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Urban Infrastructure: Issues in structuring bankable projectsASCI-World Bank Programme on Strengthening Urban Management (SUM) January 23, 2003
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Often heard at seminars Small is beautifulGet your act togetherFirm up YOUR objectives first but recognize that others have their objectives too Experiment but be willing to correct yourselfStand by your commitments Do not ignore the ultimate customer/userBeware of smart/over-confident developersSounds like preaching? Read on ...
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Structure of the Presentation
Select illustrations of PSP in infrastructure Urban Infrastructure projectsPort sector projectsRoad sector projects
Lessons from experience so far
Objectives & Concerns of various stakeholders
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Illustrations with wide coverageSectors CoveredUrban InfrastructurePortsRoadsStates CoveredPower/Telecom omitted141012Projects from 10 statesKerala, Karnataka, Tamil Nadu, Andhra PradeshMaharashtra, Goa, Gujarat, Madhya Pradesh, ChhattisgarhWest Bengal, OrissaRajasthan, U.P., BiharWell, there are lots of cases and a few good lessons!
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Ahmedabad Municipal CorporationAMC became the countrys first municipality to raise bonds from capital markets Bond raising preceded by an internal restructuring and revenue enhancement measuresBond proceeds used for water supply schemes Bonds secured by a charge on octroi revenues of AMCUtilisation of bond proceeds have been slow as project implementation has been delayed
Lesson: Careful planning & timing is necessary for sustainable project implementation processes
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Bangalore Water Supply Project Private participation was sought for 500 MLD BOOT project by BWSSBBidding preceded by technical and demand studiesAfter pre-qualification, three consortia submitted final proposalsThe project was nearly awarded to a consortium led by Biwater International but the bidding process has been questioned and resulted in delays
Lesson: Clear bidding parameters required to be stipulated & process transparency to be ensured
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Chhattisgarh - Borai Water Supply Project Borai Bulk Water Supply Project is set up on BOOT basis as an industrial bulk water supply for Borai Industrial Growth Centre (BIGC) in Durg district, Chattisgarh under concession from CIDC It is a Project 30 MLD project with a cost of Rs. 420 mn. (including existing assets valued at Rs. 160 mn.)Radius Water Ltd. promoted by Kailash Engineering is the concessionaireThe first phase (12 MLD) of this project is already operational but there are some hiccups as to drawal rights and further expansion
Lesson: Risk taking ability of the promoter helped this project go quickly through the initial stages.
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Chennai Desalination Project Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB) mooted a project for implementing the tertiary treatment / Reverse Osmosis plant of 50 MLD capacity at Kodungaiyur, Chennai on a Design, Build, Own and Operate basisThe submission dates were postponed a number of times as CMWSSB was not sure of attractiveness to investors Ultimately it bid out both EPC & DBOO as alternate optionsResult: There were only two bids both on an EPC basis (L&T and BHEL). Meanwhile VA Tech Wabag another party chose to bid for a limited size project on captive basis for CPCL one of the major clients of CMWSSB
Lesson: There is no harm in experimenting but first get your objectives right
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Cochin Industrial Water SupplyMooted by KSIDC, which invited IFC to assistBasic project preparation was carried out including detailed technical studies as well as demand estimatesAlternate project structures were evaluatedMeanwhile KWA signed an agreement with Cochin Refineries, a major user allowing an off-take of waterLesson: Co-ordination among government agencies required for project development
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Goa Salaulim Water SupplyGoa PWD had invited proposals for water supply project on a BOOT basis (with an option to bid in an alternative innovative format)BOOT bids were found very costly and then the GoG thought of alternative concession routeThe bidder questioned GoG's demand forecastAt present due to successive changes in the Government the process has been temporarily suspended
Lesson: Inadequate homework by the state authorities
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Haldia Industrial Water Supply SchemeHDA has sought private participation and received over 25 Expressions of Interest Despite adequate demand many technical issues (salinity, mix of ground water and river water, etc.) remain unresolved HDA decided against technical study, no project parameters have been set up & may instead go directly for BOT or EPC/O&M contracts (but may not have funds)Potential investors/bidders are unhappy as there is no progress
Lesson: Project has not been thought through clearly
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Nagpur Municipal BondsNMC proposed a Rs. 1.17 bn. capital expenditure programme under Pench-III Stage-I project of the Corporation, which envisages capacity creation in the water supply servicesNagpur Municipal Corporation proposed to raise Rs. 0.90 bn. from issue of Bonds to partially meet its requirement, the balance coming from from internal accruals and grants from State Government With a AA-(SO) rating by CRISIL SBI Capital Markets as arranger could raise only ~ Rs. 0.30 bn. even after extending dates several times.NMC however carried through with its tariff reforms (water & property taxes) & postponed the implementation till it could generate adequate internal accruals
Lesson: Bhagwan ke pas der hai lekin Andher nahi.
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Pune Water Supply Project Water Supply Project conceived with structuring assistance from USAIDProject conceived as EPC+O&M with funding from funds raised by PMCAlso a separate contract for management of billing & limited collectionsProject generated considerable investor interest as careful planning had gone into the project preparationBidding Process was terminated prematurelyPMC is now implementing the project on its own
Lesson: Political risk (the power of lobbying groups) in the project was underestimated
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Tiruppur Water Supply Project Project was conceived by IL&FS with support from GoTN, TACID and IndustryProposed as a BOOT project for sourcing, treatment and supply water mainly to industry with some social coverageTiruppur industry comprises of garment exports and willingness to pay is higherHowever, the project has taken considerable time to develop resulting in cost escalationThe cost of water for the commercial users has more than doubled during this periodReached financial closure 8 years after conceiving!
