CHAPTER 10

FREQUENTLY ASKED QUESTIONS (FAQs) & QUIZ

1: What is a Public Private Partnership?

A. A Public Private Partnership (PPP) is a contractual arrangement between the public and
private sectors with clear agreement on shared objectives for the delivery of an asset or
service that would otherwise have been provided through traditional public sector
procurement.

2 : What is the policy of Government of Karnataka on private investments and public

private partnerships in infrastructure projects?
Ans: The present infrastructure policy of Government of Karnataka encourages private
investments in 10 infrastructure Sectors (as defined under para 13 of Infrastructure Policy
2007)
• Agri-Infrastructure
• Education
• Energy
• Healthcare
• Industrial Infrastructure
• Irrigation
• Public Markets
• Transport & Logistic
• Urban & Municipal Infrastructure
The Government of Karnataka is actively promoting public private partnership in all
above sectors

3 : What are the accepted investment models for infrastructure projects?

Ans : Several types of investment models such as (as per para 23 of Infrastructure Policy
2007)
• Build-and-Transfer (BT)
• Build-Lease-and-Transfer (BLT)
• Build-Transfer-and-Operate (BTO)
• Build Operate and Transfer (BOT)
• Build-Own-Operate-and-Transfer (BOOT)
• Build-Own-and-Operate (BOO)
• Build-Operate-Share-Transfer (BOST)
• Build-Own-Operate-Share-Transfer (BOOST)
• Build-Own-Lease-Transfer (BOLT)
•
Depending on the nature of each project the StateGovernment will decide upon the nature of
the contractual agreement.

4. Whether State Government will participate in equity of such projects?

Ans: State Government may consider making an investment in a particular infrastructural
project if it will facilitate speedy implementation and based on the project's strategic nature.
In Bangalore International Airport Project which has been built on BOT basis, Government
of Karnataka has taken 13% equity shares.

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5. What is the type of support / clearance procedure for such investments in
infrastructure projects ?
Ans: Depending on the investment in an infrastructure project State Level Single Window
Agency (investment below Rs.50 crores) or State High Level Clearance Committee
(investment above Rs.50 crorres) clears the project in a time bound fashion with assurance to
support the project at all levels as per the commitment made in the clearance letter.

6. What are the incentives / encouragements for investments in infrastructure projects ?

Ans: As per infrastructure policy of Government of Karnataka, the project would be allowed
to charge user fees (tolls, port dues etc.) during the the concession period. Incentives and
support such as tax holidays, tax exemptions, Viability Gap Fund, etc., have been provided
under the purview of the Govt. of India. (refer Schedule III of Infrastructure Policy 2007)

7. Whether the investor can charge user fees ?

Ans: Yes, the investor will be allowed to charge user fees (tolls, court dues etc) during the
concession period. (refer Para 19 & 20 of Infrastructure Policy 2007)

8. Are there any examples of success stories in public private partnership investment?
Ans : Following are the examples of successful Public Private Partnership investments.
• Bangalore International Airport Ltd., Devanahalli.
• Four Laning of Bangalore-Mysore Road ( Bangalore-Maddur Section)
• Sanitary Landfills in Bangalore

9. What are the procedure for offering the projects in infrastructure sector?
Ans: Generally infrastructure projects from the concerned departments will be offered to the
private sector through open competitive bidding or Swiss Challenge Route. (refer Para 27 &
31 of Infrastructure Policy 2007)

10. Who are to be contacted for further details and information?

Principal Secretary
Infrastructure Development Department
Room 28, Vikasa Soudha
Bangalore-560001
INDIA
Ph: 91-80-22282366, 91-80-22035085
Fax: 91-80-22280605

Director
Infrastrcture Development Department
Room No. 08, Vikasa Soudha
Bangalore-560001
INDIA
Ph: 91-80-22034070

Chief Executive Officer

Infrastructure Development Corporation (Karnataka)Ltd
RMV extn Sadashivnagar
Bangalore-560001
INDIA
Ph: 91-80-23613015, 91-80-23613014

