Structure of the Project

Introduction :

The project structure will primarily based on the scope of the project. The main relationship and core element of the project structure is the agreement or contract between the Authority and the Private Partner. It is developed by the authority and regulates the rights and obligations of the private partner to whom the development and management of the infrastructure will be delegated or contracted out. The project structure will also reflect the financial structure, risk structure etc.

Description :

1. Finalisation of Project Structure:

(a) Based on the report submitted on the objections and suggestions as per Regulation 13(4) of TNIDB Regulations, 2013, If the Board is of the view that the information provided is not adequate, it may cause for a Detailed Project Study to be submitted.

(b) Based on the project studies, the Board should decide whether the project is to be implemented in the public sector mode or PPP mode. Even where it is to be implemented through the public sector, TNIDB can decide which public sector agency will implement the project.

(c) Based on the project studies the Board will direct the Executive Committee to finalize the scope and structure of the project either in its original form or with such modification, as it deems fit, also taking into account, the following aspects, namely:-

i. whether the Project needs any public financial support, and if so, the appropriate form of such support;

ii. the tender criteria or variables relevant for evaluation of the tender; and

iii. the appropriate concession agreement or a combination thereof, from out of those listed in Schedule II.

(d) Once the mode of implementation is decided, the Board can decide on the extent and mode of Government support for PPP projects. This will also have a bearing on the type of concession and the tender process.

2. PPP Models Salient Features:

A. Investment or Financing related Agreements:

Model	Asset ownership during contract	Capital investment responsibility	Private partner revenue Sources	Private partner role	Asset Transfer
Build-Operate-Transfer (BOT)	Public	Private	Tolls, fees, rentals and other charges	Finance, Construct, O&M, Transfer	Yes
Build-Own-Operate (BOO)	Private	Private	Tolls, fees, rentals and other charges	Finance, Construct, Own, O&M	No
Build-Own-Operate-Transfer (BOOT)	Private	Private	Tolls, fees, rentals and other charges	Finance, Construct, Own, O&M, Transfer	Yes
Build-Transfer-Operate (BTO)	Public	Private	Tolls, fees, rentals and other charges	Finance, Construct, Transfer, O&M	Yes
Design-Build-Finance-Operate- Transfer (DBFOT)	Public	Private	Tolls, fees, rentals and other charges	Design, Build, Finance, O&M, Transfer	Yes

B. Operations and Maintenance Related Agreements:

Model	Asset ownership during contract	Capital investment responsibility	Private partner revenue Sources	Private partner role	Asset Transfer
Management Agreement	Public	Public	Management Fee from Government	Management of all aspects of operation and maintenance	No
Lease Management Agreement	Public	Public	Fees, rentals and other charges from Users	Lease and O&M	No
Build-Lease-Transfer (BLT)	Public	Private	Fees, rentals and other charges from Users	Construct, Finance, Lease, O&M and Transfer	Yes
Rehabilitate - Operate - Transfer (ROT)	Public	Private	Fees, rentals and other charges from Users	Invest, Refurbish, O&M and Transfer	Yes
Rehabilitate –Own - Operate (ROO)	Private	Private	Fees, rentals and other charges from Users	Invest, Refurbish, Own and O&M	No

Relevant Clauses:

TNID Act 2012
Schedule II	Nature of Concession Agreements 1. Investment or Financing related Agreements (i) Build Operate and Transfer (BOT): A contractual arrangement whereby the concessionaire undertakes the construction, including financing, of a given infrastructure facility, and the operation and maintenance thereof. The concessionaire operates the facility over a fixed term during which they are allowed to charge the users appropriate tolls, fees; rentals and charges as incorporated in the contract to enable the recovery of investment in the Project. The concessionaire transfers the facility to the Government at the end of the fixed term that shall be specified in the Concession agreement. (ii) Build-Own-and-Operate (BOO): A contractual arrangement whereby the concessionaire is authorized to finance, construct, own, operate and maintain an infrastructure or development facility from which the concessionaire is allowed to recover the total investment by collecting user levies from facility users. The ownership of the land will be vested with the Government. Under this mode, the concessionaire owns the assets of the facility and may choose to assign its operation and maintenance to a facility operator. The transfer of the facility to the Government is not envisaged in this structure; however, the Government may terminate its obligations after the specified time period. (iii) Build-Own-Operate-Transfer (BOOT): A contractual arrangement whereby the concessionaire is authorised to finance, construct, maintain and operate a Project and whereby such Project is to vest in the concessionaire for a specified period. During the operation period, the concessionaire will be permitted to charge user levies specified in the Concession agreement, to recover the investment made in the Project. The concessionaire is liable to transfer the Project to the Government after the expiry of the specified period of operation. (iv) Build- Transfer-and-Operate (BTO): A contractual arrangement whereby the Government contracts out an infrastructure facility to the concessionaire to construct. the facility on a turn-key basis, assuming cost overruns, delays and specified performance risks. Once the facility is commissioned satisfactorily, the concessionaire is given the right to operate the facility and collect user levies specified in the Concession agreement. The title of the facilities always vests with the Government in this arrangement. (v) Design-Build-Finance-Operate- Transfer (DBFOT) - A contractual arrangement whereby the concessionaire is bestowed with the responsibility of designing, building, financing and operating the facility before transferring the Project to the Government after the expiry of the specified period. The concessionaire operates the facility over a fixed term during which they are allowed to charge the users appropriate tolls, fees, rentals and charges as incorporated in the contract to enable the recovery of investment in the Project. 2. Operations and Maintenance related Agreements (i) Management Agreement: A contractual arrangement whereby the Government entrusts the operation and management of a Project to the concessionaire for the period specified in the agreement on payment of specified consideration. In such agreement, the Government may charge the user levies and collect the same either by itself or entrust the collection for consideration to any concessionaire who shall after collecting the user levies, pay the same to the Government.. (ii) Lease Management Agreement: A contractual arrangement whereby the Government leases a Project owned by it to the concessionaire which is permitted to operate and maintain the Project for the period specified in the contract. The concessionaire is allowed to charge the users appropriate fees, rentals and charges as specified in the agreement to enable the recovery of investment in the Project. (iii) Build-Lease-and-Transfer (BLT): A contractual arrangement whereby the concessionaire undertakes to finance and construct the Project and on its completion hands it over to the Government. The Government then gives the facility to the same operator on a lease arrangement for a fixed period, after which ownership of the facility is automatically transferred to the Government. (iv) Rehabilitate-Operate-and-Transfer (ROT) : A contractual arrangement whereby an existing facility is handed over to the concessionaire to invest, refurbish, operate and maintain for a period, at the expiry of which the facility is returned to the Government. The concessionaire operates the facility over a fixed term during which they. are allowed to charge the users appropriate fees, rentals and charges as specified in the contract to enable the recovery of investment in the Project. (v) Rehabilitate-Own-and-Operate (ROO) : A contractual arrangement whereby an existing facility is handed over to the concessionaire to invest, refurbish, operate and maintain the development facility from which the concessionaire is allowed to recover the total investment by collecting user levies from facility users. The ownership of the land shall be vested with the Government. The transfer of the facility to the Government is not envisaged in this arrangement; however, the Government may terminate its obligations after a- specified time period.

TNID Act 2012

Schedule II

Nature of Concession Agreements

1. Investment or Financing related Agreements

(i) Build Operate and Transfer (BOT): A contractual arrangement whereby the concessionaire undertakes the construction, including financing, of a given infrastructure facility, and the operation and maintenance thereof. The concessionaire operates the facility over a fixed term during which they are allowed to charge the users appropriate tolls, fees; rentals and charges as incorporated in the contract to enable the recovery of investment in the Project. The concessionaire transfers the facility to the Government at the end of the fixed term that shall be specified in the Concession agreement.

(ii) Build-Own-and-Operate (BOO): A contractual arrangement whereby the concessionaire is authorized to finance, construct, own, operate and maintain an infrastructure or development facility from which the concessionaire is allowed to recover the total investment by collecting user levies from facility users. The ownership of the land will be vested with the Government. Under this mode, the concessionaire owns the assets of the facility and may choose to assign its operation and maintenance to a facility operator. The transfer of the facility to the Government is not envisaged in this structure; however, the Government may terminate its obligations after the specified time period.

(iii) Build-Own-Operate-Transfer (BOOT): A contractual arrangement whereby the concessionaire is authorised to finance, construct, maintain and operate a Project and whereby such Project is to vest in the concessionaire for a specified period. During the operation period, the concessionaire will be permitted to charge user levies specified in the Concession agreement, to recover the investment made in the Project. The concessionaire is liable to transfer the Project to the Government after the expiry of the specified period of operation.

(iv) Build- Transfer-and-Operate (BTO): A contractual arrangement whereby the Government contracts out an infrastructure facility to the concessionaire to construct. the facility on a turn-key basis, assuming cost overruns, delays and specified performance risks. Once the facility is commissioned satisfactorily, the concessionaire is given the right to operate the facility and collect user levies specified in the Concession agreement. The title of the facilities always vests with the Government in this arrangement.