Lesson: Complex projects are difficult to implement and subject to diverse risks
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Consider this the city of AhmedabadGIDB has proposed an Integrated Public Transit System for Ahmedabad (IPTS) and appointed a consultant for the studiesAMC became the countrys first municipality to raise bonds from capital markets for various projects (primarily water)Sabarmati Riverfront Development Corporation (SRFDC) an organisation set up by AMC is proposing a massive area development project with the help of a local not-for-profit organisation (EPC)
Lesson: Lack of integrated project development for the same city (and now watch out Mumbais integrated development)
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Mumbai: non-toll bridge within cityProject conceived as self-financing bridge1.5 kms long flyover bypassing three junctions at Andheri on Western Express Highway.To be financed by selling commercial property under the bridge.Underground car park, two storeys of commercial property with a six lane carriageway on top.Project delayed initially due to delay in approvals and later due to litigation over alleged environmental issues; now real estate prices not at high levels.
Lessons: Lack of coordinated efforts, insensitivity to local and environmental issues and non-transparent procedures.
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50 flyovers in Mumbai50 flyovers to be financed initially through bond issue and recovery through an entry toll (Rs. 20/-)Tolling commenced sometime back but was met with stiff resistance from Transporters Associations and court has put a stay on tollingMSRDC is fast running out of funds (on account of the flyovers as well as the Express way) but revenues not as per expectationsNow MSRDC would be reimbursed through a fuel cess on all Mumbai Petrol Pumps
Lesson: Realistic assessment of willingness to pay (also, pay for use principle flouted)
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Kolkata Car Park (Rowden Street)Kolkata Municipal Corporation (CMC) awarded multi-level automated car park project to Simplex Projects Project details:Location: Rowden Street (in the vicinity of Park Street) Project Cost: Rs. 90 mn. (CMC interest free advance Rs. 30 mn.)Car Parking: 216 cars at Ground+ 2 levelsTechnology: Machinefabriek Aarding BV of NetherlandsRevenues from Car Parking & AdvertisementsPerformance: Revised estimate for first full year of operations are at 55% of projected as the no parking zone has not been fully enforced resulting in lower car parking revenue
Lesson: The corporation needs to stand by its commitments
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Mumbai - Car Park at Breech CandyMunicipal Corporation of Greater Mumbai (MCGM) has bid out Car Park cum Commercial Development Project near Breech Candy Hospital on a BOOT basisBidding Parameters:Upfront payment of premium to MCGMNo. of cars & two wheelers that can be parkedBids received are a veritable mix of combinations of no. of car parks promised and upfront premium payment assuredCurrent Status: Bidders have been asked to make presentations on their project proposals showcasing the technologies used (capital cost, operating cost & access time)
Lesson: Lack of adequate project preparation to ensure clear & transparent bidding process
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Bidding Results (Mumbai Car Park)
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Structure of the Presentation
Select experience of PSP in infrastructure Urban Infrastructure projectsPort sector projectsRoad sector projects
Lessons from experience so far
Objectives & Concerns of various stakeholders
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Container terminals at Chennai & Kandla & JNPTIn the mid-90s a number of projects were bid out in major ports for private sector Privatisation of container terminals was awarded to P&O a large international Ports & Shipping group at Kandla, JNPT, Cochin & ChennaiDespite some initial hiccups the JNPT project went through to financial closure. The Chennai Container Terminal took some further time (in years!) while Kandla became a major controversy leading to a showdown between the Port Trust & MoST. Cochin was not pursued by P&O as some comforts were not forthcoming.
Lesson: The Government was unable to resolve key issues and/or read the real issues in competitive behaviour
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Container terminal at JNPTBOT Project with a world class facility at a cost of Rs. 7.50 bn.Promoted by one of the worlds leading maritime business group.JNPT did not allow first charge on project assets to the lenders and other amendments to the concession agreement.
So project financing was not available and ultimately the project was financed with the support of sponsor guarantee.
Lesson: Despite hurdles, strong promoters can make project happen.
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Container Terminals current statusAs everyone is aware, JNPT (P&O) is a major success storyBut despite this, and an aggressive lobbying effort by P&O, the new (revised) bidding conditions for the proposed new container terminal at JNPT explicitly disallows bidding or investment by P&O in any formCochin Container Terminal now comes as a package of phased development (handing over of existing terminal followed by development of Vallarpadam) Kandla Container Terminal finally did not proceedAdani sponsored Mundhra Port is now developing a Container Terminal which may be divested in favour of P&O
Lesson: At times it is difficult for the Government to understand the machinations of the private sector
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Dharma port project in OrissaProposed green-field port for dry bulk cargo at an estimated cost of Rs. 15 bn.To be developed on BOOST framework.Promoted by a JV of an Indian engineering company and two foreign companies.Significant delays in finalization of changes in concession suggested by lenders.Meanwhile both foreign sponsors have walked out of the deal while one firm ran into financial difficulties the other had lost interest due to delays and disagreement with respect to its potential role in O&M for the project
Lesson: Lack of application and push by all parties.
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Chemical terminal at Dahej, GujaratGreenfield liquid chemical handling facility at an estimated cost of Rs. 8 bn.Developed on a BOOT framework.Promoted by a JV of GMB, GIIC and four Indian petrochemical and fertiliser PSUs.Project physically complete and operational without the concession being signed and without financial closure.Multiplicity of promoters and speed of response is a key issue.
Lesson: Too many cooks spoil the broth.
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Enron, Dabhol & OWMSLOcean Sparkle Ltd. based in Hyderabad formed a JV with Weismueller of Netherlands to bid for and win a mandate for providing port services to the LNG Terminal at DabholProject: Comprising of state of the art 4 tugs costing Rs. 800 mn. To be built to the specifications of The DPCs O&M operator (a subsidiary of Enron) and operate for 20 yearsProject reached financial closure despite on-going problems at DPC and the tug-of-war with MSEBBy the time the plant closed down, the tugs were ready for delivery but no Enron to certify! Weismueller agreed to buy the tugs for redeployment and settled loans
Lesson: In large projects, the smaller parties fall by the wayside but are saved only if they have some back-up.
