Friday, April 29, 2011
1 billion US $ loan negotiation at Delhi with World Bank
I'm going to Delhi on Monday (2nd May) to participate in loan negotiation with World Bank at North Block, Ministry of Finance where MoEF will also be there. There will be 4 other states too.
Friday, April 22, 2011
Key Take-aways from 7-day Training at IIM-A on PPP
1. PPP is not only for Physical Infrastructure like Roads but also being made applicable to social sectors like school education and district hospitals. Planning Commission is in an advanced stage in finalising CBSE English Medium Class 12 models. Also for Rural roads.
2. All projects may be theoretically done through PPP in the Annuity Model (PFI) but as a rule of thumb, not more than 16% payments through Annuity should be encouraged.
3. PPP are infrastructure service contracts. The Private Player capital should also be at risk. JVCs are discouraged. However, guidelines also exist for JVCs. For 11% equity, a Director is there on Board. For 26% equity, a blocking resolution strength occurs.
4. Even State Govt PPP projects are encouraged to be subjected to GoI Committee approval. This is a must if VGF is sought for.
5. Termination arrangements typically envisage 90% of outstanding debt after construction phase is over. Cocession period is sometimes extended by 1 year if traffic volume is less by 1%, subject to a max. Revenue share if more traffic growth occurs.
6. PPP projects take about 1 yr to finalise & award concession agreement but another 6 months for financial closure.
7. EPC, as distinct from Item Rate Contracts, are also emerging where output standards (eg roughness of road or 'no-more-than-5-vehicles-in-queue-at toll-plaza ) type can be specified and tenders obtained. Some guidelines are available on Planning Commission website.
8. OMT Contracts for 15 year periods are also emerging.
9. A specialised PPP cell in State Govt needs to be activated
10. Land is not leased or mortaged in PPP projects. Land must come back to Govt at end of Concession Period.
11. For delay in handing over land, Rs. 50 per day per 1,000 sq m is sometimes paid by govt
Road density is 111/100 sq km in India (2009).
12. In PPP, Govt is not the Employer.
13. Regulators can be regulated too; rent seeking is a problem
14. Competitors in bids should not have more than 5% common equity
15. Traffic risk should be with conessionaire; VGF for equity support
16. 3Is: Instruments, Institutions, Individuals
17. There is great disparity in PPP norms across sectors
18. Time keeper & monitoring, monitoring outputs key element of contract: constant watch
19. In pvt sector, construction efficiency is better with a time-bound cost plus strategy (GMR)
20. Force Majeur is not defined anywhere; it is different in each agreement
21.
2. All projects may be theoretically done through PPP in the Annuity Model (PFI) but as a rule of thumb, not more than 16% payments through Annuity should be encouraged.
3. PPP are infrastructure service contracts. The Private Player capital should also be at risk. JVCs are discouraged. However, guidelines also exist for JVCs. For 11% equity, a Director is there on Board. For 26% equity, a blocking resolution strength occurs.
4. Even State Govt PPP projects are encouraged to be subjected to GoI Committee approval. This is a must if VGF is sought for.
5. Termination arrangements typically envisage 90% of outstanding debt after construction phase is over. Cocession period is sometimes extended by 1 year if traffic volume is less by 1%, subject to a max. Revenue share if more traffic growth occurs.
6. PPP projects take about 1 yr to finalise & award concession agreement but another 6 months for financial closure.
7. EPC, as distinct from Item Rate Contracts, are also emerging where output standards (eg roughness of road or 'no-more-than-5-vehicles-in-queue-at toll-plaza ) type can be specified and tenders obtained. Some guidelines are available on Planning Commission website.
8. OMT Contracts for 15 year periods are also emerging.
9. A specialised PPP cell in State Govt needs to be activated
10. Land is not leased or mortaged in PPP projects. Land must come back to Govt at end of Concession Period.
11. For delay in handing over land, Rs. 50 per day per 1,000 sq m is sometimes paid by govt
Road density is 111/100 sq km in India (2009).
