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Management of services under public

private partnership

Submitted to
Dr. Gyan Prakash

Submitted by
Hemant Singh Kushwah 2013PSM-006
Kunal Kumar Jha
2013PSM-007

Different sectors under PPP in India


Highways
Railways
Ports
Airports
Telecom

Highways
Annual growth projected at 12-15% for passenger traffic, and 15-18% for cargo traffic.
Over $50.60 billion investment is required over the next 5 years to improve road infrastructure.
A large component of highways is to be developed through public-private partnerships :
Several high traffic stretches already awarded to private companies on a BOT basis.
Two successful BOT models are already in place one is the annuity model and another is the
upfront/lumpsum payment model.

Investment opportunities exist in a range of projects being tendered by NHAI for implementing the NHDP
contracts .

A US $ 5 billion project plans to lay 6 lane roads over 6,500 kms of National Highways on the Design Build
Finance and Operate (DBFO) basis in Golden Quadrilateral and other high traffic stretches.

Participation by Government

100 per cent FDI under the automatic route in all road development projects.

100 per cent income tax exemption for a period of 10 years.

Cabinet Committee on Economic Affairs (CCEA) has agreed upon the National Highways Fee
(Determination of Rates and Collection) Rules, 2008 to establish uniformity in fee rate for public
funded and private investments projects.

An increment in the overseas borrowing amount of infrastructure sectors, to US$ 500 million from
US$ 100 million.

Offering cheaper loans for highway projects that will speed up the projects worth more than US$
12. 70 billion under separate phases of the NHDP.

The Ministry of Shipping and Road Transport is considering a green corridor highway project
solely for farmers with no toll charges that would link rural roads with National Highways. This is
likely to be developed along with the six-lane project under the NHDP.

Private sector participation

Investments of the order of US$ 500 billion are expected to take place in the coming years.

The private sector will be largely involved both at construction contracts and BOT levels.

Since January 2006, the Public-Private Partnership Appraisal Committee (PPPAC) has granted
approval to a total of 87 projects including 77 highway projects. The PPPAC approves the
infrastructure projects worth US$ 5.98 billion on November 2008 . This includes 21 highway
projects to be taken up under NHDP Phase III and V.

Some private partners are Reliance Energy, L&T Inter-state Road Corridor Limited, Jaiprakash
Association Limited, Lanco Infratech, DS Construction, etc.

Service provided
Sector

Services under PPP

Private partners

Highways

To set up Trauma centres at every 100 kms on


National Highways.
Motels to be opened at National Expressways.

Foreign company such asIsolux


Corsn of Australia with the
joint venture of Morgan Stanley
Infrastructure fund (MSI).
Indian companies such as DS
Construction Ltd., GMR
Infrastructure Ltd., Hindustan
Construction Company, Larsen
& Toubro Ltd., Ideal Road
Builders Infrastructure
Developers, Gammon
Infrastructure Projects Ltd. and
Soma Enterprises Ltd.

Railways
Over past few years Indian Railways has remarkably transformed itself to set a bench mark in the global
level.

Increase in income through advertising on all Rajdhanis, with the cost of advertising being around US$
1.26 million per train.

Introduction of new generation trains that would be fuel-efficient, recyclable and have low-emission to
generate certified emission reduction credits.

Renewal of 44.5 million of PSC (Pre Stressed Concrete) sleepers has been set for open line works.

Technological up-gradation and modernization for higher operating efficiency.

Development of PPP envisaged in new routes, railway stations, logistics parks, cargo aggregation and
warehouses etc.

Development of 100 budget hotels with private participation in the vicinity of railway stations.

Installation of Wi-Fi for providing wireless access at 500 stations.

Continues

Introduction of marketing rights for advertising on railway tickets and reservation charts.

Establishment of integrated logistic parks on unused lands.

Development of agri-retail hubs, cold storage houses, multi-purpose warehouses on surplus land
with the Railways.

Training of railway managers to meet future challenges, Indian Railways is planning to set an
international management institute in New Delhi.

