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F. No. 3ll2l20l6-PPP
Govi:rnment of India
MinistrY of Finance
Departmen,t of Economic Affairs
(Infrastruc e Section)
North Block. New Delhi
Subject: Record of Discussion of 74th It[,eeting of, the EnrLpowered Institution (EI) for the
Scheme for Financial Support to PPPs in Infrastructure (\ziability Gap Funding Scheme).
The undersigned is directed to enclose a copy of Record of Discussion of 74th Meeting of
the EI for the grant of VGF under the Scheme for Financial. Support to PPPs in Infrastructure
held on 6,h October ,2016 on below-mentic,ned 2 projects for information and necessary action.
a) Development of Sinnar-Nashik section of NH-50 in the State of Maharashtra with 4-lane
through DBFOT IBOT (Toll)] basis.
b) Development, Operation and Maintenance of Hanumangarh to Abohar section of SH-7A
(up to Punjab border) through PPP on DBFOT Toll basis.
Encl: as above
(Nitish Saini)
Assistant Director (Infta)
Tel No. 23095158
1. Dr. Arunish Chawla, Joint Secretary, Department of Expenditure, North Block, New
Delhi.
L. Shri Praveen Mahto, Adviser (PPP/PAMD), Niti Aayog, Yojana Bhawan, New Delhi.
aJ. Shri R.K. Singh, Joint Secretary, \4inistry of Road Transport and Highways, Transport
Bhawan, New Delhi
4. Chief Engineer (NH), Maharashtra PWD, Rashtra Maha Marg, Konkan Bhawan, 5tn Floor,
Navi Mumbai- 400614.
5. Sh. D.B. Gupta, Additional Chief isecretary to Gover ent, Public Works Department,
Government of Raj asthan, Secretariat, Jaipur.
Copy to:
1.
Sr. PPS to Additional Secretary (In'vestment),
2.
PS to JS (Infra),
3.
PS to Director (Infra),
4.
PS to Director (PPP),
DD (PPP) for uploading on pppinirLdia.gov.in website.F. No, 311212016- PPP
Government of India
Mini:stry of Finance
DePartment of Economic A1 irs
nfrastructure Section
I
Em porrruered I nstitutionr
for the
Scheme for Financ;ial Support to lPublic Private P:rrtnerships in lnfrastructure
74th Meeting held on October 6, 2016
Record hlote of
The 74h meeti:ng of the Empowered Institution (EI), chaired by Additional
Secretary (Investmrent), Departmen.t of Economic Affairs (DEA) was held on October
6,2076. The list of participants is attached.
The EI noted that there were two road sector proposals for consideration for
approval of viability gap funding (VGF) under the Government of India's Scheme
for Financial Support to Public Pri.rate Partnerships in Infrastructure (VGF Scheme):
a proposal from lvlinistry of RoaLd Transport and Highways (MoRTH) for final
approval and anc,ther proposal lirom Government of Rajasthan for in-principle
approval.
The EC noted that the Scheme for Support to P'PPs in Infrastructure prescribes
that VGF up to Rs. 100 Crore for each project may be sanctioned by the Empowered
Institution (EI), proposals for VGF up to Rs. 200 Crore may be sanctioned by the EC,
and amounts exceeding Rs. 200 Crore may be sanctioned by the EC, with the
approval of the FinLance Minister.
Hig
A. Road sector proposal from Mirristry of Road Tr:rnsport and ays
P.roposal from Giovernment of M.inistry of Road Transport and
Highways (MoRTH) for gr t of :final approval forr Development of Sinnar-Nashik
section of NH-50 (from krr-177.000 to km 201.350) in the State of Maharashtra with 4-
lane through PPP on DBFOT IBOT (Toll)l basis.
Project Details: Length: 25.31 Km.; Total Proiect Cost Rs. 312.96 Crore;
Concession Period: 18 years inclrrding 2 years of construction period-
Major development works/ structur,es: Major Bridge: 1 I'1o., Minor Bridges: 16 No.s, Major
|unctions: 9 No.s, lMinor Junctions: 16 No.s, Bypass at Sinnar of length 9.50 km, VUPs: 9 No.s,
PUP:4 No.s, Culverts:90 No.s, Service Road: 23.97krn. Toll Plaza: 1 No. at 193.90 km.
