case study - ppp in del-gurgaon expressway

8/10/2019 Case Study - PPP in Del-Gurgaon Expressway

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PPP in Delhi-GurgaonPPP in Delhi-GurgaonExpresswayExpressway

Is It the model project for allIs It the model project for all

stakeholdersstakeholders

Submitted y!-Shailesh "ggarwal# Sumit "ggarwal #$ahul %iwari# &ukesh

Sharma# 'i(ek Parmar


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I)%$*D+,%I*)I)%$*D+,%I*)

Stakeholders Public Institution: National Highway Authority of India (NHAI) Private Institution: DS onstructions Inde!endent onsultants: "I#$S or!oration %overn&ents: Haryana State %overn&ent '' Delhi State %overn&ent sers: Patrons

Salient eatures ost: IN" *+ ,illion -ength of $.!ressway: /010 k&s No of lyovers 2 3ver!asses: ** #oll -ane: 4/ -ane State of the Art Pla5a (Asia6s ,iggest7 8orld6s 4rd

,iggest) #9 Surveillance till I%I Air!ort 2 S3S #ele!hony every *1k&s

Pri&ary Issues #ra;c ongestion Pedestrian Safety


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./ PPP00./ PPP00

-i&itation of %overn&ent "esources 2 a!acity to &eet Infrastructure re


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,oncession,oncession

"greement"greement

IssuesIssues No >odel oncession Agree&ent for "eference or ,ench&arking Pur!oses

-ittle or No Docu&entation $.isted at the ti&e of ontract for ,3# basis (/++/)

No inclusion of !ossible risks and co&!le.ities that could !ro! u! in the !ro?ect

Single Inde!endent onsultant for both Design 2 onstruction Phase and 3!erations

2 >aintenance Phase High $.!ertise onsultant for D2 Phase and -ow $.!ertise onsultant for 32> Phase were

generally selected1 #his !ractice was not adhered to1

#here was !rovision of only * I: "I#$S or!oration

#he bidding !rocess for onsultants was also anti=co&!etitive and !robably nfair

Highway a!acity >iscalculation 2 No Provisions for a!acity Aug&entation in thene.t /+ ears

Service Buality to sers was abys&al Parallel o&!eting "oads were !rovisioned to be develo!ed but they were of inade


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,onstruction,onstruction

Phase IssuesPhase Issues

-and Ac


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,oncession,oncession

"greement"greement

)ew &odel)ew &odel a!acity Aug&entation Issue addressed

,ased on Phased Develo!&ent instead of High ost "oads for catering to Pro?ected %rowth inthe -ong #er&

oncession Period deter&ination was based on !resent and !redicted future tra;c

#oll harges $.e&!tion for -ocal #ra;c A &onthly !aid !ass could be charged for local tra;c leading to lower toll revenues Increased 9% &echanis& to &ake !ro?ects viable

-ocal Acce!tance i&!ortant to &itigate !otential for !rotests for Pro?ect to beco&e a >odelPro?ect

lai&s in case of authority6s inability to !rovide resources were better dealt with

Safety Issues were clearly tackled #olling !rohibited till -and used for Highway was &ade usable

"ight of 8ay !rovision i&!le&ented7 whereby C+E of the land ac


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1inancial "nalysis1inancial "nalysis

#oll harges were received and not shared by the !rivate !arty If the total tra;c count increased to &ore than *4+7+++7 half the

total revenue would be shared with NHAI !front ost: IN" C1G r (oncessionaire: IN" r) %rant: IN" (*) r1 NHAI ,orne ost: IN" *4*1G r or!orate #a. "ate: 441E7 >ini&u& Alternate #a.: **1/E J #a.

Holiday for the *st*+ years KSection C+(*a)L

Huge Pro@t Potential for Private Party7 as esti&ated tra;c count was0+++ while the actual was around +++ !assenger vehicles daily

An increase of *+7+++ vehicles would lead to additional inco&e ofIN" 014cr M "s /+car

No toll charges revision or concession !eriod revisions wereenvisaged creating huge !ossibility of !ro@teering by the !rivate!arty for a long ti&e


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Impact onImpact on

stakeholdersstakeholders

>ore than desired !ro@ts could be ski&&ed by DS onstructionsdue to incorrect tra;c !ro?ections As toll !rices could be changed with changes in 8PI7 DS onstructions

could also bene@t if ination rose7 leading to !er!etual growth in inco&e

while the costs were &ore one ti&e and u!front in nature %reater #ra;c counts could lead to huge gains being &ade by DS

onstructions

$nviron&ental N%3s !rotested the use of asbestos during theconstruction of the highway and also the huge nu&ber of treesthat were felled for "ight of 8ay i&!le&entation

Patrons were ha!!y about the road but were not satis@ed aboutits utility due to !eak hour tra;c congestion and drivers inabilityto fa&iliari5e the&selves to #olling Process


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1inancial Implications of the1inancial Implications of the

Project on 'arious StakeholdersProject on 'arious Stakeholders

DS ,onstructions >ore than desired !ro@ts could be ski&&ed due to incorrect tra;c

!ro?ections As toll !rices could be changed with changes in 8PI7 DS onstructions could

also bene@t if ination rose7 leading to !er!etual growth in inco&e while thecosts were &ore one ti&e and u!front in nature %reater #ra;c counts could lead to huge gains being &ade by DS

onstructions

)."I No @nancial reward directly fro& #oll ollection till tra;c count is below

*4+7+++ leading to loss of !otential inco&e

$I%ES ,orporation No inancial i&!lication on the !erfor&ance of the highway Patrons

8ith rise in ination7 toll !rices would rise leading to greater outow ofdis!osable inco&e

>ulti!le-ocal users of the highway had to fork out a huge a&ount tillthe >odel oncession Agree&ent was !ut in !lace


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"isks >itigated in the New >odeloncession Agree&ent ,apacity "ugmentation $isks

($.!osure: NHAI) %ra2c based %oll ,harges:

1inancial $isk ($.!osure: DSonstructionsPatrons)

$esource .ando(er Delays:*perational $isk($.!osure: DSonstruction)

Safety Issues! Safety 3 +sage$isks ($.!osure: DSonstructionsNHAIPatrons)

Inade4uate DP$s:En(ironmental 3 *perational$isks($.!osure: DS onstructions)

,hanges of Scope: *perational3 1inancial $isk ($.!osure: DSonstructions)

3ther Potential "isks Political $isk: orce >a?eure $vents

with res!ect to change in Political scene Going ,oncern $isk: If the o!erator is

unable to run the !ro?ect successfully7then the lender6s @nancial e.!osure isat risk (No "ight of Substitution stated)

%ermination $isk: No sti!ulationstated with res!ect to whether authoritywill buy out the venture in casedevelo!er and lenders don6t getadeetro route isdevelo!ed in the region

Is the &odel ,oncessionIs the &odel ,oncession

"greement (iable enough to"greement (iable enough to

mitigate project risks0mitigate project risks0


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#HANOS

case study - ppp in del-gurgaon expressway

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