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Managing PPPs: Institutional Framework for Contract Management and Monitoring by MPRDC

Learn about the institutional framework and process for contract management and monitoring of Public-Private Partnership projects by Madhya Pradesh Road Development Corporation.

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Managing PPPs: Institutional Framework for Contract Management and Monitoring by MPRDC

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  1. MANAGING PPPsInstitutional Framework for Contract Management and Monitoring MPRDC 1 Connecting People Through Quality Infrastructure

  2. Madhya Pradesh Road Development Corporation • Incorporated as wholly owned State Govt. Company under • Companies Act 1956, in July 2004. • ‘Highway Authority’ for State Highway. • Upgrades, Constructs and Strengthens the total length of State • Highways. • Develops projects in the State on Public Private Partnership • basis. • The Hon’ble Chief Minister of Madhya Pradesh is the • chairman, Hon’ble Minister of Public Works Department & the Chief Secretary are the Vice Chairmen, the Principal Secretaries of the Finance dept., Forest Dept., Urban Administration & development and Mining Dept. are the members of the Board. • MD, MPRDC is also one of the director. MPRDC

  3. Our Projects Invite private investment by providing grant / premium to / by the concessionaire on competitive bidding MPRDC 3

  4. Our Projects MPRDC 4

  5. Our Projects: Cost Share in Crores of Rupees MPRDC 5

  6. Project Development MPRDC • Identification of project. • Feasibility Study- By feasibility Consultant selected through open bidding. • Financial Analysis- In house • Tender Documentation- based on Model documents. • Approval of SLEC- Chaired by the Chief Secretary GoMP. • Cabinet Approval. • Approval of VGF from Empowered Institution of GoI. 6

  7. Bidding MPRDC • Two stage bidding. RFQ & RFP • e-tendering. • Pre-bid Conference at each stage. • Tender Evaluation Committee- Chaired by Technical Advisor MPRDC. • Tender Committee- Chaired by the Chief Secretary GoMP. PS PWD, PS Finance & MD MPRDC are members. Approves the bid. • LOA is issued on the day on which bid is approved. 7

  8. Contract Milestones MPRDC • The Concession Agreement has to be signed within 45 days from the date of issue of LOA. • SPV is needed to be incorporated for signing the Concession Agreement. • Concurrence on the incorporation of SPV is accorded by MPRDC after examination by the Company Secretary. • Financial Closure within 180 days of signing of Concession Agreement. Upon failure, damages @0.1% of Performance Security upto120 days & 0.2% for further 80 days. 8

  9. Conditions Precedent to be fulfilled by Concessionaire MPRDC • Submission of Performance Security within 180 days from the date of signing of contract. • Execution of the Escrow Agreement. • Execution of the Substitution Agreement. • Procurement of all Applicable Permits relating to environmental protection and conservation of the Site. • Execution of Financing Agreement. • Legal opinion of the Legal Counsel on the concession. • Upon failure to meet Conditions Precedent, damages for delay @ 0.2 % of the Performance Security for each day, subject to a maximum of 20% of Performance Security. 9

  10. Conditions Precedent to be fulfilled by MPRDC MPRDC • Procurement of Right of Way to the site. • Procurement of Environmental Clearance. • Procurement of GAD from Railway. • Upon failure to meet Conditions Precedent, damages for delay @ 0.1 % of the Performance Security for each day, subject to a maximum of 20% of Performance Security. 10

  11. Pre-Construction Activities MPRDC Land Acquisition Environmental Clearances Approval of Designs Utility Shifting Mobilization of Man & Machinery at the site. 11

  12. Pre-Construction Activities MPRDC • 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. 12

  13. Financial Closure MPRDC Conditions Precedent are fulfilled before Financial Closure. State Support Agreement is executed amongst the State Government, MPRDC & the Concessionaire. Most of the projects of MPRDC have achieved Financial Closure in spite of nationwide scenario of Infrastructure sector wherein Financial Closures have become difficult. MPRDC facilitates Concessionaires to achieve Financial Closure. Appointed Date is the date of Financial Closure or the date of start of work which ever is earlier. Escrow mechanism is followed for all deposits & withdrawals. 13

