Madhya Pradesh Road Development Corporation Limited State Highway

Madhya Pradesh Road Development Corporation Limited State Highway Authority of Madhya Pradesh Welcomes IAS Officers Trainees of 2014 Batch (Group VIII) 10 Feb 2015 (Version 1. 5) Connecting People Through Quality Infrastructure

Background • MP was known for bad roads. • Improper design based on traditional approach. • Budget driven construction methodology in place of demand driven. • Poor fund flow for projects – low budget outlay. • Result - Poor Connectivity, low industrial investment, sluggish business growth. 2

Transition to new regime • Government-embarked on program to revamp road sector. • M. P. Bridge Corporation Ltd. revived in December 2000 and given mandate to upgrade highways on PPP • Considering poor traffic, grant was made bidding parameter. • Madhya Pradesh Infrastructure Investment Fund Board (MPIIFB) created to arrange funds for grant. • Rs. 500 Crore (US $ 125 M) outlined for the purpose. • Approx. 2000 km. Road length identified to be developed in phases. 3

Madhya Pradesh Road Development Corporation • Incorporated as wholly owned State Govt. Company under Companies Act 1956, in July 2004. • State Highway Authority under the State Highway Act 2004. • Mandated to develop, regulate and maintain highways with focus on PPP. • The Chief Minister is the chairman, Minister of Public Works Department & the Chief Secretary are the Vice Chairmen, the Secretaries of the PWD, Finance , Forest, Urban Affairs and Mining Dept. are members on the Board. • MD, MPRDC is also a director. 4

Road network with MPRDC Category National Highways State Highways Major District Roads TOTAL 5 MPRDC Road length (in km) 1450 10297 6664 18411

Our project financing philosophy Invite private investment by providing grant to/ premium by / the concessionaire on competitive bidding 6

MPRDC Portfolio – BOT Projects Length in km and Cost in Cr Rupees Details No. of Roads Length Cost Completed State Highways 26 2708 4993 Completed State Highways (Toll + Annuity) 11 451 853 1 108 315 38 1190 1925 9 706 1266 14 645 1520 In Progress National Highways 8 850 6429 Proposed State Highways 3 138 370 Proposed National Highways 8 491 3485 25 863 1464 24 Border Check Posts One - 1094 16 ROB Group I One - 657 18 ROB Group II One - 674 Completed National Highways Completed MDR (Toll, Toll + Annuity, Annuity) BOT Projects In Progress State Highways (Toll + Annuity & Annuity) Annuity (MDR) 7

MPRDC Portfolio – Other Projects Length in km and cost in Cr Rupees Details ADB Funded Regular Contracts No. of Roads Length Cost Completed 50 3304 2452 In Progress 15 1080 1707 Completed SH 29 1366 1011 In Progress 17 334 505 8 490 57 Completed 4 126 196 In Progress 2 71. 3 133 Completed 4 works - 126 In Progress 10 works - 1635 282 14921 32867 OMT State Highway Fund Building Works Total 8

MPRDC Portfolio - Projects in pipeline Length in km and Cost in Cr Rupees Details 1 ADB-IV / JICA (MDR’s) 2 Four-laning of State Highways Total 9 No. of Roads Length Cost 156 4412 9004 1 199 2249 159 4611 11253

Shift in strategy • Takeover of entire state highway network including maintenance. • To overcome the limitations of existing PPP model new financial models introduced. • All remaining state highways were taken for development in different stages. • Important Major District Roads also taken up to complete the network under PPP. • Performance based maintenance introduced through OMT. • MOU signed with MORTH for reconstruction of National Highways. 10

Financial models • BOT (Toll) Model • BOT (Toll + Annuity) Model • BOT (Annuity) Model • Deemed Shadow Fee Model • OMT Model 11

Border Checkposts • Up-gradation and integration of 24 Border Check Posts in MP covering all State border crossings • An integrated, real time system for Transport, Commercial Tax, Forest, Mandi & Mining departments • Purpose of the project • • To increase the revenue of State Government. To control overloading & damage to state roads. To reduce leakage & corruption. To use technology for reduction in transaction time and ensuring complete transparency. • Check posts to serve as facilitation centres 12

Border Checkpost e-Data Capture Components Automatic Vehicle Classifier 13 13 Automatic Number Plate Reader Electronic Weigh Bridge Automatic Boom Barrier and Traffic Light

Singrauli Airport • Airport at Singrauli is proposed with private participation. • SPV – Singrauli Airport Corporation Ltd. Incorporated. • Implementation Agency- MPRDC. • 46 hectares land is available & 27 hectares is under acquisition. • Consultant appointed. • MCA of Planning Commission for Greenfields Airports will be adopted. 14

Externally aided projects Loan No. 15 Length (In km) Loan Amount (US $) Status 1959 -IND MPSRDP 1602. 59 150 Million Completed 2330 -IND MPSRSP-II 1701. 52 320 Million Completed 2736 -IND MPSRP-III 1080. 37 250 Million Nearing completion ADB-IV 1500 (MDR) 350 Million Loan Negotiation completed J. I. C. A. 1500 (MDR) 350 Million Posed to JICA by central Govt.

Our strengths • Concessionaire’s faith in MPRDC due to transparency in bidding process. • Lender’s faith in MPRDC ensuring Financial Closure of BOT Projects. • Deployment of Supervision and Quality Control Consultants with international expertise. • Adequate Budget provision for Annuity &VGF payments by the State Government. • Annuity payment along with bonus on due date. 16 • Experts like Legal Advisor, CA, CS, Environment expert, MIS expert, Road Data System Engineer are engaged in house.

