Infrastructure Flashcards
What is Built-Operate-Transfer?
Aka Build-Own-Operate Transfer
Private entity get project from corporate / public sector
it finances, designs, owns, operates the project, able to recover its investments by levying fees
Pvt entity entitled to retain all revenues
transferred to govt at end of agreement
What is V-BOT?
- Variable BOT
Sometime contractor able to recover investment even before end of period. or sometime not do even after contract end
V BOT enables flexibility in rolling period to accomodate above instances
therefore have a rolling plan
when contractor recover investment early on highway, after recovered, NHAI take over. all tolls end on the road
lowest bidder gets the project
What is concession
Grant of rights land or property by govt like roads hospitals
pvt company agt with govt - exclusive right to operate maintain and carrry investment in public utility for given number of years
payment can be done both ways, contractor may pay to govt, govt may to contractor
What is Hybrid annuity model?
40% capital by govt upfront. 60% will be paid over the life of project as annuties
helps distribute risk b/w govt and contractor
What is toll operate transfer?
investor collect toll and responsible for operation and maintenance
What is swiss challenge?
any party with credentials submit proposal to govt
proposal put online - second party can suggest improvement in proposal
if contractor able to match more attractive proposal - the project to him
expert committee will decide best proposal
Kelkar committee discouraged govt from adopted it in auction infra project
what is viability gap funding?
enhance financial viability of infra project which dont have commercial vaibility
grant assistance of 20% by CG
additional grant 20% may be given by associated ministry SG or project authority
UDAN air connectivity scheme based on this
What is take out financing?
banks deposit life about 3 to 5 years. they lend for long ter. after 3-5 years firm like IIFCL take out account from bank books
it pays bank what borrower owe to it and collect money from borrower
intl accepted practice for long term funds
What is plug and play model
big infr project like power plant airports
all regulatory clearnace put in place before awarded to private
transparent auction
means winner of contract can start implementing immediately without worrying regulatory clearance
What is Infra debt fund?
capital incentive. long payback period
require long term fund at low cost
strucutred either as company or trust
RBI and SEBI laid regultaory framework for it
if set up as trust - managed by SEBI as MFs
if company - as NBFC by RBI
what is infrastructure investment trust?
like MF, enable direct investment of small amt of money from indiv / inst investor in infra
work like MFs or REITs
regulated by SEBI
What is EPC contract and Turnkey?
EPC - contractor responsible for design and construction on turnkey basis and for fixed prive
turnkey - traditional procurement model for infra - where contract given to build a projec - the party give contract as entire project delivered and har to turn key for operation
private investor thru bidding generally
contractor assumes risk
aka Design build
What is a Lease?
operator responsible for operating and maintaing infra facility adn serivces
generally operator not req to make large investment
applied in combo with other methods
