Asian Infrastructure Investment Bank 21.11.2015_Final.pptx

AIIB Loan presentation for seeking loan from AIIB by Govt of Rajasthan.

1. AIIB Loan Assistance for Augmentation & Modernisation o f State Highways In Rajasthan Public Works Department, Rajasthan 21.11.2015

2. Context Rajasthan is geographically the largest state in I ndia It has a road network of 1.38 lakh km under PWD Most NH sections are under PPP; about 4,000 km of SH are also under PPP Owing to inadequate budgetary resources, PWD roads remain neglected Hence, state proposes to take up development of state highways on PPP mode PPP projects would include PPP(VGF) and PPP(annuity )

3. Salient features of Projects Development of 20,000 k ms of State Highways and Major District Roads. Some of the Roads will be developed through PPP(VGF) mode in which a grant upto 40% of total project cost will be shared by Government & Balance by private entity i.e. concessionaire. However, Most of roads will be developed on PPP (Annuity) mode based on viability assessment. In the Annuity mode, 50% of the Project Cost during construction is to be shared by State Govt. & Balance 50% by private entity i.e. concessionaire .

4. Loan Assistance This programme of Road Development would require loan assistance to supplement budgetary resources. PPP (Annuity) will mobilise private investment for part-financing (50 %) and also improve efficiencies; State Govt. will bear the remaining 50 % plus project development and land costs. Investment on SH would provide spurt to growth and improve quality of life; will give a fillip to poverty alleviation. Would improve road safety; reduce casualties, loss of limbs and livelihood .

5. Phasing S . No . Activity Key Dates  1. Invitation of RFQ Oct 2016 to Oct 2017  2. Invitation of RFP Jan 2017 to Jan 2018  3. Award of concession Mar. 2017 to Mar. 2018  4. Financial Closure/ Appointed date Sept. 2017 to Sept 2018 5.  Commercial Operation Date (COD) Dec 2018 to Dec 2019 Loan Assistance of USD 250.00 million from AIIB for 1475 Km road length . Project milestones are as under:-

6. Finance Plus Elements Improved road connectivity will accelerate poverty alleviation, improve quality of life and spur economic growth. Will improve and modernise the institutional arrangements for road safety. Will help in creating a response system including speedy removal and trauma centres. Will promote road safety education and awareness. Will support capacity building and human resource development. Will attract private capital in developing highways. Private sector participation will improve efficiencies and reduce costs to the Government and the Road User.

7. Salient Features of Annuity mODE The selection of bidder will be based on the lowest Project Cost. Construction period shall be 12 to18 months. The Concession period shall be 10 years after COD Tolling rights is proposed to be kept with Govt. of Rajasthan. The Concessionaire will be paid back his investment with interest on capital and the O &M expenses, in 20 biannual annuity payments.

8. Structuring of Projects After project identification, a qualified technical consulting firm is selected on cost-cum-quality basis for preparing feasibility report. A qualified consulting firm is engaged as Transaction Advisor. A qualified law firm is engaged for documentation. Consultants will work closely with the PPP Division of PWD, which is headed by a dedicated Additional C.E. and his team of 40 qualified Engineers.

9. Standardisation of Documents & Processes In order to ensure transparency, efficiency and competition, standardisation of documents and processes has been adopted. The RFQ has been adapted from the Model RFQ published by the Union Finance Ministry. The RFP has been adapted from the Model RFP published by the Union Finance Ministry. The MCA has been adapted from the Model Concession Agreement for Annuity Projects published by the Planning Commission, GoI . The Manual of Standards and Specifications published by GOI/IRC has been adopted for PPP projects in Rajasthan The aforesaid model documents have been approved by the State Cabinet and are being followed for all PPP projects

10. Pre-qualification of bidders Bidders will be pre-qualified and short-listed on the basis of technical and financial capacity. Model RFQ document issued by the Central Govt. and tested in a large number of PPP projects has been adopted by GoR . Only pre-qualified and short-listed bidders will be invited for submitting financial bids at the RFP stage.

11. Approval Process The State Government has adopted a stream-lined inter-departmental process of appraisal and approval The project proposals along with appraisal reports are considered and approved by an Empowered Committee on Infrastructure Development (ECID) chaired by the Chief Secretary (like PPPAC in GOI) Projects exceeding Rs . 500 cr. require approval of the Council on Infrastructure Development (CID), chaired by the Chief Minister

12. Statutory Clearances Land Acquisition, Rehabilitation and Resettlement- Most of the development is along the existing roads (except for bypasses) and therefore requirement of LA and R&R is very limited. Environmental and Forest- Most of the road sections included in the Project do not require any such clearances. Land acquisition and other clearances shall be obtained as per applicable laws

13. Repayment of Loan Loan repayment will be governed in accordance to the policy guidelines of AIIB acceptable to GoI / GoR . State Govt. has levied a cess on sale of petrol and diesel which at present is Rs . 1.25 per litre; Repayment shall be met from the State Road Fund as well as budgetary resources.

14. Thank you