Our strengths • Political commitment & support. • Concessionaires are treated as partners. • Bills are cleared in 2 to 4 working days. • Land Acquisition and Environmental Clearances are planned and executed well in advance. • Chief General Manager at Head Office & Divisional Manager coordinate with District Administration. • NOC of State Forest Department, permissions for utility shifting, tree cutting permission etc are procured before Appointed date. 17

Ensuring quality • 3 -tier system of checking • PMC of Concessionaire • Independent Quality Control Engineer • Officers of MPRDC • Quarry approval after thorough testing. • Field & lab testing is mandatory as per the norms of MORTH. • Use of Graders for maintaining the camber at sub grade/GSB level. • Crushed GSB • Layer -1 (drainage) Coarse graded. • Layer -2 Close graded. • WMM in place of WBM with pavers. • Use of Sensor Paver in place of mechanical paver for BT works. 18 • Use of RMC plant in place of normal concrete mixers.

Application of VFM in MPRDC • During VFM analysis of MDRs, 22% Annuity for BOT (Annuity) Projects was envisaged. • After bidding, the projects awarded on Annuity of 18. 30% under BOT (Annuity) projects & 12. 88% as on average under BOT (Toll+ Annuity) projects. 19

VFM Analysis Project Details • Total Project Cost • Total Length of the Projects • Average Annuity (actual) Parameters Construction Cost 20 $476. 66 Million 1520. 03 Km 18. 30% of Project Cost EPC BOT -Annuity $476. 66 Million $595. 80 Million (Including 25% of TPC for financing cost, (Escalation by 25%) contingency & other charges) 2& ½ Years 1 & ½ yrs Construction Period O & M Exp Routine Maintenance 0. 004 M$/km/p. a. Periodic Maintenance 0. 02 M$//km/p. a. . Electricity & Patrolling 0. 002 M$/km/p. a. -

VFM Analysis Parameters EPC BOT - Annuity 9. 00% 13% 100 70: 30 Immediately 6 months after COD Discount Rate for NPV Calculation 15% Loan Repayment Period(in years) 10 10 Average Excellent Not availed Availed Traditionally applied Latest available Required Not required 456. 40 401. 23 Interest Debt: Equity Ratio Funds Requirement Quality of Roads Efficiency of private sector Technology Setting up of full infrastructure & staff NPV calculated (in $Million) Value for Money (NPV of EPC –NPV of Annuity) 21 55. 17

Accident Response System • Implementation of ARS system on PPP mode. • Technical Assistance through ADB for capacity building in road safety. • Accident Response System & Traffic Management Centre including operation & maintenance for 5 years with estimated cost of Rs. 12. 50 Crore (US $ 2. 5 M) is being set up. • ARS includes centralized call centre, GIS based automatic vehicle tracking system (AVTS), Computer aided dispatch system, Traffic Management Centre. • Trial run started from 24 th Dec 2014. State wide number 1099 and Citizen portal available for assistance. 22

State Highway Fund • State Highway fund established under an Act for investment in highways & infrastructure projects. • Executive Committee under the Chairmanship of Chief Secretary to administer the fund. Sources of Fund 23 Application of Fund All payments of Premium For Maintenance and Repair of Highways Proceeds towards encashment of Performance Security or Bid Security For Meeting any Development Cost of Highway or Infrastructure Project All returns on investments made out of the Fund For Project Preparation, Pre Tender Activities, Cost towards Utility Shifting, Land Acquisition

Logistics park, Powarkheda 24 Area 115 acres land Concession Period 33 years, extendable by 15 years PPP Mode DBFOT Estimated Cost Rs. 138. 50 Crore (US$ 35 M). Bidding Parameter Highest Upfront Premium Construction period 3 years for minimum facilities (COD) 7 years for completion Service Portfolio Rail Terminal Warehousing Container Freight Station Cold Storage Grain & Horticulture Procurement Trading & Collective Marketing Negotiable Warehouse Receipts

Electricity transmission line between Satpura and Ashta 400 KV (DCDS) Transmission Line for evacuation of Power from 2 x 250 MW extension unit at Satpura Thermal Power Station 25 Type of PPP DBFOT Total Length 240 KM Implementing Authority M P Power Transmission Company Limited, Jabalpur (MPPTCL) Estimated cost Rs. 282. 72 Crore (US$ 55 M) Concession Period 25 years (incl 15 months construction) Provision for 10 yrs extension Bid Process Two-stage (RFQ + RFP) Bidding Parameter Lowest Grant (VGF) / Highest Premium

Indore City Transport Service • High travel demand, traffic congestion, accidents, pollution, rapid growth of city. • No concept of bus stops and time schedules. • To create a specialized and effective agency to monitor and provide intra-city public transport system. • PPP model with Private investment in buses, ticket vending, O&M and ancillary services. • Self-financing and revenue generating model for bus stops. • Fully computerized ‘Ticket Vending system’. • Every bus is fitted with GPS based tracking device with online data transfer facility. • Upgraded to BRTS under PPP mode itself. Free from subsidy. • Passenger information system is introduced for the first time in the country. • Benefits : 26 • • Savings in travel time. Reduction in congestion on roads. Reduction in road accidents. Reduction in environmental pollution.

“A country has to pay for its roads, “ whether it has them or not, it pays more for those it does not have. So Let’s Have them…… Our commitments remains. . . Connecting People Through Quality Infrastructure