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Deputy Secretary- I
Infrastrcture Development Department
Room No. 24, Vikasa Soudha
Bangalore-560001
INDIA
Ph: 91-80-22034149

Deputy Secretary- II
Infrastrcture Development Department
Room No. 412, Vikasa Soudha
Bangalore-560001
INDIA
Ph: 91-80-22034768

11. What is Public-Private- Partnership Database?

The PPP database is collection of project information on PPP projects under taken in India.
The database maintains, on regular basis, data initially on the following sectors:
• Airports
• Education
• Health Care
• Ports
• Power
• Railways
• Road
• Tourism
• Urban Development
The data for the same is collected and collated from various PPP nodal agencies of the
government and from project owners or investors.

12. What does the database contain?

The database contains general information about the project like, location, sector, type of PPP
project, status, , bidding information (such as contract award method, contract signing date,
financial closure etc.), project benefits and costs, legal instruments and financial information
about investor holdings and, total debt and equity etc

The database captures all the PPP projects on the sectors below from 1996 in India and is
updated regularly with any new development in the existing and under-construction projects.
The new projects are updated as and when they are in the public domain. The database covers
only those projects that are approved by the Government of India, State governments or local
bodies.

13. Has the government formed any approval committee for PPP projects?
The Cabinet Committee on Economic Affairs (CCEA) in its meeting of 27th October, 2005
approved the procedure for approval of public private partnership (PPP) projects. Pursuant to
this decision, a Public Private Partnership Approval Committee (PPPAC) was set up
comprising of the following:

• Secretary, Department of Economic Affairs (in the Chair)

• Secretary, Planning Commission
• Secretary, Department of Expenditure;

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 • Secretary, Department of Legal Affairs ; and
• Secretary of the Department sponsoring a project.
The Committee would be serviced by the Department of Economic Affairs, who has set-up a
special cell for servicing such proposals. The Committee may co-opt experts as necessary.

14. Has government provided any guidelines for appraisal/ approval of PPP projects?
Different guidelines for different categories of central sector PPP projects have been issued
by the government from time to time.
These are:
a. Guidelines for formulation, appraisal and approval of Public Private Partnership (PPP)
Projects costing less than Rs.100 Crore
b. Guidelines for formulation, appraisal and approval of Public Private Partnership (PPP)
Projects
(i) Of all sectors costing more than Rs.100 crore and less than Rs.250 crore
(ii) Under NHDP costing Rs.250 crore or more and less than Rs.500 crore
c. Procedure for approval of PPP Projects and Guideline for formulation, appraisal and
approval of Public Private Partnership (PPP) Projects in Central Sector

15. How do Public Private Partnerships work?

A. The essence of a PPP project is that the private sector will do one or more of the
following:
• provide private finance to fund the project
• enter into a long term [greater than 5 years] service contract
• undertake the design and construction of an asset on the basis of an output
specification prepared by the public sector and designed to meet broad performance
targets
• enter into a joint venture arrangement with the public sector to provide a service or
asset

16. Are there different types of Public Private Partnerships?

A. Public Private Partnerships can come in different forms, but to be successful they must
provide:
• long term ‘value for money’ for the exchequer
• ensure that environmental and public health and safety standards are maintained
• the public interest is fully protected
For more information, please go to the Irish Government’s Public Private Partnership (PPP)
websitehttp://www.ppp.gov.ie/

17. What are the benefits of PPPs?

A. For the private sector, PPP projects provide an opportunity to participate fully in major
infrastructural development and to contribute new ideas to the design and construction of
works. PPP also allows for the best of public and private sector management skills to work
together in the delivery of services for public benefit.

18. You’ve said you will provide protection against regulatory risk. What exactly do you
mean?
Regulatory risk arises when there is a statutory regulator involved and there are changes in
regulations affecting pricing or other changes imposed on the private proponent, which do not
reflect its investment expectations (as reflected in the Financial Model).