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Haldia Berth 4A for coking coalHaldia Port bid out development of Berth 4A for handling coking coal imports required by steel plantsISPL was awarded the contract and they simultaneously approached project financiers and Steel Authority (a likely major off-taker)Despite considerable delays, ISPL was able to reach a 20 year contract with SAIL for using their facility for importing coking coal, an important ingredient in Steel ProductionProject lenders unsuccessfully sought a number of amendments to the Concession Agreement (essentially in line with the Model Agreement drafted by IDFC for MoS)
Lesson: Small project, long off-take contract, viability beyond doubt; a formula for success
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Structure of the Presentation
Select experience of PSP in infrastructure Urban Infrastructure projectsPort sector projectsRoad sector projects
Lessons from experience so far
Objectives & Concerns of various stakeholders
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Noida Toll BridgeProject comprises a 6-lane bridge over Yamuna river and approach roads costing Rs. 4.00 billion.Flyover at Ashram road junction required for smooth traffic flow from the project delayed.Traffic significantly lower than appraisal estimates.Average daily collection is Rs. 0.27 million(Debt service liability about Rs. 1.70 million/day)
Lesson: Co-ordinated development of linkages and accurate traffic estimation key for project success.
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Coimbatore By-passBy-pass on NH-47 developed by L&T on BOT basisToll-free alternative available to local trafficSubsequent to the award of the project, scope enlarged to include strengthening of Attupalam bridge before the by-passToll-free alternative no longer availableHence local opposition to toll collectionEarlier, willingness to pay did not capture such an event
Lesson: Project structure should be sensitive to local traffic
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Durg by-passBy-pass on NH-6 developed by Sancheti group on BOT basisToll-free alternative available to local traffic.Project scope includes a river bridge and ROB.NHAI provided sub-debt and limited shortfall guarantee.Project completed almost as per schedule.No local opposition to toll collection.Project in operation for two years.
Lesson: Being first project, project reached closure with help of financial support from NHAI.
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Delhi-Gurgaon Expressway ProjectOriginally conceived in mid 1990s, CIDB, Malaysia was to be mandated in 2000 to complete this project as part of govt-to-govt initiative, but the proposal sought a grant of Rs. 1.20 bn. from NHAI, and was thus rejected.This year the project bid out by NHAI for Capital Subsidy (Grant) received a number of bids promising premium instead and was awarded to Jaiprakash Industries-D.S.Construction consortium which offered the highest Rs. 615 mn. PremiumThe project is adversely affected by recent Court order on ban of polluting vehicles (non-CNG trucks/busesa) entering New Delhi
Lesson: Classic case of the nature of risks in infrastructure projects. Who is right CIDB or Jaiprakash?
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Mattancherry Bridge at CochinFirst BOT bridge project in Kerala State; GCDA acted as the sponsor authorityOther agencies involved - KSIDC, CPT, Cochin Corporation and PWD Project was offered on a BOT basis and bid for concession period. At bidding stage Traffic studies, technical studies & draft concession agreement was given to biddersProject has been awarded to Gammon IndiaLesson: Initial investment on project preparation yields high returns
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PPP in NHDP The NHDP has been partially successful in attracting private sector investment.
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PPP or not to P(rivatise)Construction ContractRs. 280 mn. Per Km. This is an item rate contract (not FTFC EPC)Add a further Rs. 80 mn. (Pre-op, IDC, Fees, etc.)At Rs. 360 mn. per km. this is still far lower than ..Annuity Project CostRs. 500 mn. per km.A typical BOT project (either annuity or toll based)
Rs. 500 mn. per km.
Now add Rs. 140 mn. for escalation due to extra work to get Rs. 500 mn. Add now for 15-20 years of repairs & maintenance No further addition, Project cost still Rs. 500 mn. per km. Project cost still Rs. 500 mn. per km.
Mumbai Pune Expressway cost was Rs. 16 bn. (as per contractors bids) and now on completion it is Rs. 22 bn. Reliance had quoted Rs. 30 bn. including 1000 hectares of land acquisition
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PPP in roads are maturingToll-based BOTAnnuity SchemeGrant/Capital Subsidy
Reverse Grant/PremiumO&M/Tolling Contracts
Real-estate linked project
Many state level projects6 projects awardedJaipur-Kishengarh (NHAI)Many projects in M.P.Delhi-Gurgaon4-lane NHDP stretchesMumbai-Pune Exp. WayMahakali Flyover, MumbaiVivekanand Flyover, KolkataBangalore-Mysore Infrastructure Corridor
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Comparison of Expressways dev.
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Structure of the Presentation
Select experience of PSP in infrastructure Urban Infrastructure projectsPort sector projectsRoad sector projects
Lessons from experience so far
Objectives & Concerns of various stakeholders
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Some case studies ..1East Coast Road vs. Tiruppur & Noida Toll BridgeDurg Bypass vs. Jaipur-Kishengarh Bhiwandi Bypass vs. Mumbai-Pune ExpresswayDhamra vs. Haldia berth 4A & Kakinada
Small is beautiful
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Some case studies ..2Coimbatore Bypass (sensitivity to local traffic)Mumbai Entry Point Tolls (user pay principle challenged)Noida Toll Bridge (international class but low turnout)
Do not ignore the ultimate customer/user
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Some case studies 3AMC Bonds (Utilisation of proceeds)City of Ahemedabad (GIDB vs. SRFDC)Cochin Industrial Water Supply (KSIDC vs. KWA)Haldia Development Authoritys Water Supply Project
Get your act together
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Some case studies 4Goa Salaulim Water Project (BOOT or Concession)CMWSSBs Chennai Desalination Project (EPC or BOT)Mumbai Car Park (upfront payment or no. of cars)
Firm up YOUR objectives first
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Some case studies 5Mattancherry Bridge (insisted on upfront payment but later relented)NHAIs Palasit Panagarh (rebid after initial high bids)Durg Bypass (selected weak promoter but later extended guarantee & sub-debt support)MMRDAs Convention Centre (bidding failed twice)Experiment but be willing to correct yourself
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Some case studies 6Jaipur-Kotputli Toll Collection OperationsMahakali Flyover (PIL & subsequent developments)NOIDAs Dadri Bridge (UPSBC upstages Simplex)Bidding for Container Terminals in the country
Beware of smart/over-confident developers
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Some case studies 7Kolkata Car Park (enforcement of no-parking zone)BOT Roads in general (timely toll notification)Road Bypasses (enforcement of ban on through traffic)Tax benefits under 10-23 (g) (delays/denial of Certificate) Enron !!!!!