VGF sought Rs 12-0.51 Crore (38.51o1, of TPC of Rs. 312.96 Crore) of which 20% i.e. Rs 62.592
Crore would be paid as VGF suPport from Ministry of Finance.
74th meeting of Empowered Institutiory October 6,2016
Record of Discussion Pagel of7
a2. Joint Secr etary (Infra) informerJ the EI that the Project with TPC of Rs 312.96
Crore with maximum admissibler VGF of Rs 725,.184 Crore $0% of TPC) was
approved by PPPITC in its 48th meeting held on 1.3.12.2011 d by the Empowered
Institution (EI) in il.s 36th meeting held on 01'.12.201I.
3. ]oint Secretary (Infra) further stated that RfQ for the Project was issued on
08.08.2009 with VG]F of Rs 120.51 Crore, or 38.51.% of T'PC, letter of award was issued on
15.02.2013. The Selected Bidder has formed an SPV which executed the Concession
Agreement with Govemment of Mzrtrarashtra (GoM) on 31.07.201,3. Appointed Date of
the Project is 30.04.20L5. Delay in notification of Appointed Date has been stated by
authority to be on account of dellay in handing over of land due to High Court
orders and also delay in financial closure. As per the executed Concession Agreement,
construction period is 2 years.
4. Joint Secr etary (Infra) also statr:d that based on site requirements on account of
development of the Project influerrce area in the int;ervening period, local demands
and for providirLg safer improved services to the users, State P\AfD has
recommended change of scope of tlae Projecf which was recommended by SFC for
approval of the Competent Authority in its meeting held on 28.07.201,6, increasing
the TPC by Rs 34.62 Crore or 77.06"/o of original TPC. As per the Concession
Agreemen! cost c>f change in scope up to 0.25% of TPC is to be borne by the
Concessionaire and balance would be reimbursed by the Authority. The
Concessionaire has agreed to execuLte the proposed change in scope.
5. Joint Secretary (Infra) stated that reasons may be provided by the State for delay
in seeking final approval by EI (by over 17 months from AD); how the work can be
completed by 30.4.2077 when land is still not fully provided; and how the Project
despite increase in TPC by 11..06% is viable with thr: same VGF which is over three
years old.
6. The Chair desired to know in detail the reasons for delay in notifying Appointed
Date. Superintendent Engineer, Public Works Department (PWD), Government of
Maharashtra stated that over 200 faLrmers had approached the court of law regarding
procedural flaw in land acquisition by Competent Authority for Land Acquisition
(CALA) and the court had stayecl the acquisition for over 18 months. The Chair
enquired whether land was not available at the time of signing the contract.
Superintendent Engineer, PWD, Maharashtra replie<l that 3 (D) for over 80% of land
acquisition was complete at the time of signing of the Concession Agreement
however the process was chatrlenged in the court and hence the delay.
7. Joint Secretary (Infra) asked for the reasons for derlay in submission of documents
final
for proval by EI, even aftt:r the notificatiorL of Appointed Date. Executive
Engineer, PWD, Maharashtra replied that even afte:r the Appointed Date there had
been protests by farmers resulting; in the doubts rr:garding ac isition of balance
74th meeting of Empowered Institutiory October 6,2:.016
Record of Discussion Page 2 of 7
vportion of the land and peaceful possession of the $ame. Owing to this, the lenders
were hesitant to complete the forrnalities for disbu.rsal. Now the issues are sorted
out with the farme.rs and GovernmLent of Maharashtra has approached DEA for final
approval.
8. The Chair desired to know whether the project is still viable at the same cost as
the bid was received in 201.3 and r,vhether the Concr:ssionaire is still willing to carry
out the work at the same cost. Executive Engineer,, PWD, Maharashtra stated that
the Concessionaire has not demanded arry corrLpensation on account of cost
escalation. Joint Secretary (Infra) asked whether this implies that the cost was
overestimated at the time of biddirrg. Superintendent Engineer, MORTH stated that
the cost of material has marginally decreased in the .[ast two years. Schedule of Rates
(SOR) of various regions have also just marginally changed. This explains why the
Concessionaire is v,'illing to carry out the work at the same cost.