  14. Milestones during Construction Period Project Milestone- I: 180th day from Appointed Date. Project Milestone- II: 365th day from Appointed Date. Project Milestone- III: 600th day from Appointed Date. Scheduled date for completion of Project is 730th day from Appointed Date. In the event of failure of achieving project milestone, damages payable is 0.1% of Performance Security until such milestone is achieved. MPRDC 14

  15. Monitoring during Construction • Monitoring of Project by Independent Engineer. • Appointed through open bidding as per Concession Agreement. • Regular monitoring by MPRDC officers. • Change of Scope & Extension of Time (EOT) • There is a Advisory Committee comprising of Technical Advisor, Chief Engineer (BOT), DGM (Technical), DGM (BOT), Concessionaire, Independent Engineer & Divisional Manager. • Advisory Committee examines the proposals of the Concessionaires & make the recommendations. • MD decides with the approval of BOD. MPRDC 15

  16. 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 Grade-I. • Layer -2 Close graded Grade-II. • WMM in place of WBM with pavers. • Use of Sensor Paver in place of mechanical paver for BT works. • Use of RMC plant in place of normal concrete mixers. MPRDC

  17. Dispute Resolution • Conciliation • Amicable settlement through mediation of Independent Engineer. • Referring the dispute to the Secretary PWD & the Chairman of BOD of the Concessionaire for amicable settlement. • Arbitration • Arbitration by a Board of Arbitrators. • There shall be a board of 3 arbitrators of whom each party shall select 1, and the 3rd arbitrator shall be appointed by the 2arbitrator so selected. • Arbitration in accordance with the rules of Arbitration. MPRDC 17

  18. Post COD Contractual Issues • Maintenance • Annual Maintenance Programme • Roughness Test & BBD (Benkelman Beam Deflection) Test • Monitoring by Chief Engineer(Maintenance) & Divisional Manager. • Road Data System • Penalty for non-compliance • Toll Collection- • MPRDC ensures toll collection with the help of District Administration. • Standardized software for automation • Premium/ O&M Grant • As per Concession Agreement. • Road Safety • Through Accident Response System. MPRDC 18

  19. Our Strengths MPRDC • 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. • Deployment of capable construction agencies with introduction of advance machineries and equipments. • Adequate Budget provision for Annuity &VGF payments by the State Government. • Annuity payment along with bonus on due date.

  20. Our Strengths • Outsourcing of Expertise. • Consultants are appointed for Feasibility Report/DPR and Supervision of Construction. • Experts like Legal Advisor, Chartered Accountant, Company Secretary, Environment expert, MIS expert, Road Data System Engineer are engaged in house. • In-house financial analysis. • Planning is done well in advance at the head office level. • Fast decision making. • Political commitment & support. • Concessionaires are treated as partner. • Bills are cleared in 2 to 4 working days. • All Stake holders are facilitated. MPRDC

  21. Accident Response System MPRDC Implementation of ARS system on PPP mode is probably a first in the world. State wide implementation of ARS will be first in country. ARS to address safety requirements in the larger perspective. Technical Assistance through ADB for capacity building in road safety. Accident Response System & Traffic Management Centre in Madhya Pradesh including operation & maintenance for 5 years with estimated cost of Rs.12.50 crores has been proposed. A Road Safety Cell is created in MPRDC. MPRDC has engaged an agency for ARS on Annuity basis. ARS includes centralized call centre, GIS based automatic vehicle tracking system (AVTS), Computer aided dispatch system, Traffic Management Centre. 21

  22. Innovative Financial Models MPRDC 22

  23. Innovative Financial Models MPRDC 23

  24. State Highway Fund MPRDC 24

  25. A country has to pay for its roads. Whether it has them or not, it pays more for those it does not have. So Lets Have them….. MPRDC Connecting People Through Quality Infrastructure 25

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