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 For PPP Projects, the concession agreements between the government and the project
proponent may indicate a pre-agreed parametric formula or whatever mechanism dealing
with changes in prices to maintain predictability of project cashflows during the concession
period. The regulatory risk normally arises when government intervenes with price setting
that deviates from what is contemplated in the contract. Since this is entirely within the
government’s control, it has to take on the difference. Moneys may have to be set aside for
this (contingent liability).

19: What will the role of external advisors be in the project development process?
External advisors may be hired to assist in the structuring of PPP projects, and in giving
transaction advice throughout the PPP process.There is no prohibition against outsourcing of
project development services to external advisors or consultants. Hiring their services is
demand-based or as deemed necessary. However, one of the usual problems with external
advisors is weak transition and transfer of capabilities to the IA/LGU personnel themselves
after the term of contract by the consultants.External advisors shall assist IAs/LGUs in
conducting business case or pre-FS of PPPs, FS preparation, contract preparation and detailed
engineering. Business case shall include initial study of project’s potential financial and
economic viability. External advisors shall further assist until a project is bid out or awarded
for implementation.

20: Will the government hire external advisors during the bidding process? What will
their role be?
It is possible for IAs to hire external advisors during the bidding process as may be deemed
necessary.
Given the complexity of PPPs, external advisors need to be hired during the bidding process
specifically for preparation of bid docs and re-hired (hiring may not be all throughout the
process) upon opening of bids to assist IAs/LGUs evaluate the bid submissions. This is to
ensure that the bidding rules are strictly followed by all.

21: What criteria will the government use to determine whether to bid projects out on a
PPP basis?
These basic principles are considered:
• excludability/non-excludability of project benefits (generally and theoretically, the public
sector should provide goods which are non-excludable such as national defense because it is
difficult to charge end-users; the private sector may provide excludable goods such as private
goods and club goods because it is reasonably priced and possible to prevent other potential
consumers (e.g. those who have not paid for the good or service) from actually consuming
the good or service;
• competition and price contestability (if prices to end users are cheaper when provided by the
private sector (PS), then PS may finance the project); and
• Cost recovery components/bankability of the project – if fees, charges and tolls may be
imposed, it is a general indication that private sector may provide the service.
On the above efficiency gains, PPP may be pursued.

22: Based on what criteria will the government prioritize the selection of certain
projects over others?
The selection criteria includes consistency with the sector’s development plan/masterplan,
prospects for bankability/viability, readiness of the project in terms of completion of studies,
and level of government support required for the project.

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 The projects identified for bidding are those that the IAs considered as highly implementable.
This means that the project feasibility studies have been recently updated, the IA’s identified
these as their priority projects, there is not much issue on government funding, and the
projects are initially determined as financially viable for private financing.

23 : What is Project Development ?

Ans : A ) Efforts made by Sponsoring Authority in identifying and structuring of Project which
includes carrying out the feasibility studies, financial structuring, legal reviews (including
environment studies) and development of project documentation, including concession
agreement, commercial assessment studies etc.

24:VGF GAP Funding ?

Ans : VGF: Viability Gap Funding means a grant one-time provided by the Public Sector
(Central Government / State Government) for Financial Support to PPPs in Infrastructure, with
the objective of making a project commercially viable

25: What do you mean by Transaction Advisors ?

Ans : Consultants hired through a transparent system of procurement by the sponsoring
authorities to assist them in designing the project and/or providing technical, financial and legal
input for the project design, and providing advice for the management of the process of procuring
the private sector partner for the PPP project

26 : Has government of India provided any guidelines for appraisal approval of PPP
projects ?
Ans : Different guidelines for different categories of central sector PPP projects have been
issued by the government from time to time. These are: a. Guidelines for formulation, appraisal
and approval of Public Private Partnership (PPP) Projects costing less than Rs.100 Crore b.
Guidelines for formulation, appraisal and approval of Public Private Partnership (PPP) Projects
(i) Of all sectors costing more than Rs.100 crore and less than Rs.250 crore (ii) Under NHDP
costing Rs.250 crore or more and less than Rs.500 crore c. Procedure for approval of PPP
Projects and Guideline for formulation, appraisal and approval of Public Private Partnership
(PPP) Projects

27 : Does the government extend financial support for PPP projects ?