Stand by your commitments
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Summary: Some practical lessonsSmall is beautifulDo not ignore the ultimate customer/userGet your act togetherFirm up YOUR objectives first but recognize that others have their objectives too Experiment but be willing to correct yourselfBeware of smart/over-confident developersStand by your commitments Still sounds like preaching?
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Some practical approachesInstitutionalize your approach through a vehiclePIDB, GIDB, I-Deck, I-Kin, I-Win, APIIF, MPIDB, CIDCFind a champion & give him a long tenureFirst develop small & medium projects to demonstrate success then replicateGive importance to good project preparation and not just to announcing good sounding projectsKeep the bidding simple & evaluate on just one key parameterHire advisors to help!
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Need for PSPPrivate Sector Participation is sought to essentially bring in:
Private capitalPrivate managementNew & better technology
The modality of PSP critically depends on exact objectives sought to be achieved
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Why private sector participation?Economic/Political ReasonsPolicy of privatisationFostering competitionCommercial principles Pay-for-use culturePolitical bottlenecks in tariff restructuring or reduction in subsidies
Management Reasons Better management of all resources & operational efficiencyImproved level of service and responsiveness to usersFinancial ReasonsBudgetary priorities and constraintsAdditionality of fundsBetter utilisation of financial resources
Other reasonsNew and better technology Involvement of users and other stake holdersEnvironmental requirements
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Different modes of PSP can be explored
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Lessons from past experienceReasons for failure attributable to one or more of the following:
Inadequate framework for PSPInsufficient project preparation & developmentFailure to address concerns of all stakeholders
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Framework for PSPClarity in objectives of PSP Institutional restructuring to coincide with PSP initiativesRegulatory framework to be put in placeManaging political risk and willingness to pay issues
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Project preparation & developmentCo-ordination issues: Identification of nodal agency and defining roles of other agenciesEstablishing independent commercial viability of the project: demand, revenues & costsIdentification of risks, allocation & mitigationProject structuring & role of private sectorComprehensive information memorandum covering studies & draft contract agreementsDesigning transparent competitive bidding processTransparent & fair procurement process
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Stakeholder concernsCapacity building of government / public agenciesInterest and capacity among private sector operatorsBuilding awareness for pay for use principle among consumers and communities within societyAddressing financing issues of lenders and investorsEnsuring adequacy of services at affordable rates to the urban poor
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Structure of the Presentation
Select experience of PSP in infrastructure Urban Infrastructure projectsPort sector projectsRoad sector projects
Lessons from experience so far
Objectives & Concerns of various stakeholders
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Government/Local Authority Sustained improvement in provision of InfrastructureConserving scarce public resourcesCreation of facilities and provision of efficient servicesTransparency and fair processProtection of Social/Developmental commitments
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Developer/InvestorCommercial viability of projectFreedom & flexibility in conduct of businessAvoidance of risks beyond controlFairness in transactionDelays in approvals
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Project Financiers/LendersFinancial viability of projectAcceptable concession frameworkFreedom to exercise step-in-and-cure-rightsProtection against defaults by Government and developer
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Consumers/UsersAvailability of facilities & servicesAcceptable levels of tariffs/taxes/tollsAppropriate grievance redress system
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Thank You
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Feedback Ventures Ltd.e-mail: [email protected]: http://www.feedbackventures.com Delhi Feedback House 7, Local Shopping Centre Panchsheel Park New Delhi 110017 India Tel: (011) 2649 5766-68Fax: (011) 2649 5762/65Mumbai Bengal Chemicals Bhavan, 3rd Floor, 502, Veer Savarkar Marg, Prabhadevi Mumbai 400025
Tel: (022) 5661 3632Fax: (022) 5661 3631Hyderabad 7, Amruta Business Complex, 2nd FloorAmeerpetHyderabad 500 016India
Tel: (040) 2375 6481Fax: (040) 2375 6482
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What is project finance
Project Finance is a technique of non-recourse or limited recourse financing in which the project lender principally look to the cash flow of a single project as security for their long-term loans.
In India the term Project Finance was generally applied to long term loans given by Term Lending institutions (Fis) to new (or modernisation/ upgradation) industrial projects as compared to working capital facility extended by commercial banks.