12. In PPP, Govt is not the Employer.
13. Regulators can be regulated too; rent seeking is a problem
14. Competitors in bids should not have more than 5% common equity
15. Traffic risk should be with conessionaire; VGF for equity support
16. 3Is: Instruments, Institutions, Individuals
17. There is great disparity in PPP norms across sectors
18. Time keeper & monitoring, monitoring outputs key element of contract: constant watch
19. In pvt sector, construction efficiency is better with a time-bound cost plus strategy (GMR)
20. Force Majeur is not defined anywhere; it is different in each agreement
21.
Monday, April 18, 2011
1 Week Course at IIM Ahmedabad 18-23 April, 2011
I reached Ahmedabad yesterday, a Sunday. I am in IIM. There is an one-week course on PPP organised by Planning Commission and IIM, Ahmedabad. It will continue till Saturday, 23rd April.
The training reminds me of the one at Harvard. We start at 8.30 am every day. There is a 15 minute "reflections" by a group on what happened the day before. There is group assignment after dinner, at 9 pm.. Today, Mr Gajendra Haldea of Planning Commission took the first two sessions.
The training reminds me of the one at Harvard. We start at 8.30 am every day. There is a 15 minute "reflections" by a group on what happened the day before. There is group assignment after dinner, at 9 pm.. Today, Mr Gajendra Haldea of Planning Commission took the first two sessions.
Monday, April 11, 2011
Dedicated Registered Body for Clean Ganga
I went to the Ministry of Environment & Forest today. West Bengal is among the first few states to constitute the Programme Management Group that will be dedicated to NGRBA. I was advised to expedite formation of the JV Co that will be one of the Project Implementation Agencies.
I proposed that a workshop may be arranged to finalise the bid documents for a DBO (Design Build & Operate) contract with 5 year O&M for already-sanctioned STPs (Sewage Treatment Plants). I said that we'll need help of consultants from the Ministry. This was agreed to in principle. I'll give a formal proposal on my return to Kolkata (I'm in Delhi airport now, waiting for the 8.50pm Jet flight to Kolkata)
I proposed that a workshop may be arranged to finalise the bid documents for a DBO (Design Build & Operate) contract with 5 year O&M for already-sanctioned STPs (Sewage Treatment Plants). I said that we'll need help of consultants from the Ministry. This was agreed to in principle. I'll give a formal proposal on my return to Kolkata (I'm in Delhi airport now, waiting for the 8.50pm Jet flight to Kolkata)
Thursday, April 7, 2011
Resignation of Chairmen
Due to elections, Asok Bhattacharya has resigned from the posts of Chairman KMDA and Chairman SJDA. The state govt has nominated the Divisional Commissioner Jalpaiguri as the new Chairman of SJDA and the Principal Secretary UD (that is, me) as the Chairman of KMDA for now.
Saturday, April 2, 2011
The New Financial Year 2011-12
FY 2010-11 is just over (31st March year-ending hangover has barely ended).
FY 2011-12 will be important in more ways than one: this is the last year of the 11th FiveYear Plan Period and the last year of JnNRUM and the Elections will bring in a new government to West Bengal.
**
I am holding a meeting of all Development Authorities and Statutory Authoritiesof UD Department on 8th April to review the performance in FY2010-11 and to plan for physical and financial achievements for FY2011-12. Participants have been advised to make powerpoint presentations.
I will also hold a similar meeting on 12th April for the Fisheries Department.
**
I have also just completed one year in the UD Department (I joined on 1st April 2010). I was thinking of some initiatives where I played a role. Some of these have been incorporated in the foreword that I have written for the Annual Report of UD Department for 2010-11. I hope to put it up here soon.
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FY 2011-12 will be important in more ways than one: this is the last year of the 11th FiveYear Plan Period and the last year of JnNRUM and the Elections will bring in a new government to West Bengal.
**
I am holding a meeting of all Development Authorities and Statutory Authoritiesof UD Department on 8th April to review the performance in FY2010-11 and to plan for physical and financial achievements for FY2011-12. Participants have been advised to make powerpoint presentations.
I will also hold a similar meeting on 12th April for the Fisheries Department.
**
I have also just completed one year in the UD Department (I joined on 1st April 2010). I was thinking of some initiatives where I played a role. Some of these have been incorporated in the foreword that I have written for the Annual Report of UD Department for 2010-11. I hope to put it up here soon.
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