Ans : The Scheme for Financial Support to Public Private Partnerships (PPPs) in Infrastructure.
(Viability Gap Funding Scheme) of the Government of India provides financial support in the form
of grants, one time or deferred, to infrastructure projects undertaken through public private
partnerships with a view to make them commercially viable. It is a Plan Scheme administered by the
Ministry of Finance. Suitable budgetary provisions are made in the Annual Plans on a year-to- year
basis for the scheme.

28 : Has the government provided any funds for the scheme ?

Ans : To address the financing needs of these projects, various steps have been taken like
setting up of India Infrastructure Finance Company and launching of a Scheme to meet Viability
Gap Funding (VGF) of PPP projects. Setting up of infrastructure funds are also being encouraged
and multilateral agencies such as Asian Development Bank have been permitted to raise Rupee

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bonds and carry out currency swaps to provide long term debt to PPP projects.

29 : What is India Infrastructure Project Development Fund ?

Ans : For providing financial support for quality project development activities for PPP projects
to the the Central and the State Governments and local bodies, Scheme and Guidelines of of India
Infrastructure Project Development Fund (IIPDF), have been notified The IIPDF would assist
ordinarily up to 75 per of the project development expenses. On successful completion of the
bidding process, the project development expenditure would be recovered from the successful
bidder.

30 : What is the purpose of the IIPDF fund ?

Ans : The procurement costs of PPPs and particularly the costs of transaction advisors, are
significant and often pose a burden on the budget of the Sponsoring Authority. Department of
Economic Affairs (DEA) has identified the IIPDF as a mechanism through which Sponsoring
Authority will be able to source funding to cover a portion of the PPP transaction costs, thereby
reducing the impact of costs related to procurement on their budgets. From the Government of
India s perspective, the IIPDF must increase the quality and quantity of bankable projects that are
processed through the Central or States project pipeline.

31: What is Viability Gap Funding scheme ?

Ans : The scheme aims at supporting infrastructure projects that are economically justified but
fall short of financial viability. Support under this scheme would be available only for
infrastructure projects where private sector sponsors are selected through a process of
competitive bidding. The total Viability Gap Funding under this scheme will not exceed twenty
percent of the Total Project Cost; provided that the Government or statutory entity that owns the
project may, if it so decides, provide additional grants out of its budget, but not exceeding a
further twenty percent of the Total Project Cost.

32 : How is the government funding done under Viability Gap Funding ?

Ans : The government will provide a Viability Gap Funding (VGF) which shall not exceed 20
per cent of the Total Project Cost; provided that the Government or statutory entity that owns the
project may, if it so decides it will provide additional grants out of its budget, but not exceeding a
further 20 per cent of the Total Project Cost. VGF under this scheme will normally be in the form
of a capital grant at the stage of project construction. Proposals for any other form of assistance
may be considered by the Empowered Committee and sanctioned with the approval of Finance
Minister on a case-to-case basis.

33 : What are the eligibility criteria for getting support under the VGF scheme ?
Ans : The project should be implemented i.e. developed, financed, constructed, maintained and
operated for the Project Term by a Private Sector Company to be selected by the Government or a
statutory entity through a process of open competitive bidding; provided that in case of railway
projects that are not amenable to operation by a Private Sector Company, the Empowered
Committee may relax this eligibility criterion. (b) The PPP Project should be from one of the
sectors mentioned above (See question 4) (c) The project should provide a service against payment
of a pre-determined tariff or user charge.
(d) The concerned Government/statutory entity should certify, with reasons: That the tariff-user
charge cannot be increased to eliminate or reduce the viability gap of the PPP That the Project Term

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cannot be increased for reducing the viability gap; and That the capital costs are reasonable and
based on the standards and specifications normally applicable to such projects and that the capital
costs cannot be further restricted for reducing the viability gap.

34 : What is the procedure for getting Viability Gap funding ?