(v) Design-Build-Finance-Operate- Transfer (DBFOT) - A contractual arrangement whereby the concessionaire is bestowed with the responsibility of designing, building, financing and operating the facility before transferring the Project to the Government after the expiry of the specified period. The concessionaire operates the facility over a fixed term during which they are allowed to charge the users appropriate tolls, fees, rentals and charges as incorporated in the contract to enable the recovery of investment in the Project.

2. Operations and Maintenance related Agreements

(i) Management Agreement: A contractual arrangement whereby the Government entrusts the operation and management of a Project to the concessionaire for the period specified in the agreement on payment of specified consideration. In such agreement, the Government may charge the user levies and collect the same either by itself or entrust the collection for consideration to any concessionaire who shall after collecting the user levies, pay the same to the Government..

(ii) Lease Management Agreement: A contractual arrangement whereby the Government leases a Project owned by it to the concessionaire which is permitted to operate and maintain the Project for the period specified in the contract. The concessionaire is allowed to charge the users appropriate fees, rentals and charges as specified in the agreement to enable the recovery of investment in the Project.

(iii) Build-Lease-and-Transfer (BLT): A contractual arrangement whereby the concessionaire undertakes to finance and construct the Project and on its completion hands it over to the Government. The Government then gives the facility to the same operator on a lease arrangement for a fixed period, after which ownership of the facility is automatically transferred to the Government.

(iv) Rehabilitate-Operate-and-Transfer (ROT) : A contractual arrangement whereby an existing facility is handed over to the concessionaire to invest, refurbish, operate and maintain for a period, at the expiry of which the facility is returned to the Government. The concessionaire operates the facility over a fixed term during which they. are allowed to charge the users appropriate fees, rentals and charges as specified in the contract to enable the recovery of investment in the Project.

(v) Rehabilitate-Own-and-Operate (ROO) : A contractual arrangement whereby an existing facility is handed over to the concessionaire to invest, refurbish, operate and maintain the development facility from which the concessionaire is allowed to recover the total investment by collecting user levies from facility users. The ownership of the land shall be vested with the Government. The transfer of the facility to the Government is not envisaged in this arrangement; however, the Government may terminate its obligations after a- specified time period.

TNID Regulations 2013
Regulation 14	Project Structuring and Final Approval for Public Private Partnership Projects (1) Based on the report from the Sponsoring Agency under regulation 13, if the Board is of the view that the information available regarding the technical, economic, social or financial parameters of the project are adequate to proceed with Public Private Partnership procurement, it will direct the Executive Committee to finalize the scope and structure of the project. (2) In cases where the Board is of the view that the information is inadequate it may cause further detailed project study covering all or any specific aspects of the project for which further information is required and upon being satisfied with the further information provided, it will direct the Executive Committee to finalize the scope and structure of the project based on such further information. (3) In finalizing the scope and structure of the project, the Executive Committee shall subject to the provisions of rule12 of the Tamil Nadu Infrastructure Development Rules 2012 either approve of its own accord or secure the Board’s specific approval for the extent and form of public financial support for the project.
Regulation 15	(5) The sponsoring agency may with the prior concurrence of the Board issue a Request for Expression of Interest at any time and even the project scope and structure are finalized by the Board under section 17 of the Act. (6) The sponsoring agency shall issue the Request for Quotations only after the project scope and structure have been finalized by the Board under section 17 of the Act and the financial support from Tamil Nadu Infrastructure Development Fund, if any, is approved under rule 12 of the Tamil Nadu Infrastructure Development Rules.

TNID Regulations 2013

Regulation 14

Project Structuring and Final Approval for Public Private Partnership Projects

(1) Based on the report from the Sponsoring Agency under regulation 13, if the Board is of the view that the information available regarding the technical, economic, social or financial parameters of the project are adequate to proceed with Public Private Partnership procurement, it will direct the Executive Committee to finalize the scope and structure of the project.

(2) In cases where the Board is of the view that the information is inadequate it may cause further detailed project study covering all or any specific aspects of the project for which further information is required and upon being satisfied with the further information provided, it will direct the Executive Committee to finalize the scope and structure of the project based on such further information.

(3) In finalizing the scope and structure of the project, the Executive Committee shall subject to the provisions of rule12 of the Tamil Nadu Infrastructure Development Rules 2012 either approve of its own accord or secure the Board’s specific approval for the extent and form of public financial support for the project.

Regulation 15

(5) The sponsoring agency may with the prior concurrence of the Board issue a Request for Expression of Interest at any time and even the project scope and structure are finalized by the Board under section 17 of the Act.

(6) The sponsoring agency shall issue the Request for Quotations only after the project scope and structure have been finalized by the Board under section 17 of the Act and the financial support from Tamil Nadu Infrastructure Development Fund, if any, is approved under rule 12 of the Tamil Nadu Infrastructure Development Rules.