Budget wishlists

Here are few news items listing out wishes of Infrastructure sector in India

Indiainfoline : http://www.indiainfoline.com/Markets/News/Cox-and-Kings-seeks-infra-status-for-Travel-and-Tourism/4775684606

1. Infrastructure status for travel industry ( i guess they are looking for famous 80-I B (10)  tax exemptions)
2. PPPs in travel sector
3. Reduction in service tax

Hindu : http://www.thehindubusinessline.com/2010/02/14/stories/2010021451510400.htm

1. Realtors want tax exemptions
2. Fiscal incentives for green buildings
3. Definition for affordable housing

Economic Times : http://economictimes.indiatimes.com/Opinion/Expectations-Pre-Budget/Infrastructure-sector-expectation-from-Budget-2010/articleshow/5557618.cms?curpg=2

1. Tax incentives
2. Emphasis on PPP
3. Single window clearance.

Clear emerging theme is tax incentive. I think someone has suggested that commercial lenders to infrastructure projects should also be given tax breaks!!

New entrant in water sector PPPs- Manila water and Jindal joint venture

This is interesting news for states which are working towards creating PPPs in water sector. One more private sector player means better competition and hence (maybe) better service delivery.

Manila Water Company has signed a joint venture agreement with Jindal Water Infrastructure Limited (JWIL) to jointly develop new water businesses in the states of Rajasthan, Gujarat and Maharashtra in India.
In a disclosure to the Philippine Stock Exchange (PSE), MWC said the agreement will embody their commitments to develop new businesses in the field of water supply, wastewater and other environmental services.
Under the agreement, MWC and JWIL will form a joint venture company to serve as a vehicle for the planning and development of projects in the said three states in India.
Key management officers of both parties shall compose the joint venture firm’s management and project team where business development initiatives will be carried out through a pre-agreed development budget.
The New Delhi-based JWIL is part of the O P Jindal Group, one of India’s largest business houses. JWIL was formed as a service company to focus on designing sustainable and innovative solutions in water and wastewater management.
“Through this partnership, Manila Water and JWIL seek to leverage on key strengths and core competencies and eventually provide synergies in establishing a regional presence in India,” MWC said.
Manila Water earlier signed a development agreement with REE Corporation and Mitsubishi Corporation to study and evaluate private participation in water, wastewater and other environmental services projects in Vietnam.
MWC said the studies will have particular focus on Ho Chi Minh City and its surrounding areas. The move is part of its plans to expand its business in Vietnam.
Based on Ho Chi Minh City, REE Corporation is one of the largest mechanical and civil engineering groups incorporated in Vietnam.

Source : http://www.mb.com.ph/articles/242644/manila-water-inks-india-joint-venture

8 Lane Access Controlled Upper Ganga Canal Expressway

RFQ has been floated by U.P. Expressways Industrial Development Authority (UPEIDA) 08-lane Access Controlled Expresswayon the Right Bank of Upper Ganga Canal from Sanauta Bridge in Greater Noida, Dehra near Eastern Peripheral Expressway to Uttar Pradesh-Uttarakhand Border (10 km before the Border near Tughlaqpur).

Project Development Consultant :  M/s IL&FS Infrastructure Development Corporation Ltd.
RFQ Submission Date : 03.03.2010

eMigrate RFP

Ministy of Indian Overseas Affairs is planning to implement eMigrate (egovernance in emigration) in PPP mode. Here is the RFP advertisement.
Last Date of Submission : 8/2/2010

RFP for Bhawali AYUSH gram

Government of Uttarakhand has been vocal about its commitment to traditional medicine systems of the country which is often referred to as AYUSH. In this effort Government has planned to establish AYUSH grams in each of the 13 districts of the state.

AYUSH Gram as a model of AYUSH health system which shall provide :

•  Healthy life style for prevention of deseases
• Treatment of desease by AYUSH ( Ayurveda, Yoga, Unani, Siddha & Homeopathy)
• Preservation and protection of fast vanishing extinct Medicinal Plant
• Protection of Environment
• Employment generation
• Revenue Genration

First such AYUSH gram shall be implemented in PPP mode and Bhawali has been chosen as the location for this.

