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Models Basics

• Models are based on


• Responsibility sharing pattern (Dominant Private vs public)
• Objectives to be achieved ( Economics vs welfare)
• Types:
• Operation and Maintenance
• Leasing
• Building and rehabilitation of public asset
• Ownership to Private sector
Role of the government
• Policy Formulation
• Objective, type, type and implementation mechanism
• Legal /regulatory framework formulation
• Legislation for involving private sector, define competent authority,
FDI/FII, proposal mechanism, procurement rules, dispute resolution
etc.
• Institutional arrangement
• Defining responsibilities, capacity building as—supervision,
facilitation & Promotion
• Resource Mobilization to attract private player
• Concepts studied in Project financing
Role of Private Player
• Efficiency
• Optimization of cost resources
• Optimization of utility of goods
• Effectiveness
• Innovation
• Administrative
• Process
• Social
Risk Allocation
• Public vs Private debate
• Who is equipped to manage
• Supply side
• Land & other fundamental resources—to public sector
• Construction—Private
• Operational risk—Private
• Transfer related risks—Public
• Demand side
• Forecasting—Private/Public/Sharing
• Political risk
• Regulatory risk—Public
• Force Majeure
• Political/Natural event—Public
• Financial Risks
• Availability—Private
• Currency—Public
• Capital control –Public
Questions
• Describe the role of the government in NH-30 case.
• Elaborate on risk allocation and explain why risk allocation in NH-30 case works or fails to
work.
• Use the information shared in ‘The Road to Kolkata: NH 34 and PPP in India’ and the excel
file shared along with this case to fill the table below and compare the three offers of
“Jewel in the Crown”? (To know more about the offers, please refer to the case, class
discussions and your assignment submissions). Please present your analysis of preferred
option under Case A, Case B and Case C.
  Case A Case B Case C
Sell 50%      
Sell 74%      
Sell 100%      
  Case A: 1 year after the sell. Calculation for investor when Base Traffic sensitivity is 80%
Case B: 1 year after the sell. Calculation for investor when Base Traffic sensitivity is 85%
and Growth rate sensitivity is -0.5%. Also complete the same calculation using Company
  base
Case C: 1 year after the sell. Calculation for investor when Growth rate sensitivity is 3%.
  Also complete the same calculation using Company base

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