Ans : Project proposals may be posed by a Government or statutory entity which owns the
underlying assets. The proposals shall include the requisite information necessary for satisfying
the eligibility criteria specified above. Projects based on standardized/model documents duly
approved by the respective Government would be preferred. Stand-alone documents may be
subjected to detailed scrutiny by the Empowered Institution. The Empowered Institution will
consider the project proposals for Viability Gap Funding and may seek the required details for
satisfying the eligibility criteria. Within 30 days of receipt of a project proposal, duly completed
as aforesaid, the Empowered Institution will inform the sponsoring Government/statutory entity
whether the project is eligible for financial assistance under this Scheme. In case the project is
based on standalone documents (not being duly approved model/standard documents), the
approval process may require an additional 60 (sixty) days. In the event that the Empowered
Institution needs any clarifications or instructions relating to the eligibility of a project, it may
refer the case to the Empowered Committee for appropriate directions. Notwithstanding the
approvals granted under this scheme, projects promoted by the Central Government or its
statutory entities are approved and implemented in accordance with the procedures specified
from time to time. In cases where viability gap funding is budgeted under any on-going Plan
scheme of the Central Government, the inter-se allocation between such on-going scheme and
this scheme is determined by the Empowered Committee.

35 : When is VGF disbursed ?

Ans : The VGF is disbursed only after the private sector company has subscribed and expended
the equity contribution required for the project and is released in proportion to debt
disbursements remaining to be disbursed thereafter.

36 : How is the grant-subsidy disbursed for the approved projects ?

Ans : A Grant under the VGF scheme is disbursed only after the Private Sector Company has
subscribed and expended the equity contribution required for the project and is released in
proportion to debt disbursements remaining to be disbursed thereafter.

37: What is the aim of establishing India Infrastructure Finance Company ?

Ans : The need for providing long-term debt for financing infrastructure projects that typically
involve long gestation periods is imminent since debt finance for such projects should be of a
sufficient tenure that enables cost recovery across the project life. Indian capital markets,
however, are deficient in long-term debt instruments. Therefore IIFC is set-up to bridge this gap.

38. Has the government given any guidelines for approval/ appraisal of PPP projects?
Different guidelines for PPP projects below Rs. 100 crore, above Rs 100 crore but below Rs.
250 crores and NHDP projects above Rs. Rs. 250 crores but below Rs. 500 crores have been
notified by the government time to time.

39. What is the applicability of the guidelines issued by Finance Ministry?

These guidelines apply to all PPP projects sponsored by Central Government Ministries or

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Central Public Sector Undertakings (CPSUs), statutory authorities or other entities under their
administrative control. The procedure specified herein will apply to all PPP projects with
capital costs exceeding Rs.100 crore or where the underlying assets are valued at a sum
greater than Rs.100 crore. For appraisal/ approval of PPP projects involving a lower capital
cost/ value, detailed instructions are issued by the Department of Expenditure.

40. Who are not covered under these guidelines?

Ministry of Defense, Department of Atomic Energy and Department of Space are not covered
under the purview of these guidelines.

41. What is the procedure for approval of Central sector PPP projects below Rs. 100
crore?
The sponsoring Ministry identifies the projects to be taken up through PPPs and undertake
preparation of feasibility studies, project agreements etc, with the assistance of legal,
financial and technical experts as necessary.

A Request for proposals (RFP) along with copy of all the agreements that are proposed to be
entered with the successful bidder is sent by the Administrative Ministry to SFC/EFC for
seeking approval before financial bids are invited.

The proposal seeking clearance of SFC/EFC is circulated to all the members of SFC/EFC in
the format specified along with copies of all draft project agreement and project report.

Planning Commission appraises the project proposal and forward its appraisal Note to the
Administrative Ministry. Ministry of Law and any other Ministry/ Department involved will
also forward written comments to the Administrative Ministry within the stipulated time
period. The SFC/EFC takes a view on the Appraisal Note and on the comments of different
ministry and the Administrative ministry.

SFC/EFC either recommends the proposal for approval of the competent authority (with or
without modifications or requests the Administrative Ministry to make necessary changed for
further considerations of SFC/EFC. Once cleared by the SFC/EFC, the project is put to the
competent authority for approval.