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Extent of sponsor recourseFull-recourseAkin to corporate finance
Non-recourse financeExtremely rare
Limited recourse financeCompletion guaranteesUndertakings to cover cost overruns
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Limited recourse financing...Insulates sponsors from project debt and risk of project failure
Enables them to share some risks in a large project with other participants
Overcome the inability to borrow through a corporate loan as balance sheet cannot support the project debt
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Project finance is cash flow basedCash flow based financing for infrastructure projectsSignificant value of the project is derived from intangibles and not from the assets createdEstimation of debt requirement of the project depends on the future cash flows of the project as against the capital expenditure incurred in conventional projectsTelecom/ Ports : based on peak cash negative Power/Roads : cash requirement till project completionFuture cash flows from the project are the primary source of debt repayment
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Project finance needs strong security structureSecurity structure needs to be more stringent than a normal project assistance and typically includes -Legal mortgage of all assets, including receivables (as opposed to the normal equitable mortgage)Pledge of promoter shareholdings in the project companyEscrow mechanism for cash flows of the companyAssignment in favour of lenders of all the project contracts
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Project finance vs. corporate finance
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Lenders approach to financingFocus on economically strong projects
Back strong sponsors with successful track record in implementing large projects
Comprehensive due diligence on all counterparties (incl. EPC contractor, O&M contractor, Licensor, etc)
Insist on complete financial closure before commitment of any funds
Arranging project finance requires substantial time and cost
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Basis for lenders risk aversionLenders have the maximum money on a project rated at BBB and the minimum returns
whereasThe developers put a small money as equity and aspire for supernormal profitsThe Users get a facility for which they can pay if they so wish (or protest/use alternatives, etc.)The Government puts no money but has the right to intervene, take over if it is dissatisfiedyetthe lenders lenders are not so easy on them and besides expecting a AAA rating also face stringent RBI/SEBI regulations
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Risks over the 3 project phasesLenders identify three separate phase of risk over the life of the project Engineering &Construction PhaseStart-up PhaseOperationPhaseCODPhysical Completion
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Project finance lifecycleDisbursementsArranger Mandate
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FIMMDA Annualised Spreads Source: http://www.fimmda.org
Gilts
zero coupon ratesannualized ytmsPV-zcyccum-pv-zcycZero-coupon ratesMtyPar ytm (semi-annual)
15.86%15.86%0.945.86%5.86%15.78%
25.91%25.91%0.890.945.91%5.91%25.82%
36.02%36.01%0.841.846.02%6.01%35.92%
46.21%46.19%0.792.686.21%6.19%46.09%
56.40%56.35%0.733.466.40%6.35%56.26%
66.58%66.51%0.684.196.58%6.67%76.57%
76.77%76.67%0.634.886.77%6.88%86.77%
87.03%86.88%0.585.517.03%7.09%96.97%
97.30%97.09%0.536.097.30%7.13%107.01%
107.34%1.001.11.21.31.41.51.61.71.81.922.12.22.32.42.52.62.72.82.933.13.23.33.43.53.63.73.83.944.14.24.34.44.54.64.74.84.955.15.25.35.45.55.65.75.85.966.16.26.36.46.56.66.76.86.977.588.599.51011121314151617181920107.13%0.496.627.34%7.44%157.30%
117.41%5.86%5.86%5.87%5.87%5.88%5.88%5.89%5.89%5.90%5.90%5.91%5.92%5.93%5.94%5.95%5.96%5.97%5.98%6.00%6.01%6.02%6.04%6.06%6.07%6.09%6.11%6.13%6.15%6.17%6.19%6.21%6.23%6.25%6.27%6.28%6.30%6.32%6.34%6.36%6.38%6.40%6.41%6.43%6.45%6.47%6.49%6.51%6.52%6.54%6.56%6.58%6.58%6.58%6.58%6.58%6.58%6.58%6.58%6.58%6.58%6.58%6.67%6.77%6.90%7.03%7.16%7.30%13.10%10.38%11.81%12.13%12.50%13.86%10.90%10.90%10.90%10.90%117.20%0.467.117.41%7.65%207.51%
127.49%127.26%0.427.577.49%
137.57%137.32%0.397.997.57%
147.66%147.38%0.368.387.66%
157.75%157.44%0.338.737.75%
167.82%167.48%0.309.067.82%
177.88%177.52%0.289.367.88%
187.96%187.57%0.259.637.96%
198.03%197.61%0.239.898.03%
208.12%207.65%0.2110.128.12%
CONFIRM
Spread input
Annualised spreads12345678910
AAA60626965616058636872
AA+858696939088869196101
AA122124134131129127125131136142
AA-167168180178176175173178184189
A+238242261264268267265271277283
A293308334343352352353358364370
A-360383419429437438439445451456
BBB+457460482479475480485495506517
BBB479510556570583585586592598604
BBB-647651674672669675682693704715
I-Sec
Annualised spreads12345678910
AAA57595961625956565656
AA+77797983878481818181
AA102104104108112109106106106106
AA-132134139146152149146146146146
A+217224239258277274271271271271
A267294324353382379376376376376
A-332379434463492489486486486486
BBB+
BBB402464539573607604601601601601
BBB-
Crisil
Annualised spreads12345678910
AAA60757865525048597081
AA+92100111988581768798109
AA142150161148135131126137148159
AA-202210221208195191186197208219
A+267275286273260256251262273284
A332340351341330328326337348359
A-407415426416405403401412423434
BBB+497505516506495493491502513524
