PUBLIC- PRIVATE

PARTNERSHIP
Presentation By: Prof. Madhu Bharti

26th November 07
 PUBLIC – PRIVATE
PARTNERSHIP
The concept of a PPP (Public Private Partnership)
has been adopted by various governments in
recent years.

Instead of the public-sector procuring a capital

asset and providing a public service, the private
sector create the asset through a single stand
alone business (financed and operated by the
private sector) and then deliver a service to the
public sector client, in return for payment linked
to the service levels provided.
AREAS OF PUBLIC PRIVATE PARTNERSHIP

(a)
Infrastructur (d) Housing &
e Urban Development
Developmen
t
(b) Development of
Facilities

(c) Transportation
Public private partnerships in infrastructure and
service provision can take various forms such as

 BOT - Build Operate Transfer

 BOOT- Build Own Operate Transfer

 BOLT - Build Own Lease Transfer, etc.,

 BOT
(Build Operate Transfer)
BOT (Build Operate Transfer)

BOT is a relatively new approach to infrastructure

development, which enables direct private sector
investment in large-scale infrastructure projects.

The private partner builds a facility to the

specifications agreed to by the public agency,
operates the facility for a specified time period
under a contract or franchise agreement with the
agency, and then transfers the facility to the
agency at the end of the specified period of time.
Parties to BOT Projects:

Government Agency

Sponsor

Construction Contractor

Operation and Maintenance Contractor

Financiers

Other Parties
Advantages of BOT Projects
• The government gets the benefit of the private
sector to mobilize finances and to use the best
management skills in the construction, operation
and maintenance of the project.

• The private participation also ensures efficiency

and quality by using the best equipment.

• The projects are conducted in a fully

competitive bidding situation and are thus
completed at the lowest possible cost.
BOT PROJECTS IN ROADS
INDIA
NHDP:
National Highways Development Programme (NHDP),
consisting the golden quadrilateral and the north-south,east-
west corridors has been launched.
NHDP is being implemented by National Highways Authority
of India (NHAI).
NHDP is the India’s largest ever highway project.
It involves four and six laning of 13,146 Km of roads with a
total cost of Rs.54,000 crores.
BYPASS ROAD AT COIMBATORE:
Bypass road(28km) at Coimbatore, is the first private road
project executed on BOT basis in Tamilnadu.
This project was constructed by L&T, with a contract period of
32 years(from 1998).
It also include the construction of an additional 2-lane
bridge(22 yrs from 2000) across river Noyaal at Athupalam.
MSRDC:

City Integrated Road Development Projects in Aurangabad,

Solapur and Nagpur.

Widening of Thane Ghodbunder Road SH – 42.

Mumbai to Pune Express Highway Project was given to MSRDC

in march 1997 with permission to collect toll for 30 years.

As many as 46 road projects in the country, worth almost

Rs.70 billion, have been contracted on BOT basis, 17 of
which are being developed under the National Highways
RAILWAYS
Konkan Railway
corporation was supposed
to construct the line from
Roha to Thokur and
operate it for 10 years.
This was the first railway
project to be
NARMADA executed on
INFRASTRUCTURE CONSTRUCTION ENTERPRISE
BOT basis.
LIMITED (NICEL): NICEL is formed by L&T for design,
construction, maintenance and operation of the second Narmada
bridge(4 yrs) at Zadeshwar on NH-8 in Gujarat. It is a 1.4km-long
bridge adjacent to the first bridge, along with 4.6km of approach
roads.

KARUR BRIDGE:

It was constructed on BOT basis by East Coast Constructions and

 BOOT
(Build Own Operate Transfer)
 BOOT (Build Own Operate
Transfer)
A BOOT is a concession contract, the government
entity selects a private company (or consortium)
to develop, finance, build, own, and operate a
power project for a designated period of time,
after which time the ownership of the project is
transferred to the government without
compensation.
 Stages of a BOOT
BUILD:
Project OPERATE:

 Design  Manage and operate

facility
 Manage project
implementation  Carry out maintenance

 Carry out  Deliver

procurement products/service

 Finance  Receive payment for

product/service
 Construct
TRANSFER:
OWN:
 Hand over project in
 Hold interest under
operating condition at
concession
end of concession
Advantages of BOOT Projects
Allows the government to benefit from a project
without funding the entire capital cost upfront.
This relieves budgetary pressures for the
government entity.