42. What is the procedure for approval of PPP projects above Rs. 100 crore but less
than Rs. 250 crore and project under NHDP costing Rs. 250 crore but less than Rs. 500
crore?
The Government vide notification No. 10/32/2006-inf dated April 2, 2007 modified the
guidelines for approval as given under the notification vide No.2/10/2004-Inf dated
November 29, 2005.

Accordingly, RFP (Request for Proposals), i.e. invitation to submit financial bids must
include a copy of all the agreements that are proposed to be entered into with the successful
bidder. After formulating the draft RFP, the Administrative Ministry would seek clearance of
the SFC. The proposal for seeking clearance of SFC is circulated to all members of SFC in
the format specified along with copies of all draft project agreements and the Project Report
within one week of receipt. Planning Commission appraises the project proposal and
forwards it’s Appraisal Note to the Administrative Ministry. Ministry of Law and any other
Ministry/Department involved also forward written comments to the Administrative Ministry.
The SFC takes a view on the Appraisal Note and on the comments of different Ministries,

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along with the response from the Administrative Ministry. SFC either recommends the
proposal for approval of the Committee or requests the Administrative Ministry to make
necessary changes for further consideration of SFC. Once cleared by the SFC, the project is
put up for approval of the Committee mentioned below. The Committee either recommends
the proposal for approval of the competent authority or requests the Administrative Ministry
to make necessary changes for further consideration of the Committee. Once cleared by the
Committee, the project is put up to the competent authority for approval. Financial bids are
invited after approval of the competent Authority has been obtained. The competent authority
for each Project will be the same as applicable for normal investment proposals costing more
than Rs.100 crore. However, pending approval of the Competent Authority, financial bids can
be invited after the approval/clearance by the Committee.

43. For projects above Rs. 100 crore but less than Rs. 250 crore who will
approve/appraise the projects?
For appraisal of PPP projects of all sectors of cost greater than Rs.100 crore but less than
Rs.250 crore, a Committee has been set up comprising of the following:
(a) Secretary, Department of Economic Affairs
(b) Secretary of the Ministry /Department sponsoring the project

44. For projects above Rs. 250 crore but less than Rs. 500 crore who will
approve/appraise the projects?
For appraisal of projects under NHDP of cost Rs.250 crore or more but less than Rs.500 crore
the Committee is as follows:
(a) Secretary, Department of Economic Affairs
(b) Secretary, DORTH
Initially the projects will be appraised by the Standing Finance Committee (SFC). The
composition of SFC is as follows:
Secretary of the Administrative Ministry Chairman
Financial Adviser Member
Joint Secretary of the concerned Division Member
Representative of the Department of Legal Affairs Member

Representative of Planning Commission and any other Ministry/Department are also invited,
if required. SFC either recommends the proposal for approval to the Committee as given
above or requests the Administrative Ministry to make necessary changes for further
consideration of SFC.

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 Quiz
1. What does PPP stands for
a. Public Private Partnership
b. Public People Partnership
c. Public Place Partnership
d. None of the above

2. PPP incorporate following characteristic

a. Contractual agreement
b. Risk sharing among the public & private partners
c. Financial rewards to the private party based on achievements/ output
d. All of the above

3. When was the Karnataka State Infrastructure Policy implemented?

a. 16th July 2008
b. 16th July 2007
c. 16th July 2009
d. 16th July 2010

4. The VGF scheme is meant for

a. Viability Gap in PPP projects
b. Projects are not commercially viable but socially viable
c. Providing grant / subsidy to the extent of 20%
d. All of the above

5. IIDF is meant for developing projects for PPP

a. Yes
b. No

6. The Government Department can seek exemption under KTPP Act for
suitable projects taken up on PPP mode under “SWISS CHALLENGE”
a. Yes
b. No

7. PPP has following advantages

a. Access to private sector finance
b. Transferring risk to the private sector & increased transparency
c. No responsibility to public sector
d. a&b

8. PPP envisages
a. Reduced user fees & better quality of service to people
b. Profit & return on investment private party
c. Sometimes only profit & private monopoly
d. All of the above