BBB587595606596585583581592603614
BBB-707715726716705703701712723734
Credence
Annualised spreads12345678910
AAA64537070707171747780
AA+8778989898100101105109113
AA123117136138140142144149155160
AA-167159181181181184186192197203
A+231227257262266270274280287293
A281291328336343350356362368374
A-340356398407415423430436443449
BBB+416414448451454466478488499509
BBB449471522540557567577584590597
BBB-587587622627632647662673685696
CONFIRM
CorpoBonds
Spreads over Gilt curve in bpsUpdated on 31st Oct 2002
Annualised spreads12345678910
AAA60626965616058636872
AA+858696939088869196101
AA122124134131129127125131136142
AA-167168180178176175173178184189
A+238242261264268267265271277283
A293308334343352352353358364370
A-360383419429437438439445451456
BBB+457460482479475480485495506517
BBB479510556570583585586592598604
BBB-647651674672669675682693704715
Zero coupon spreads12345678910
AAA60627065616058657379
AA+8586979490888694102109
AA122124135132130128126135144153
AA-167168181179177177175183194202
A+238242263267272272270281293303
A293309337348360360363373387396
A-360384424436446449452464479487
BBB+457460485482479487497517541561
BBB479512564580598601605619636647
BBB-647651678677675686700725754775
11.11.21.31.41.51.61.71.81.922.12.22.32.42.52.62.72.82.933.13.23.33.43.53.63.73.83.944.14.24.34.44.54.64.74.84.955.15.25.35.45.55.65.75.85.966.16.26.36.46.56.66.76.86.977.588.599.510
AAA26060.260.460.660.86161.261.461.661.86262.863.664.465.26666.867.668.469.27069.56968.56867.56766.56665.56564.664.263.863.46362.662.261.861.46160.960.860.760.660.560.460.360.260.16059.859.659.459.25958.858.658.458.25861.56569737679
AA+38585.185.285.385.485.585.685.785.885.98687.188.289.390.491.592.693.794.895.99796.796.496.195.895.595.294.994.694.39493.693.292.892.49291.691.290.890.49089.889.689.489.28988.888.688.488.28887.887.687.487.28786.886.686.486.286909498102105.5109
AA4122122.2122.4122.6122.8123123.2123.4123.6123.8124125.1126.2127.3128.4129.5130.6131.7132.8133.9135134.7134.4134.1133.8133.5133.2132.9132.6132.3132131.8131.6131.4131.2131130.8130.6130.4130.2130129.8129.6129.4129.2129128.8128.6128.4128.2128127.8127.6127.4127.2127126.8126.6126.4126.2126130.5135139.5144148.5153
AA-5167167.1167.2167.3167.4167.5167.6167.7167.8167.9168169.3170.6171.9173.2174.5175.8177.1178.4179.7181180.8180.6180.4180.2180179.8179.6179.4179.2179178.8178.6178.4178.2178177.8177.6177.4177.2177177177177177177177177177177177176.8176.6176.4176.2176175.8175.6175.4175.2175179183188.5194198202
A+6238238.4238.8239.2239.6240240.4240.8241.2241.6242244.1246.2248.3250.4252.5254.6256.7258.8260.9263263.4263.8264.2264.6265265.4265.8266.2266.6267267.5268268.5269269.5270270.5271271.5272272272272272272272272272272272271.8271.6271.4271.2271270.8270.6270.4270.2270275.5281287293298303
A7293294.6296.2297.8299.4301302.6304.2305.8307.4309311.8314.6317.4320.2323325.8328.6331.4334.2337338.1339.2340.3341.4342.5343.6344.7345.8346.9348349.2350.4351.6352.8354355.2356.4357.6358.8360360360360360360360360360360360360.3360.6360.9361.2361.5361.8362.1362.4362.7363368373380387391.5396
A-8360362.4364.8367.2369.6372374.4376.8379.2381.6384388392396400404408412416420424425.2426.4427.6428.8430431.2432.4433.6434.8436437438439440441442443444445446446.3446.6446.9447.2447.5447.8448.1448.4448.7449449.3449.6449.9450.2450.5450.8451.1451.4451.7452458464471.5479483487
BBB+9457457.3457.6457.9458.2458.5458.8459.1459.4459.7460462.5465467.5470472.5475477.5480482.5485484.7484.4484.1483.8483.5483.2482.9482.6482.3482481.7481.4481.1480.8480.5480.2479.9479.6479.3479479.8480.6481.4482.2483483.8484.6485.4486.2487488489490491492493494495496497507517529541551561
BBB10479482.3485.6488.9492.2495.5498.8502.1505.4508.7512517.2522.4527.6532.8538543.2548.4553.6558.8564565.6567.2568.8570.4572573.6575.2576.8578.4580581.8583.6585.4587.2589590.8592.6594.4596.2598598.3598.6598.9599.2599.5599.8600.1600.4600.7601601.4601.8602.2602.6603603.4603.8604.2604.6605612619627.5636641.5647
BBB-11647647.4647.8648.2648.6649649.4649.8650.2650.6651653.7656.4659.1661.8664.5667.2669.9672.6675.3678677.9677.8677.7677.6677.5677.4677.3677.2677.1677676.8676.6676.4676.2676675.8675.6675.4675.2675676.1677.2678.3679.4680.5681.6682.7683.8684.9686687.4688.8690.2691.6693694.4695.8697.2698.6700712.5725739.5754764.5775
Annualised ytms5.86%5.91%6.01%6.19%6.35%6.51%6.67%6.88%7.09%7.13%
Zero coupon5.86%5.91%6.02%6.21%6.40%6.58%6.77%7.03%7.30%7.34%
Annualised ytms12345678910
AAA6.46%6.53%6.70%6.84%6.96%7.11%7.25%7.51%7.77%7.85%
AA+6.71%6.77%6.97%7.12%7.25%7.39%7.53%7.79%8.05%8.14%
AA7.08%7.15%7.35%7.50%7.64%7.78%7.92%8.19%8.45%8.55%
AA-7.53%7.59%7.81%7.97%8.11%8.26%8.40%8.66%8.93%9.02%
A+8.24%8.33%8.62%8.83%9.03%9.18%9.32%9.59%9.86%9.96%
A8.79%8.99%9.35%9.62%9.87%10.03%10.20%10.46%10.73%10.83%
A-9.46%9.74%10.20%10.48%10.72%10.89%11.06%11.33%11.60%11.69%
BBB+10.43%10.51%10.83%10.98%11.10%11.31%11.52%11.83%12.15%12.30%
BBB10.65%11.01%11.57%11.89%12.18%12.36%12.53%12.80%13.07%13.17%
BBB-12.33%12.42%12.75%12.91%13.04%13.26%13.49%13.81%14.13%14.28%
Zero coupon rates12345678910
AAA6.46%6.53%6.71%6.86%7.00%7.18%7.34%7.68%8.03%8.13%
AA+6.71%6.77%6.99%7.15%7.30%7.46%7.63%7.96%8.32%8.43%
AA7.08%7.15%7.37%7.53%7.69%7.86%8.03%8.38%8.74%8.87%
AA-7.53%7.59%7.83%8.00%8.17%8.35%8.52%8.86%9.24%9.36%
A+8.24%8.33%8.65%8.88%9.12%9.29%9.47%9.84%10.23%10.37%
A8.79%8.99%9.39%9.69%9.99%10.18%10.40%10.76%11.17%11.30%
A-9.46%9.75%10.26%10.57%10.86%11.06%11.28%11.67%12.09%12.21%
BBB+10.43%10.51%10.87%11.03%11.18%11.45%11.73%12.19%12.71%12.95%