9. Advisor, NITI Aayog asked whether construction would be completed on
Scheduled Date of completion2g.0'4.2017. Superintendent Engineer, PWD stated that
as per Statutory Auditor's reporf 37.02% work har; been completed on29.04.201.6
which satisfies the Project Milestone-2 as per the erecuted Concession Agreement.
Progress of construction is satisfactory and is expected to be completed on the
Scheduled Date of completion. Thre Chair asked whether there could be the risk of
Concessionaire not completing thre construction after disbursement of VGF. Joint
Secretary (Infra) clarified that VGF disbursal is pari passu with the lender's disbursal
and after full equifiz investment.
10. All members of EI were in support to grant final approval for VGF support to the
Project subject to the conditions that PWD, Government of Maharashtra would
ensure that the Project is completed on time and there would not be any extra
compensation to the Concessionaire towards cost-ov,errun.
11. The EI granted final approval to the Project "I)evelopment of Sinnar-Nashik
section of NH-50 (from km 177.0001 to 201.350) in the State of Maharashtra with
4-lane through PPP on DBFOT IBOT (Toll)l basis" for TPC of Rs 312.96 Crore
(with TPC of Rs 355.85 Crore as per the lenders' appraisal) with total VGF support
of Rs l2O.51Crore (38.51% of TP(3) of which 2O"h i.e. Rs 62.592 Crore would be
financed under the Government of India's Scheme for Financial Support to PPPs
in Infrastructure (VGF Scheme). llhe Approval is srubject to conditions that PWD,
Government of Maharashtra would ensure that the f'roject is completed on time and
there would not be y extra cornpensation to the Concessionaire towards cost-
overrun.
74th meeting of Empowered Instituiion, October 6,201,6
Record of Discussion Page 3 of 7B. Road sector proposal from Government of Rajasth
principle approval for Deverlopment, Operation d Maintenance of
Hanumangarh to Abohar section of SH- (up to Punjab border) through PPP on
Design, Build, Finance, Operate and Transfer (DBFOT) Toll basis.
Project Details: Length: 42.655 Km.; Total Project Cosh Rs. 51.50 Crore;
Concession Period: 19 years inclrrding 1 year of construction period.
Major development works/ structures: Minor Bridges: widening: 4 No.s, repairs and
strengthening: 1 No., Culverts: widening: 12 No.s, r(sconstruction: 20 No.s, At-grade
intersections: 19 l,lo.s, Longitudinal drains: 4 No.s, TolL Plaza: 1 No. at km 28.300, Bus
shelters: 7 No.s.
VGF sought Nil. However, actual VCIF would be based orrcompetitive bidding process.
11. Joint Secretary (Infra) informed the EI that the Project for Developmenf
Operation and Maintenance of Hanumangarh to Abohar section of SH-7A (up to
Punjab border) has total length of 42.655 km wotrld be developed by providing
overlay and by widening and re;pairs of existing road including minor bridges,
culverts etc. TPC of:the Project is Rs 51.50 Crore.
12. Additional Chief Engineer, PIND, Government of Rajasthan (GoR) made a
presentation on the Project proposal and explainecl that the project road starts at
Hanumangarh town which is urbzrn habitat and the first B kilometres of the road
adjacent to the town has spill-over of urban agglomeration resulting in more traffic
of 2-wheelers, 3-wheelers and non.rn otofized vehicles.
13. Joint Secretary (Infra) enquirec[ why the proposed Concession Period was
2'J,
years while the projected traffic would exceed its dersign capacity in year 2035-36 as
per the feasibility reporf i.e., the 79th year, assuming 2077-18 as the Construction
year and based upon the average of traffic survey provided by the authority at kms
8 and 28. Additional Chief Engineer, PWD, Gotrl stated that the traffic at the
proposed tollplaza at km 28.300 v,'ould exceed the design capacity in27"t year and
not in the 19h yearr. joint Secretarlg finfra) desired 1,o know why the traffic survey
was conducted atKm 8.000 and r,rrhether traffic profile of the o locations of the
survey is significantly different oraring to any leakalges. Additional Chief Engineer,
PWD, GoR explained that the traffic profiie is different because of vicinity to urb
area in the first 8 kilometres arnd that o int3rsecting roads connecting to
Kishangarh and Sa,ngaria start at ar.ound Km 3.000.
