Scheme of the Presentation

Legal framework & Institutional Setup for PPP

Bombay Motor Vehicles Tax Act, 1958 (1994 amendment)
Road Policy 1996
Gujarat Infrastructure Development Act, 1999
Permissible assistance under GID Act, 1999
Role of GIDB
GSRDC
Role of GSRDC
Planning for PPP
PPP Project Development Process
Achievements in PPP in SH
Evolution of PPP Projects
Lessons learnt on PPP

Legal Framework & Institutional

Setup for PPP
1994: Bombay Motor Vehicles Tax Act, 1958
amended

1995: GIDB established through a Govt.

Resolution

1996: Road Policy covering PPP

1999: GIDB backed up by legislation
1999: GSRDC set up
2006 : Guj. Infra. Dev. Act, 1999 amended
2006: Tolling Policy under preparation

Bombay Motor Vehicles Tax Act,

1958 (1994 Amendment)

Enabling provision on Tolling

Tolling permitted on Bridges and its approaches,
section of a new road and bypasses
Tolling allowed for
construction, reconstruction, improvements and
repair of above facilities
or if such facility is of special service to the
public

Tolling allowed for investments more than Rs. 50

Lakhs by the State Govt. and other person
Tolling to cover capital outlay, returns and toll
collection expenses

Road Policy 1996

Support to PPP Projects

Land Acquisition by Govt.

RoW to be provided to concessionaire free
of cost on a case to case basis

Subsidizing loss of revenue due to low

traffic than projected

Exemption from royalty on construction

material

Allowing construction in segments & levying

toll on completed sections

Gujarat Infrastructure
Development Act, 1999
Provides a framework for PSP in financing,

construction, maintenance & operation of

infrastructure projects including Roads, Bridges
& Bypasses
Competitive, Transparent & Fair Bidding for
developer selection
Unsolicited offers to be put through Challenge
Bidding
Projects under Schedule III (Projects of Special
Nature) may be offered by Direct Negotiations
Maximum concession period of 35 years
Option for extension of Concession Period

Gujarat Infrastructure
Development Act, 1999
Provides for levy of user charges for
providing goods & services by a project

It has provisions on Financial Security

for maintenance of project, Termination
and Project Transfer

All Infrastructure projects in the

Schedule I are required to adhere to
provisions of the Act.

12 main nature of Concession

Agreements have been spelt out

Permissible Assistance by the State

Govt. under Gujarat Infrastructure
Development Act, 1999
Equity participation max. 49% of the Equity
Financial Assistance max. 20% of the
Project Cost

No financial assistance for Unsolicited Offers

Senior or subordinate loans
Guarantee
Conferment of right to develop any land

Role of GIDB

Policy, Planning, Project Development, Project Proposal

Preparation, Project Appraisal, Statutory Roles, Advisory
activities

Encompasses almost all infrastructure sectors in State list and

Railways & Aviation in Central list

Planning for overall infrastructure development

Planning for integrated development with inter-sectoral linkages

Co-ordinate with sector linked executing agencies and

Departments

Project Development activities

Project Appraisal

Proposal development by means of conceptualising project,

Feasibility studies, Project structuring, Financial Anaysis etc.

Documentation of projects for bidding on PPP

Capacity Building in PPP

GSRDC

Set up as a Govt. Company under Companies

Act
Administrative linkage with Roads & Buildings
Dept.

Board Chaired by the Minister R&BD

Board has professional directors

GSRDC articles mandates for raising finances

from the market for project development
GSRDC to promote PPP in Road sector

Role of GSRDC

Project identification, development activities,

documentation, procurement with respect to
State Highways only

Pre-construction activities like utility shifting

and land acquisition with Dept. intervention

Facilitation in approvals and statutory

clearances

Monitoring of construction activities

Administration of contracts and Concession

Agreements

Planning for PPP

1996: Road Development Plan Upto 2010 by
Roads & Buildings Dept.

1997-98:Gujarat State Highway Project (World

Bank Aided Programme)

1997-99: Integrated Master Development Plan

for Transport Sector in Gujarat by TCS

1999:Vision 2010 by GIDB

2006: Blueprint for Infra. in Gujarat 2020
2006: Updated SoS for World Bank funding
2006: Planning for SHDP in line with NHDP

PPP Project Development

Process
Inter-sectoral
Inter-sectoral &
& Sectoral
Sectoral
Planning
Planning

Project
Project Identification
Identification

Land
Land Acquisition,
Acquisition, Utility
Utility
Shifting,
Shifting, Forest
Forest Clearance,
Clearance,
Environment
Environment Clearance
Clearance

Project
Project conceptualization
conceptualization
&
& Development
Development

Submission
Submission to
to MoF,
MoF, GoI
GoI &
&
Finance.
Finance. Dept.,
Dept., GoG
GoG for
for
approval
approval of
of VGF/Subsidy
VGF/Subsidy

Project
Project Documentation
Documentation
Submission to
GIDB Board

Project
Project Appraisal,
Appraisal,
Approval
Approval under
under GID
GID Act
Act
Approval
Approval

VGF/Subsidy
VGF/Subsidy

Project
Project Bidding
Bidding
Selection
Selection of
of Developer
Developer

Achievements in PPP Projects

on SHs
OPERATIONAL PROJECTS

ROB near GNFC Bharuch (Two lane)

Additional two lane major bridges across three rivers on NH-8

Rajkot-Ahmedabad (on NH-8) Road Four laning (HUDCO Financed)

Ahmedabad-Mehsana Road (52 km) (Four lane + service roads)

Himmatnagar Bypass (two lane with PSS)

Ichhapore-Hazira Road (10 km) (Four Lane)

ROB Chalthan on NH-8

Vadodara-Halol Road (32 km) (Four lane + service roads)

Chhayapuri ROB (four lane)

Continued.