For the design of the AYUSH gram, following are the main activity zones for which the design and construction needs to be planned:

1) Hospital and Wellness Center (100 beds minimum) and

Residential Complex for Staff

2) Drug manufacturing unit and Pharmacy

3) Ayurvedic Museum

4) Tourist Facility

5) Hotel

6) Independent Cottages

7) Yoga Centre

8) Herbal Garden

Details of the RFP can be downloaded from :  RFP for Ayush Gram in Bhawali (983.87 kB 2010-02-01 12:10:10)

GMVN Limited Uttarakhand PPP projects for O&M of factories

Garhwal Mandal Vikas Nigam ( GMVN) is enterprise of Government of Uttarakhand. GMVN is planning to offer two of its factories for Operation and Management in PPP mode.

1. Rosen and Turpentine Factory : This factory is situated at Tilwara in Rudraprayag district. This factory was producing rosin & turpentine oil, procuring its full requirement of Resin (a forest produce) from the Forest Department and was running in profit till 2003-04.

Detailed EOI document : EOI for Operation and Management of Rosin and Turpentine Factory (138.82 kB 2010-02-02 12:12:21)

2. Flushdoor Factory : This factory is situated at Kotdwar in Pauri district. This factory was  engaged in the manufacturing of flush door, block board and plywood in its manufacturing unit at Kotdwar, Uttarakhand. The unit has all the required machinery for peeling, chopping, stacking, drying, hot

pressing, sanding, molding and other related processes for the manufacture of flush door, block board and plywood.

Detailed EOI document : EOI for Operation and Management of Flush Door Factory (139.49 kB 2010-02-02 12:13:28)

Last Date of receiving EOIs : not later than the 15:00 hours IST 5th March 2010

Would CAG's involvement help or hurt PPPs?

Here is Sunil Jain's article in Business standard on this tricky issue of government audit on PPPs. Any audit which helps achieve the objective of PPP should be helpful but audits which act as deterrent to positive action which is the key principle behind adoption of PPPs maybe unwelcome for all practitioners of PPP.

Few Excerpts :

It’s easy to sympathise with this view given how, often enough, CAG reports do focus on trivia — I have seen CAG reports where, for instance, yearly “losses” for 15-20 years have been simply added without even simple discounting; such examples can be multiplied manifold. But what needs to be kept in mind is that, equally often, the CAG does bring out huge scandals — indeed, the scandal here is that the legislature blithely ignores most CAG reports. The CAG report on how the VDIS black money scheme was badly abused, for instance, is a masterpiece of investigation. Similarly, in the case of the privatisation of the Delhi Vidyut Board (DVB), the CAG pointed out there was a Rs 3,108 crore difference between the figure of total receivables depicted in DVB’s balance sheet and that worked out by the consultant! Neither report was used by legislators. But this is not the time to examine the CAG’s record — those interested can read business-standard.com/210204/ for a fuller exposition.

The issue here is different. It is of how PPPs have become a byword for crony capitalism of the worst type. Whether it is the airports at Delhi or Bangalore, or the Nhava Sheva port, the DVB privatiation … the same sets of issues of poor tendering, allowing tender conditions to be changed at will and allegations of massive padding of costs crop up regularly. This is what it is hoped the CAG’s audit process will help fix.

Even though corruption is not something to be ignored, if the matter was “just” a moral one, it could be ignored. The problem, however, is that the kinds of deals being struck are so blatantly one-sided, it has begun to slow down the projects themselves. How many years after the Enron scandal was unearthed did it take for the country to start putting back its faith in private power developers? How many state electricity boards got privatised after the DVB scandal where it was found, despite everything, power tariffs just kept going up. Essentially, after the scandals get unearthed, this frightens both officials and politicians from pressing too hard on new PPP projects — how do you push an airport privatisation if you see, as in Bangalore, that the owners of the project are awarding contracts to themselves and that these costs are resulting in significantly higher tariffs for passengers? The high level of favouritism also results in the better players staying away.

The guidelines issued by the CAG indicate it is conscious of not taking just the narrow audit perspective. The guidelines, for instance, talk of the PPP audit being similar to “performance audits” done by CAG as opposed to financial audits: “the important principle is to bring out … what have been achieved rather than how it was achieved.” In other words, the CAG is promising to look at the big picture, the costs and benefits at the overall level instead of the minutiae of each sub-component of a project. The CAG audit of the Reliance Industries’ KG Basin project, for instance, is going to focus on tendering procedure, related-party transactions and things like that instead of looking at the per piece price of each equipment.

More at Source :  http://www.business-standard.com/india/news/sunil-jain-getting-ppps-backtrack/383531/