74th meeting of Empowered Institution, October 6,2016
Record of Discussion
Page 4 of 714.JontSecretary (Infra) stated that since it is projer:ted that the first stretch (i.e., till
km S) will exceed capacity by the 79th year, and user discomfort will require capacrty
increase, it is unclear how a 21. year concession for the whoie length will be
addressed. Superintendent Engineer, MORTH also stated that though the traffic at
toll plaza does not exceed the design capacity of 15,000 PCUs in 21' years, it is not
clear why Z-lane plus paved shoulder (PS) has not been proposed and just the
development by o.izerlay has been proposed. Additional Chief Engineer, PWD, GoR
stated that it is as per the transport policy of Government of Rajasthan.
Superintendent ErLgineer, MORTF{ stated that though as per the policy it may be
admissible, safefy ,tf the traffic has to be taken into aLccounf especially in the vicinity
of urban area whLere significant traffic is of 213 - wheelers and non-motorized
vehicles, paved shoulder is necessary so that main carriageway is not blocked. The
Chair enquired about the incremental cost if paved shoulder is provided- Additional
Chief Engineer, PWD, GoR stated that it would be around Rs 1 Crore per kilometer
extra which means that the TPC would double. Furl.her, there are hard shoulders on
that section of the rroad though not paved shoulders,
15. Since the Add.itional Chief ErLgineer, PWD, GrtR stated that an ROB is to be
constructe d by the State under Clentral Road Fun,l (CRF) scheme, Chair asked if
there was any risk of delay in the work as it wouldl affect the proposed concession.
The State responded that it will ensure there is no rlelay on account of construction
of ROB and State will also ensure the synchronization of ROB with the project in the
Concession Agreement itself .
16. The Chair asked why the Concession Period should not be reduced to 79 years.
Additional Chief Eingineer, PWD, GoR stated that the project is viable without VGF
grant for 27 years' Concession Period. For L9 years, it may require grant depending
on Corhpetitive bidding. Additional Chief Engineer, PWD, Rajasthan stated that the
project was conceived on the basis of suo motu proposal for deveiopment of the
project with 20 years concession period, offering prr:mium. While suo motu proposal
was not considered, the project is now proposed to be bid-out on VGF as a bid-
parameter. Advisor, NITI Aayog suggested that r:onsidering safety of the traffic
either the Project nnay be redesigned with paved shoulders or the Concession Period
may be reduced.
74ft meeting of Empowered Institutiory October 6,20L6
Record of Discussion Page 5 of 7
d
yq17' After considering the views of the EI, Governme.t of R asthan to reduce
the Concession period to 19 years.
lopment,
operation and Maintenance of Ha,numangarh to Abohar section of sH A(
___ _ _>Drvr. vl to
/(fD'lDBl;nrFr OT) hT orliI r basis in the state oI' Raiasthan th vGF, ...,,.,+-*.,,+:^ri sfer
per VGF
a'
Concession period would be reduce d. to 79 years from the
21
years.
b'
GoR shall obtain
crearan,ces such as environment and forest arance
before commencing the work for project site.
c'
GoR shat obtain prior ap,proval of EI on any change in Tpc, scope of
work or project configuratiorL
as noted above.
The meeting ended with vote of thanlks to the Chair.
eting of Empowered Institutiory October 6,2016
of Discussion
o"'l
6of7E
owered Institution (EI) for
Scheme to to PPPs in in
s c
74th Meeting on
6th 2016
I.
1.
2. . Sharmila Chavaly, jS (Infra)
3. Mr. Nitish Saini, Assistant Di (Infra)
II. NITI Aavog
4. Mr. Praveen Mahto, Advisor
ru.
5. Mr. Rajiv Wadhawan,
Ioint
ry.
6. Mr. Sanjeev Kumar,
SE
7. Mr. R.P. Panda SE
V.
8. Mr. R.P. Nighof
SE
9. Mr. Y.A. patil,
EE
u.
Government of Raiasthan
Anoop
10. Mr. lshreshtha
ACE
71.
eting of Empowered Institutiory October 6,2016
of Discussion