Achievements in PPP Projects

on SHs
PROJECTS UNDER CONSTRUCTION

Kim-Mandvi Road (Two lane with PSS)

Bhuj-Nakhtrana Road (Two lane with PSS)

Continued.

Achievements in PPP Projects

on SHs
PROJECTS UNDER BIDDING

Deesa-Panthawada-Gundari Road (Two lane with

PSS)
UNDER VGF SCHEME OF GOI

Rajkot-Jamnagar-Vadinar Road (127 km) (Four

Laning)

Halol-Godhra-Shamaji Road (170 km) (Four Laning)

Ahmedabad-Viramgam-Maliya Road (180 km) (Four
Laning)

Evolution of PPP Projects

1996-1999:

Projects are of pre-GSRDC and GIDB era

Vadodara-Halol and Ahmedabad-Mehsana Toll Roads awarded on

All projects of the first generation of BOT projects

nomination basis second generation of BOT Projects

Huge secured returns in todays market conditions

State Govt. participated in Equity

Tolling prohibited within 50 km radius of the facility

However, Performance Standards were attempted

Govt. to provide support for achieving returns

Traffic Risk pass through

Restriction in developing competing route

Rajkot-Ahmedabad (on NH-8A) four laned with HUDCO credit

Not a BOT project

Only tolling and maintenance activities outsourced, all risks with the
State Govt.

Maintenance expenditure from State Budget

Continued.

Evolution of PPP Projects

1999 onwards:

Projects put are under the transparent bidding procedures of GID

Act, 1999

Projects are of the third generation of BOT Projects

Two four laning of road projects failed to secure developers as
subsidy was demanded

RoB projects successful on standalone

Development concentrated on two laning projects
First project with upfront subsidy awarded (pre VGF Scheme)
Centre announces VGF Scheme for support to PPP in Infrastructure
projects

Four laning project development revived thanks to VGF Scheme

Lessons learnt on PPP

On State Highways only bridges and some bypasses may become
financially viable on toll alone

Four lane divided facility on SH invariably requires capital subsidy

Even two lane roads with paved side shoulder may require
subsidy

All roads cannot be developed on BOT

Care in selection of road stretches for developing on PPP
Subsidy results in leveraging of State resources
Subsidy compared with industrial subsidy
Subsidy is difficult to come through Finance Dept. of State Govt.
Concession Agreement should be standardised
Scope of project should be clearly defined for developing on BOT
Two and three wheelers should not be tolled
Economic development due to highway development should yield
to revenue generation

Continued.

Lessons learnt on PPP

GID Act ensures transparent bidding

Tolling / User Charges appreciated only when it provides value for

money to the users

Local traffic needs to be carefully defined considering political and

revenue risks associated with it

At-grade junctions are in mixed traffic situation and therefore public

pressure for construction of bumps, especially in urban areas

Increased LoS and enhanced safety at junctions by providing

flyovers/ grade separators

Throughout service roads results in leakage of traffic and revenue

loss

Care be taken that Design & Maintenance risks are transferred to the
Concessionaire

Maintenance timing and cost are difficult to predict and

Concessionaire generally reluctant to be responsible

Maintenance related Performance Standards are difficult to

implement even when IC is present

Continued.

Lessons learnt on PPP

Outsourcing of knowledge activities per se is not an end in itself
Capacity building & accountability of the implementing agency be
ensured

Shortage of well skilled professionals in PPP domain and

Highways

Reluctant participation & no commitment of the other wings of

Govt. in PPP process

At least major Pre-construction activities like land acquisition,

forest clearance and utility shifting must be completed before
signing of Concession Agreement

Concession Agreement should provide flexibility in modification

of design during construction stage

Failures of experiments in PPP are answerable to various Govt.

agencies

Roads & Buildings

Department

Gujarat Infrastructure
Development Board

www.rnbgujarat.org

www.gidb.org

Gujarat State Road

Development Corp.
Ltd.
www.gsrdc.com

Institutional Interaction Under

Rules of Business
GIDB

Approval / Recommendation / Return

Concession Agreement & Project Proposal

R&B Dept

Govt. Agency
(GSRDC)

Approvals of the
Dept./ Govt.

Project
Bidding

Budgeting & Administrative

Concession
Approvals
Design (Not a mandatory one)
Planning & Budgeting
Vesting of land
Toll Admin. (for projects under BMV Tax Act)
Land Acquisition
Traffic Admin.
Safety & Protectionm
GAD
(Planning)

Planning

Finance
Department

Revenue
Department

Budgetary provision
&
Land Acquisition
Financial Approval

Compensation

Legal
Department

Competent
Authority
(LAA)

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