obtained NDMC/ MCD and DDA.
ƒ The Project Developer shall handover the Residential Facility to DDA at the commencement
of the Games Period. Furnishing, fixtures and furniture specified in schedule shall be
provided by DDA at their own expense and risk and these will be removed/ disposed by them
after the Games. The Project Developer will allow/coordinate with DDA in removing such
furnishings, fixtures and fitting and provide all assistance to DDA in this regard.
ƒ The Project Developer shall ensure full compliance with the provisions under all labor laws
and regulations

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ƒ The Project Developer shall pay an Upfront Payment to DDA as quoted by him in its
financial bid. The Reserve Price for the Upfront Bid Amount is Rs.300,00,00,000/-
(Rupees Three Hundred Crores Only).
9 Within 30 days of signing of this Agreement, for a period commencing from immediate
effect and ending on the date of Completion of the Project:
9 Professional Indemnity Insurance for Construction Design (Rs.10,00,00,000)
9 Professional Indemnity Insurance for Construction Supervisors (Rs.2,00,00,000)
Employer’s Liability Insurance (Rs.1,00,000 per person)
9 Construction Performance Bond (5% of the amount of the work contracting contract)
9 Freight Transportation Insurance (110% of the purchase price of insured goods)
9 Completion Delay Insurance (under Freight Transportation Insurance)
9 All-risk Insurance for Construction and Installation Projects (Value of construction
contract)
9 Completion Delay Insurance (under All-risk Insurance for Construction and Installation
Project)
9 Third-party Liability Insurance (Rs.5, 00, 00,000)
9 Construction Machinery and Equipment Insurance (115% of replacement value of
construction machinery and equipment)
9 Other customary, reasonable insurances or those requested by creditors

8.3.3 PPP Housing Model: Key features of the housing model are:
• DDA would provide land for construction of houses.
• The gap funding would be done by DDA in lieu of prescribed housing units.
• The developer shall construct all the housing units and requisite infrastructure.

Stakeholders of the PPP Model


• DDA (Delhi Development Authority)
• Organizing Committee - Commonwealth Games
• Developer (Emaar MGF)
• Lending Institutions
• Consumers

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Approaches for PPP in Housing used:
The Commonwealth games village being developed in Delhi makes use of three suggested
approaches. These are:
1. Virtual Land Approach
2. Subsidy - Cross subsidy approach
3. Partnership Approach

(Fig. F8 - D) Commonwealth Games Village Housing Model

1. Virtual Land Approach: The authority has been directed by the government to provide housing
stock for the players of the Commonwealth Games. The authority in the model has offered land at
prime location to attract interest of real estate developers to bid for the project. The features
synonymous to this housing approach present in the model are:
• Provision of Land by the public entity
• FSI provided is 2.0

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2. Subsidy Cross-subsidy approach: The PPP model is a mix of cross subsidies provided by the
public entity to the developer in lieu of construction of prescribed units. The features synonymous to
this housing approach present in the model are:
• Provision of land by DDA
• Developer builds units and hands over 33% of them free of cost
• DDA buys part of the units to provide financial assistance to the Developer. DDA’s share
increases to 50%
• DDA assists in clearances and stamp duty exemptions

3. Partnership / Equity Sharing Approach: The format of partnership takes two forms:
• Join Development Format: Here land is the contribution of DDA as part of the
equity/partnership while the developer provides other resources.
• Joint venture Format: DDA contributes equity in the form of cash, whereas the private
player also pools in private resources. The pooled fund is then utilized by the Joint Venture
formed for project development marketing.
(Fig. F8 - E)

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8.3.4 Financial Sustainability: The financial sustainability of the model is analyzed on the basis of
financial structure of the model. The contributions towards project finances from DDA and
Developer are documented. Sample cash flows are then made to check whether the inherent
incentives in the PPP model are beneficial to both or not.

Contributions towards finances from DDA:


• Provision of Land
• Financial Assistance of about 300 crores in lieu of certain quantity of prescribed flats

Contributions towards finances from Developer:


• Equity contribution for the construction
• Upfront Payment
• Performance Guarantee

Type Size(Sqft) Price /Sqft(Rs) Total No of units


2 BR 1443 12750 31
3 BR 2092 13250 765
4 BR 2535 14000 209
5BR 3278 15000 163

Sample Cash Flow for Developer: An attempt has been made to generate spreadsheet that will
contain all the requisites of a cash flow statement minus the values for the PPP model. This means
that all the financial support and incentives in the PPP models suggested earlier, shall be documented
in the sample cash flow and it shall be observed how the value of the revenue stream is increased,
while on the same hand the expenditures are reduced. (Refer to Table T8 - E)

8.3.5 Risk Identification, Allocation and Mitigation: A framework enlisting all the risks that may
affect the housing project has been drawn. The risk identification, allocation and risk mitigation
strategies as per the PCNTDA model have been discussed. The Risk framework has been divided
according to the phase of construction in the housing project. (Refer to Table T8 - F)

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