Renewal over 2941 kms, which will require 3,39,288 tonnes of rail steel, and sleeper renewal
over 2382 kms.

Implementation of Dynamic Pricing Policy, Tariff Rationalization, Non-Peak Season Incremental


Freight Discount Scheme, Empty flow Direction Freight.

Services provided
Sector

Core services

Services under PPP

Railways

Passenger reservation
information online-offline both
(tatkal reservation, train
running status, sms service,
current reservation)
Transportation of
goods/luggages.
Postal and courier
transportation services.

Possible partners

Provision of foot-over bridges, escalators, lifts,

etc. at all major stations including through PPP


route.

Battery operated cars for differently-abled and


senior citizens at platforms of all major stations.
Setting up of Food Courts at major stations for

providing regional cuisine while on board


through emails, SMS and Smart Phones, etc.
Building boundary walls around stations
through PPP route .
Harnessing solar energy by utilizing roof top
spaces of stations, railway buildings and land
including through PPP mode.
Meal on wheel.
Extension of Dual Display Fare Repeaters at all
the Ticket Counters through PPP.
Wi-fi Services in A1 and A category stations and
in selected trains.

Rail Tel is providing wi-fi


facility.
Travelkhana.com is the
private partner to provide
meals on wheel.
Comessum is the private food
partner at every railway
station.

Ports:
Government participation

Formulation of a National Maritime Development Policy to facilitate private investment, improve


service quality and promote competitiveness, and US$ 11.33 billion has been allocated for the
same.

An investment of more than US$ 9.07 billion will be made by 2015 for 111 Shipping Sector
Projects.

In 2008-09, the Ministry of Shipping had launch 10 major expansion projects at an estimated
investment of US$ 1.06 billion, 60% of which is allocated for the Chennai mega container terminal.

Permission for 100 percent foreign direct investment (FDI) for port development projects under the
automatic route.

100 per cent income tax exemption is provided for a period of 10 years for port developmental
projects.

Opened up of all the areas of port operation for private sector participation.

The experience of operating berths through PPPs at some of the major ports in India has been quite
successful. It has, therefore, been decided to expand the programme and allocate new berths to be
constructed through PPPs. A model concession agreement is being formulated for this purpose.

Continues

A high level committee has finalized the plan for improving rail-road connectivity of major
ports. The plan is to be implemented within a period of three years. Further, changes in
customs procedures are being carried out with a view to reducing the dwell time and
transaction costs.

The Government has also decided to empower and enable the 12 major ports to attain worldclass standards. To this end, each port is preparing a perspective plan for 20 years and an
action plan for seven years.

The National Maritime Development Programme is expected to bring a total investment of


over Rs.50,000 crore in the port infrastructure. Such improvement in the scale and quality of
Indian port infrastructure will significantly improve Indias competitive advantage in an
increasingly globalized world.

Private participation:

A leading private shipyard, ABG Shipyard has decided to set up a greenfield shipyard in south
Gujarat with an investment of USD 255.58 million. The new shipyard will be set up over 300
acres.

Gujarat-based Adani group is setting up a ship building and repair yard at about USD 212.98
million.

Larsen and Toubro Ltd has chosen Kattupalli port, in Thiruvallur district, near Chennai, as the
location to build the over USD 425.97 million mega- shipbuilding yard.

Major shipping companies, such as Shipping Corporation of India (SCI), Great Eastern (GE) and
Essar have placed orders worth USD 3.3 billion for 58 ships in Korea and China.

SCI has placed orders for 32 ships worth USD 1.87 billion and will be further welcoming bids for
its USD 3 billion order of 40 ships. GE has placed an order worth US$ 780 million for 14 ships,
while Essar has ordered 12 ships worth US$ 630 million.

Service provided
Sector

Services under PPP

Private participation

Port

To improve the services (like


cargo service, trading of goods
internationally and domestically )
there is need to improve the
quality of equipments related to
loading and unloading of goods
with the coming of private
partners the efficiency increases.