9. Generally PPP is required

a. When government has less resources & funds
b. When government could not manage the project on its own
c. When government has better capacity to manage

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 d. a & b

10. In management contract capital investment in the project is made by private

party
a. True
b. False

11. The duration of BOT project is normally between 25 to 30 years

a. True
b. False
[

12. The commercial risk in case of service & management contracts lies with
public entity
a. True
b. False

13. Commercial risk in case of concession & BOT projects lies with private party
a. True
b. False

14. The duration of service contract would normally be between 1 to 3 years

a. True
b. False

15. In any PPP project penalties & rewards are important to ensure
performance
a. True
b. False

16. In some of the major PPP based projects Government agency needs to
a. Ensure necessary environmental & other clearances
b. No need to provide any support to private party
c. Have clear regulated functions
d. a & c
17. Viability Gap Funding (VGF) scheme of Government of India considers
a. All types of projects
b. Only PPP projects
c. Only Public projects
d. None of the above

18. Under VGF scheme following sector is eligible

a. Urban transport, Airports, water supply & other infrastructure project
b. Bridges, Roads, Water supply, Sewerage & Solid waste management
c. Housing schemes
d. a & b

19. The objective of India Infrastructure Project Development Fund (IIPDF) is

to
a. Encourage PPP & assist states

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b. Assist all schemes
c. Only profit based projects
d. None of the above

20. In case of IIPDF scheme ------- % equity is with private partner

a. 40%
b. 51% or more
c. 61%
d. None of the above

21. Unbundling, Identifying parts amenable to PPP, selecting mode of

privatization are important steps in PPP
a. True
b. False

22. The process of PPP involves

a. PPP identification
b. PPP preparation project clearance & procurement
c. Contract management & Monitoring
d. All of the above

23. Government of India has developed web based resource tool kit for decision
making & to improve quality of PPP development
a. True
b. False

24. Following are the tool for analysis of PPP project

a. PPP family indicator tool
b. PPP mode validation tool
c. PPP suitability filter
d. All the above

25. Assessment of risks with the projects, capacity to bear the risk & subsequent
refinement of PPP mode at prefeasibility stage is an important step
a. True
b. False

26. Environmental clearance must be obtained for all physical infrastructure

project that meet certain thresholds
a. True
b. False

27. EIA( Environmental Impact Assessment) is required to be carried out for

giving Environmental Clearance
a. True
b. False

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28. EC (Environmental Clearance) is mandatory EIA notification of MOEF
(Ministry Of Environmental Forest ) for all major infrastructure projects
taken up on PPP mode
a. True
b. False

29. In principle clearance for any PPP based project is given only after full
feasibility analysis & FSR to the concerned clearance authority
a. True
b. False

30. Before applying for in principle clearance, the sponsor should decide which
procurement method would be best suited
a. True
b. False

31. One of the following is a key constraint in PPP initiation

a. Lack of shelf credible, bankable infrastructure projects
b. Enabling policy & regulatory frame work
c. Incapability of public institution to manage PPP process
d. All of the above

32. In case the project is funded by more than one source, the financial analysis
is carried out using
a. Weighted average cost of capital for each project
b. More than the weighted average
c. Less than the weighted average
d. None of the above

33. Project is acceptable if

a. NPV is positive
b. NPV is negative
c. NPV is Zero
d. None of the above
34. Project is acceptable if BCR is more than 1
a. True
b. False

35. Internal Rate of Return (IRR) indicates

a. Net return on investment in the project
b. No return on investment in the project
c. None of the above
d. Only b

36. Social cost benefit analysis helps

a. Selecting financially remunerative project
b. Selecting socially remunerative project
c. In knowing whether social benefits exceed its social cost

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 d. b & c

37. Time discounting of cash flows means

a. Calculation of the present value of cost & benefits during the project life
b. It is the method of reducing to a comparable base the costs & benefits that
accrue at different intervals
c. a & b
d. None of the above

38. Which of the following is especially useful for monitoring project progress
against plan?
a. Gantt charts.
b. Capacity loading graphs.
c. Network diagrams.
d. Flow diagrams.
e. All of the above.