Attracts private sector financing, expertise, and

efficiency.

Profit motive ensures that the private sector is

disciplined to complete the project to
specifications, on-time and on-budget, and that
they will operate the project efficiently and with
care.
BOOT PROJECTS IN
INDIA
ROADS
The toll road between Ahmedabad and Mehsana
(51 km) constructed by L&T .

A six lane express way between Jaipur and

Kishangarh on National Highway-8.

An Elevated Mass Rapid Transit System for Thane

city (Ring Railway) was given to the Consortium of
consultants consisting of M/s Consulting
Engineering Services (India) Limited (CES), PB
Kennedy and Donkin Ltd.,LPT Consultant
(Malaysia), Architects and Engineers Pvt Ltd.
WATERWAYS

INLAND PASSENGER WATER TRANSPORT (IPWT)

PROJECT ALONG WEST COAST OF MUMBAI:

The project envisages construction of terminal and

operation facilities at five locations namely
Borivali, Versova, Juhu, Bandra and Nariman Point,
and operation of vessels (catamaran / hovercraft)
for a concession period of thirty years.
TIRUPUR WATER SUPPLY AND SEWAGE PROJECT,
INDIA:
• The project is the first build-own-operate-and-transfer
(BOOT) effort in South Asia.
• The water project is expected to supply the Tirupur area
with 185 million liters of water per day and service
nearly 1,000 textile units and more than 1.6 million
residents in Tirupur and surrounding areas.
• The project is on a Build-Own-Operate-and-Transfer
(BOOT) basis with a 30-year time stipulation, at the end
of which it is to be transferred to the government.
• Bechtel is in charge of the 55-km pipeline to deliver
water from the Bhavani River into a complex system of
25 reservoirs, which will be constructed by the Indian
company Mahindra together with Larsen & Toubro.
SOLID WASTE MANAGEMENT IN KOLHAPUR:

The Kolhapur city (Pop. – 450,000) generates an

estimated 160 tons of solid waste per day. No
organized collection system exists for waste
generated in markets. None of the disposal sites
have pesticide treatment.

The KMC and Zoom Developers signed a 30-year

Build-Own-Operate-Transfer (BOOT) contract in
September 2000.

The concessionaire (Zoom Developers) agreed to

design, construct, operate, and maintain the waste
BOLT (Build Own Lease
Transfer)
The company builds a facility leases out the
operating portion of the contract and on
completion of the contract returns the facility to
the owner.

BOLT have failed to take off due to the poor

contracted
BOO (Build work
Ownprevalent and
Operate) high cost of
construction.
A project in which the private developer builds,
owns and operates a new facility at its own risk.
The government usually provides revenue
guarantees through long-term take-or-pay
contracts for bulk supply facilities or minimum
BLT (Build Lease or Rent
Transfer)
A project in which a private developer builds a
new facility at its own risk, leases that facility
from its government owner, and then operates
and maintains the facility for a given period.

BTO (Build Transfer Operate)

A project whose ownership is immediately
transferred to public sector, but which is
managed by a private operator.
BLO (Build Lease Own)
A project in which the private developer builds a
new facility at its own risk, transfers ownership
to the government, leases the facility from the
government and operates it at its own risk, and
then receives full ownership of the facility at the
end of the concession period.

In the case of electricity generating capacity, the

government usually provides revenue guarantees
through long-term take-or-pay contracts for bulk
power supply.
BBO (Buy Build Operate)
A BBO transaction is a form of asset sale that
includes a rehabilitation or expansion of an
existing facility. The government sells the asset to
the private sector entity, which then makes the
improvements necessary to operate the facility in
a profitable manner. 
BROT (Build Rehabilitate Operate
Transfer)
A project in which a private developer builds an
add-on to an existing facility or completes a
partially built facility and rehabilitates existing
assets, and then operates and maintains the
facility at its own risk for a given period.
Thank you!