Some of these foreign players are Maersk (JNPT,


Mumbai), P&O Ports (JNPT, Mumbai and
Chennai), Dubai Ports International (Cochin and
Vishakhapatnam) and PSA Singapore (Tuticorin).
Mundra Port and Special Economic Zone Limited,
Ennore Port Limited, Mormugao Port Trust,
Kakinada Seaports Limited, Krishnapatnam Port
Company Limited, Dhamra Port Company Limited
and Adani Petronet (Dahej) Port Private Limited

Airports

Total no. of Airports and Airstrips in India are 454.

The Airports Authority of India (AAI) owns and operates 97 airports

16 are designated as international airports.

Indian private airlines, Jet, Sahara, Kingfisher, Deccan, Spicejet - account for around 60% of the
domestic passenger traffic.

Average no. of Passengers (Per Day)

Mumbai

Delhi

Chennai

7934

Bangalore

3455

Hyderabad

3327

Kolkata

2206

20128
18228

Source: Director General of Civil Aviation, AAI

Privatization

A projected investment of USD 8.5 billion has been planned for the development of Indian
airports during the 11th plan.

Mumbai and Delhi airports have already been privatized.

These two airport are being upgraded at an estimated investment of US$ 4 billion for the
period 2006-16

AAI has planned a heavy investment of USD 3.07 billion over the next five years.

Out of it 43 per cent will be for the three metro airports in Kolkata, Chennai and Trivandrum.

The rest will be invested in upgrading other non-metro airports and in the modernization of
the existing aeronautical facilities.

Continues

Traffic growth has exceeded 20% per annum during the past two years

Major airports such as Chennai and Kolkata are also proposed to be taken up for
modernization through the PPP route.

Upgrading of the ATC services at the airports ,that resolves Issues relating to customs,
immigration and security that enhances the efficiency of airport usage.

A Greenfield airport is already operational at Bangalore and the one at Hyderabad, built by
private consortia at a total investment of over USD 800 million, will be operational soon.

Service provided
Sector

Services under PPP

Private participation

Airport

GMR Infrastructure Ltd,


Maharashtra
Airport Development Company
(MADC)

Development of greenfield airports in


India.
Food courts at airports.
Total infrastructure of airports in India
(including ticketing counter, cleaning
of airports, local vehicles used inside
the airports) are managed by private
parties.
Manage the air traffic and thus
reducing the flight delays.

Telecom

The Department of Telecommunication (DoT) has been much active in policy formulation,
planning, executing, and implementation of in its initiatives.

The Department of telecommunication (DoT) has been focusing on all areas in the sector,
such as basic telecommunication, mobile telephony, Internet service, broadband connections,
and many more.

The year recorded the total number of 156.55 millions of telephone connection.

Over 4 million new users are added every month mostly in wireless.

The department is eying a total number of 500 million new connections by the end of 2015.

India expected to be among the fastest growing telecom markets in the world.

Services offered

Mobile Number Portability (MNP)-This will enable the consumers to retain the same
number irrespective the service provider, in the same area.

National Do Not Call Registry (NDNC) - A regulation has been implemented with a view to
regulating the unsolicited calls from the telemarketers.

The latest and the new being offered by the government is the broad guidelines for the third
generation (3G) mobile service and broadband Wireless Access.

Telecom Devices and Software for Internet, Broadband and Direct To Home Services. Set
Top boxes, Gateway exchange, Modem, Mobile handsets and consumer premise
equipments, Gaming devices.

Service provided
Sector

Services under PPP

Private participation

Telecom

Telecom Devices and Software for Internet,


Broadband and Direct To Home Services. Set
Top boxes, Gateway exchange, Modem,
Mobile handsets and consumer premise
equipments, Gaming devices.
Mobile Number Portability (MNP)

Bharti Telecom Ltd, Idea, Reliance,


Vodafone, Airtel, Tata.

References

Public Private Partnership, Ministry of Finance, Government of India.

www.pppinindia.com

THANK YOU