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Public Private Partnership means an arrangement between a government or statutory entity or government owned entity on one side and a private sector entity on the other, for the provision of public assets and/ or related services for public benefit, through investments being made by and/or management undertaken by the private sector entity for a specified time period.
PUBLIC PRIVATE PARTNERSHIP
CASE STUDY: AMRITSAR INTER-CITY BUS
THE OBJECTIVES OF PPP IN INFRASRUCTURE
• Increase the availability of infrastructure services
• To do so with greater efficiency (lower cost for the
level of services provided) than could be achieved
using the traditional public sector approach
WHAT IS PUBLIC PRIVATE PARTNERSHIP?
THE DEPARTMENT OF ECONOMIC AFFAIRS (DEA) DEFINES PPP AS:
“PPP means an arrangement between a government or statutory entity or government owned entity on one side and a
private sector entity on the other, for the provision of public assets and/ or related services for public benefit, through
investments being made by and/or management undertaken by the private sector entity for a specified time period,
where there is a substantial risk sharing with the private sector and the private sector receives performance linked
payments that conform (or are benchmarked) to specified, pre-determined and measurable performance standards.”
The private sector is responsible for
carrying out or operating the project and
takes on a substantial portion of the
associated project risks.
3CHARACTERISTICS OF PUBLIC PRIVATE PARTNERSHIP
During the operational life of the project the
public sector’s role is to monitor the
performance of the private partner and enforce
the terms of the contract.
The private sector’s costs may be recovered in
whole or in part from charges related to the use
of the services provided by the project, and
may be recovered through payments from the
Public sector payments are based on
performance standards set out in the contract.
Often the private sector will contribute the
majority of the project’s capital costs,
although this is not always the case.
CHARACTERISTICS OF PUBLIC PRIVATE
THE USE OF PPP FOR INFRASTRUCTURE PROJECTS SHOULD ONLY BE CONSIDERED WHEN:
• THE PUBLIC SECTOR ENVIRONMENT IS SUITED TO SUPPORTING PPPS.
• THE PROJECT IS SUITABLE TO BEING CARRIED OUT AS A PPP.
• THE POTENTIAL BARRIERS TO SUCCESSFUL PROJECT IMPLEMENTATION HAVE BEEN IDENTIFIED AND CAN BE OVERCOME.
• GIVEN THAT THESE CONDITIONS ARE SATISFIED, THE PROJECT MUST BE COMMERCIALLY VIABLE FOR THE PRIVATE SECTOR AND
OFFER VALUE FOR MONEY (VFM) FOR THE PUBLIC SECTOR.
WHEN SHOULD PUBLIC PRIVATE PARTNERSHIP BE USED?
Phase 1: PPP identification.
Phase 2: Full feasibility study, PPP preparation, and clearance.
Phase 3: PPP procurement.
Phase 4: Contract management and monitoring
PUBLIC PRIVATE PARTNERSHIP PROCESS
6CASE STUDY: AMRITSAR INTERCITY BUS TERMINAL PROJECT
Inter-city Bus Terminal
Grand Trunk Road
Amritsar city is the spiritual centre for the Sikh community and a
hub for trade related activities in the region.
Given the religious heritage of the city, Amritsar attracts large
number of tourists who visit the Golden Temple.
The proximity of Amritsar to the Wagah (India-
Pakistan) border has also provided an opportunity for
it to develop as a trading centre for cross border
A significant section of the local population uses
public transport such as buses for movement across
Fig: Inter city Bus Terminal of Amritsar
The existing bus terminal of
Amritsar city, which functioned as
an intercity terminus, was
established in 1965 on the G.T. Road
and is spread over 8.5 acres.
As per the bus schedules drawn up by the
Department of Transportation (DoT),
Government of Punjab (GoP), there were as
many as 1,800 to 2,000 bus arrivals per day
at the Amritsar bus terminal.
The DoT, GoP facilitated by the Punjab Infrastructure Development Board (PIDB) decided on modernising and developing
the existing Amritsar bus terminal through the Build, Operate, Transfer (BOT) route.
The project is under operation by a private operator for a period of 11 years and 5 months, which includes the construction
period. At the end of the concession period, the project will transfer back to the concessioning authority free of all
8PUBLIC PRIVATE PARTNERSHIP STRUCTURE OF THE PROJECT
Through a two stage bidding process, DoT, GoP awarded the contract to Rohan Rajdeep Infrastructure (a partnership
between Rohan Builders (India) Pvt Ltd., Rajdeep Buildcon Pvt Ltd) to undertake the development and operation of a
modern bus terminal at Amritsar on a BOT basis.
Under the concession agreement, the private operator was responsible for finance,
building, operations and maintenance of the Amritsar Intercity Bus Terminal
complex for a concession period of 11 years and 5 months.
The private operator was required to pay a project development fee of Rs 35
lakhs for the project site lease and a lease rental of Rs 50,000 per month for
use of the project site over the concession period.
Within the concession agreement, two potential revenue streams for the private
operator were identified. The first revenue stream was through the operations of
the bus terminal.
The second source of revenue was commercial rentals from shops located within
the Intercity Bus Terminal complex. Other sources of revenue included the sale of
advertising rights as well as parking fees.
9PUBLIC PRIVATE PARTNERSHIP PROCESS
CONDITIONS PRECEDENT PERIOD
The concessioning authority was required to do:
• Temporaryshifting of the existing bus terminal to
a different location.
• Transfer of land from the Amritsar Municipal
Corporation to Government of Punjab and
thereafterpossession under a lease to the private
• Authorising the private operatorto collect“adda
fees” from buses using the Intercity Bus Terminal.
The private operator on his part was required to:
• Obtain all necessary clearances and approvals.
• Pay the projectdevelopmentfee of Rs. 35 lakhs to
the concessioning authority.
• Within 30 days of receiving the notice of
commencement, the private operatorwas
required to mobilise resources to undertake
• The private operator was required to prepare,
maintain and get necessary approvals of the
detailed drawing regarding the project design.
• The construction was required to be completed
within 18 months of commencement.
• Necessary tests were carried out by the
concessioning authority prior to issue of
10IMPLEMENTATION FRAMEWORK OF THE PROJECT
Lease of commercial
Night Parking fees
• Design & Construction of
• Operation including deploying
of adequate staff
• Traffic and movement
management & Planning
Concessionaire: Rohan Rajdeep
Infrastructure Pvt. Ltd.
Handover of land
Extra contractual guarantee for ensuring demand through
directive to all bus operators to use the facility
on the board
on the board
11DELIVERY OF THE PROJECT EXIT OF THE PROJECT
At the end of the concession period all
immovable and movable property relating to the
project will transfer to the concessioning
authority, free of all encumbrances.
The concessioning authority will issue a vesting
certificate as proof of transfer of all rights, titles
and interests in the Amritsar Intercity Bus
Terminal assets and facilities.
The Amritsar Intercity Bus Terminal construction was
completed and commissioned in October 2005.
The Intercity Bus Terminal includes 53 embarkation and 8
disembarkation bays covering long distance and local
bus routes. The Terminal has parking provision for 54
cars, 102 rickshaws/autos and 1838 two-wheelers /
cycles and 300 passenger seating berths.
The private operator had the right to levy, collect, retain
“adda fees” from all buses using the Intercity Bus
For the duration of the concession period, the private
operator had to pay a monthly lease rental of Rs 50,000 to
the concessioning authority for lease of Intercity Bus