39. Bar chart does not show priorities

a. True
b. False

40. Which of the following is not a reason to reduce project completion time?
a. Avoid penalties for late completion.
b. Reduce new product development time to market.
c. Gain incentives for early completion
d. Release resources for other projects
e. Eliminate project critical path

41. For the following problem, What is the total duration

Activity Designation Immediate Duration

Predecessor
A (1-2) None 2
B (2-3) A 5
C (2-4) A 7
D (2-5) A 3
E (3-5) B 1

a. 19
b. 30
c. 17
d. 9

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42. In the network diagram arrows & circles indicate activities & events
respectively

a. True
b. False

43. In critical path, early event time & late event time at the tail of the activity
are equal
a. True
b. False

44. Total float in an activity is calculated as

a. Late finish –Early finish
b. Late finish –Early start
c. A &B
d. None of the above
45. In project management PERT refers to
(a) Project Energy Rating Time
(b) Project Energy Rating Terms
(c) Petroleum Energy Revolutionary Technology
(d) Program Evaluation and Review Technique.

46. Significance of critical path

a. Activities on it cannot be delayed without delaying the project
b. Longest duration path through the network
c. Activities on it have no slack/freetime
d. None of the above

47. Which of the following are benefits of the network analysis approach?
a. Allows progress to be monitored against plan
b. Derive error free forecasts.
c. Avoid need to use structured approach
d. Eliminate need for management judgment
e. None of the above
48. You have used estimates made by your team members and applied the
Critical path method to compute a Network logic diagram for your project.
Then you found out that it cannot be sufficiently optimized for scarce
resources and fast progress towards a given deadline. What should you do
next?
a. Apply resource leveling heuristics to uncritical activities only.
b. Reduce estimates on duration and work efforts by an adequate percentage.
c. Apply Three-point estimation and Critical chain project management.
d. Remove physical constraints and replace hard logic with soft logic.
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49. A Gantt chart indicates: (Note: more than one answer is correct.)
a. The sequence of activities.
b. Elapsed time of different activities on project
c. Activities occurring in parallel.
d. Overall elapsed time on project
e. None of the above.

50. A project can be considered to have failed if it:

(Note: more than one answer is correct.)
a. Does not meet the business requirements
b. Does not meet the users' requirements
c. Was significantly over budget.
d. Overran significantly on estimated delivery date
e. None of the above

51. What is the Internal Rate of Return (IRR) of a project?

a. The time period needed to pay back the investment from a project when future
income is discounted.
b. The inherent discount rate or investment yield rate produced by the project over a
pre-defined period of time.
c. The rate of negative risk that can be accepted for a project without turning the
Expected net present value negative.
d. The expected benefit from a project’s deliverable calculated as a percentage of
the original investment over a specified time period.

52. Which is not true in regard of RoI (Return on Investment) for a project?
a. It defines the cumulated net income from an investment at a given point in time
or during a defined period.
b. It includes investment, direct and indirect costs and may include allowances for
capital cost, depreciation, risk of loss, and/or inflation.
c. It is most commonly stated as a percentage of the investment or as a
dimensionless index figure.
d. It is the time when cumulated net income is equal to the investment.

53. A project being evaluated by an agency has a cost of capital of 12%. Initial
investment is Rs 1,00,000 benefits as below

Year Benefit

Year 1 25,000
Year 2 40,000
Year 3 40,000
Year 4 50,000

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54. The value of the BCR is

a. 1.75
b. 1.145
c. 2.3
d. 0.45

55. Rule for BCR for a project is

a. BCR > 1 accept
b. BCR = 1 in different
c. BCR < 1 reject
d. All of the above

56. Assumed is a discount rate of 5% per year. Looking at the present values of
the benefits of these projects in the first 3 years, what is true?
a. Both projects are equally attractive
b. The first project is more attractive by app. 7%.
c. The second project is more attractive by app. 5%.
d. The first project is more attractive by app. 3%

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