BBB10.65%11.03%11.65%12.01%12.37%12.59%12.81%13.22%13.67%13.81%
BBB-12.33%12.42%12.80%12.98%13.14%13.44%13.77%14.27%14.84%15.09%
Bootstrapping
PV-ZC
AAA0.93932517830.8811979390.82289928460.76684537710.71287105060.65975397990.60889176120.55342660840.49905365770.457844786
AA+0.93712451670.87724501720.8166280160.75875655320.70311002740.64936823680.5977011120.54173122820.48709087090.4450231491
AA0.93388639570.87102617980.8079621910.74803769960.69032939830.63521499170.58249944730.52535971990.47041000910.4274865438
AA-0.92997817290.86392007910.7976115050.73498353250.6753006860.61821142270.56432060230.50704315750.45124795160.4087448047
A+0.92387794990.85213436340.77970543110.71159910140.64643754050.58668783110.53088964160.47213594640.41612014280.3729532782
A0.91920715620.84176421740.76392992880.69075537520.62115882850.55893831010.50040652660.44159206120.38567469540.3427360535
A-0.91358069780.83022785460.74604320730.66904714950.59720164240.53277765560.47314066590.41353330290.35792209750.3159182078
BBB+0.90555590340.81883996870.73378680050.65794733030.58862931110.52181348420.45993689190.39838201780.34061040880.2959766004
BBB0.9037554210.81125132890.71845623620.63522938380.55811540440.49089496020.43000080310.37040879750.31574987470.2743035481
BBB-0.89023884360.79123329390.69678051160.61381814710.5393650260.46934406290.40543501570.34393408810.28794051380.2452755149
Cum-PV-ZCYC
AAA0.93932517831.82052311732.6434224023.41026777914.12313882974.78289280965.39178457085.94521117916.4442648369
AA+0.93712451671.81436953382.63099754983.38975410314.09286413054.74223236735.33993347935.88166470756.3687555784
AA0.93388639571.80491257552.61287476653.36091246614.05124186444.68645685625.26895630355.79431602346.2647260325
AA-0.92997817291.79389825192.59150975693.32649328944.00179397544.62000539815.18432600045.69136915796.1426171095
A+0.92387794991.77601231332.55571774453.26731684593.91375438644.50044221755.03133185915.50346780555.9195879483
A0.91920715621.76097137362.52490130243.21565667763.83681550614.39575381624.89616034285.3377524045.7234270994
A-0.91358069781.74380855242.48985175973.15889890923.75610055164.28887820714.76201887315.1755521765.5334742735
BBB+0.90555590341.7243958722.45818267253.11613000283.70475931394.22657279814.686509695.08489170785.4255021167
BBB0.9037554211.71500674992.43346298613.06869236983.62680777424.11770273444.54770353754.9181123355.2338622097
BBB-0.89023884361.68147213752.37825264912.99207079623.53143582234.00077988514.40621490094.7501489895.0380895027
Calculations
AAA1.06527874941.06713108711.06861938731.07003455881.07177345591.07344546621.07675648361.08028711271.0812551095
AA+1.06767615861.06985579051.07145611121.07298917781.07461152271.07629382351.07963515131.08320336651.0843306647
AA1.07148080621.07366712111.07527395981.07693310221.07856554721.08026227971.08378442011.08740542171.0886988273
AA-1.07587846841.07829153731.08001701561.08168438861.08345404621.08516630241.08860264251.09244179281.0935906172
A+1.08329305881.08648352911.08878255121.09117570071.09294628931.09467476571.09835218071.1023234061.1036581053
A1.08994546781.09391142541.09690478681.09991586821.10180825131.10396133271.10757295591.1116688291.1130226975
A-1.09749196651.10258481371.10569620461.10860236651.11064602411.11283290951.11669915811.12093144971.1221283489
BBB+1.10509721261.10868975631.1103303671.1118126811.11450182441.11734159091.12192166381.12712307961.1294688614
BBB1.1102538541.11652013751.12012723081.12371246421.12590540611.12813619511.13217833051.13665465481.1380906554
BBB-1.12421072271.12797983271.129770081.13141893741.13436141391.13765675381.14272202281.14835844731.1508920243
ZCYC spreads12345678910
AAA60627065616058657379
AA+8586979490888694102109
AA122124135132130128126135144153
AA-167168181179177177175183194202
A+238242263267272272270281293303
A293309337348360360363373387396
A-360384424436446449452464479487
BBB+457460485482479487497517541561
BBB479512564580598601605619636647
BBB-647651678677675686700725754775
Help
Help for the Calculator
---->Only the cells shaded white are input cells. Make an input only to these cells
---->The other cells are all "no-input" cells. Please do not change any of their values or formulae
Method for price calculation of Non-SLR securities
---->The Corporate Bonds are valued using the FIMMDA Goisec Curve by adding the spreads for various rating categories
---->The spreads are provided by ICICI Securities, CRISIL and Credence Ltd.
---->The spreads provided by them are averaged to arrive at the FIMMDA spreads
---->The spreads across the maturities are added to the respective Gilt rates to value the bonds
---->A detailed document on the methodology is downloadable from the website along with the calculator
---->Before using the calculator make sure that 'Analysis ToolPak' is installed in the Add Ins
Inputs to the Calculator
---->The Inputs required for the calculator are:
- rating of the bond- redemption schedule
- face value of the bond- coupon of the bond
- coupon frequency- day count convention
- value date- maturity date
- last coupon date- final redemption date
In addition, we have provided two methods of valuation, the ZCYC method and the YTM method
Output of the Calculator
---->The Output from the calculator are:
- dirty price of the bond- clean price of the bond
- accrued interest on the bond- residual maturity of the bond
- the yield of the bond- the macaulay duration of the bond
The outputs are given using the method of valuation chosen.
If the method chosen is "ZCYC method", computation is done by discounting all
the cash flows at their respective zero-coupon rates
If the method chosen is the "YTM method", computation is done using the annualised YTM
for the maturity of the bond
YTM method
YTM Based Valuation
Value Date31-Oct-02
Maturity Date20-Apr-04
Face Value100.00
Coupon Rate11.67%
RatingAA-
Annualised Yield7.56%
Coupons/yr4
Price105.96
* Applicable only to Bonds with non-amortizing principals
Time to Maturity1.4916666667
Roundup2
Rounddown1
Roundup Yield0.075857101
Rounddown Yield0.0752940544
Yield for maturity0.0755708857
Calci
S4yearly11
Security DescMethod to be used1AAA5half-yearly22
Rating2AA+quarterly34Zcyc method1
Redemption SchedulePrice Output3AA3YTM method2Strike Price
Dirty Price106.314AA-ChosenYTM method2Maturity
Accrued Interest0.355A+Volatility
Face ValueCoupon RateCoupons/YearConventionClean Price105.956Aactual / actual11Price
10011.67%437A-actual / 36022
8BBB+actual / 36533
Value DateIssue DateLast Coupon DateFinal Redemption Date9BBB30 / 360 E44
31-Oct-0220-Jul-0120-Apr-0420-Apr-0410BBB-30/360 US50
3
Residual MaturityAverage MaturityYieldMacualay DurationSame as coupon payment schedule1S
1.471.389.655%1.37Different from coupon payment schedule2D
1
00.0002.01
20-Apr-04
Coupon Payment SchedulePrincipal Redemption SchedulePV using ytmpv using yield
DateCash FlowsResidual TimePV Cash FlowsDateCash FlowResidual TimePV Cash FlowsPrincipal BalanceCoupon ZCYC RatePrincipal Redn ZCYC RateCoupon spreadsPrin Redn spreadsDiscounting rates103.524887317-2.78106.3038786828
20-Jan-0320-Jul-01100100
120-Jan-032.920.222.8720-Apr-041001.4789.84100020-Jul-011001005.86%5.88%0.0170.0177.53%7.56%2.858432775387.31920713742.870711828589.836248386
120-Apr-032.920.472.820.000.000020-Jul-011001005.86%0.00%0.0170.0007.53%0.00%2.794204027202.81960448150
220-Jul-032.920.722.770.000.000020-Jul-011001005.86%0.00%0.0170.0007.53%0.00%2.730728860902.76885429960
320-Oct-032.920.972.720.000.000020-Jul-011001005.86%0.00%0.0170.0007.53%0.00%2.66802184602.71847492880
420-Jan-042.921.222.670.000.000020-Jul-011001005.87%0.00%0.0170.0007.54%0.00%2.606754801902.66901221180
520-Apr-042.921.472.620.000.000020-Apr-0410005.88%0.00%0.0170.0007.56%0.00%2.547537868202.62097254670
631-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
731-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
831-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
931-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
1031-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
1131-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
1231-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
1331-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
1431-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
1531-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
1631-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
1731-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
1831-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
1931-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
2031-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
2131-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
2231-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
2331-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
2431-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
2531-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
2631-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
2731-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
2831-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
2931-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
3031-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
3131-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
3231-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
3331-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
3431-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
3531-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
3631-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
3731-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
3831-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
3931-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
4031-Dec-990.000.000.000.000.000031-Dec-99000.00%0.00%0.0000.0000.00%0.00%0000
4116.4789.8360601623
42
43
44
45
46
47
48
49
50
51Price105.95
52Error0.0
53Next Coupon date20-Jan-03
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
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81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
1020.0
1030.0
1040.0
1050.0
1060.0
1070.0
1080.0
1090.0
1100.0
1110.0
1120.0
0.00.000
The Principal repayment dates have to be entered here. The 1st row should not be left blank.
CALCULATE
Please enter the reduced face value if some of the principal has already been repaid
MBD00000044.unknown
MBD000FB7E6.unknown
MBD000F5360.unknown
-
Different modes of PSP can be exploredProject Financing required
-
Common Project Structures 1Build-Operate-Transfer (BOT)New Asset/facility against collection of user fee investor rights revert back to the public authority at the end of the concessionownership vests with the public authorityused for highways, utilities and ports
Build-Own-Operate (BOO)similar to BOT but without the transfer of rightsmay also stipulate payment of some fee to the public authority for the right to operate the facilityused for telecom and power projects
-
Common Project Structures...2Built-Own-Lease-Transfer (BOLT)assured revenue through lease rentalsproposed for Indian Railways
Built-Own-Operate-Share-Transfer (BOOST)revenue shared with the public authorityMinor ports proposed in some states
Annuity structureConcessionaire responsible for construction and O&MConcessionaire receives fixed annuity over the concessionProposed for National Highways projectsLikely to replace Railways BOLT scheme
Lack of clarity in objectives of PSP *PSP aimed at attracting capital & curtailing public sector employment rather than increasing efficeincy and effectiveness of service delivery*Undue emphasis on new source development rather than improving distribution systems and operational management
Lack of city-wide scope *Scale efficiency on outsourcing can be achieved (in operational tasks like transportation of water & solid waste( through municipality-wide schemes rather than restricted to certain limited areas.
Institutional restructuring *Despite 74th Constitutional Amendment Act which vests water supply & sanitation services with local / municipal authorities there is no clear link among investments, costs & revenues*Political intervention*Skewed tariff policies*promote corporatisation of water providing agencies as a step towards profit centre concept
Regulatory frameworkTo specify service standards, quality & tariff issues, balance industry & consumer interestsImpact on poorImpact of different PPP approaches on employment conditions and on access to services for the poor
Capacity of public agenciesMany local initiatives have failed due either to inadequate understanding and preparation or due to political reasons
Interest and capacity among private sector operatorsThe number of operators is limited in this sector. Hence capacity building among these operators is required
Capacity of consumers is important in influencing the initial design decision through articulation of local demand as well as monitoring operator performance