Developing World-Class Infrastructure at Amaravati PPP in Road...Incentivize accelerated roll out of infrastructure development Smart infrastructure elements In line with city’s

Developing World-Class Infrastructure at Amaravati

PPP - for Roads Sector

PROPRIETARY

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Introduction to Amaravati1

Technical overview of the asset class2

Transaction structure options3

Key points for discussion4

Contact us5

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Amaravati - the People’s Capital of Andhra Pradesh

ndia’s largest greenfield venture

Amaravati, the people’s capital of Andhra Pradesh is envisioned to be the pioneer smart city of India at par with world class standards with cutting-edge infrastructure and immense prosperity in an environmentally sustainable manner

- Sri Chandrababu Naidu N (Hon’ble Chief Minister of AP)

Planned investmentover 20 years

$6 bnAnchor sectors identified for Amaravati

9

Area of the capital city

217 km2

Farmers participated in largest ever consensual Land Pooling initiative

24000

29Villages which constitute Amaravati

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Amaravati is strategically located close to key economic hubs.

APCRDA

Capital of Tamil Nadustate (Manufacturing,

Auto and electronics, ITexports)

Largest cities in the CR (Majorfood production, textile,manufacturing,

education hub)

Common capital for Telangana & AP (IT/ITeS hub, pharma, Bio-tech/Aerospace)

Capital of Karnataka State (IT/ITeS/Aerospace/Defense Hub/Electronics)

▪ Strategically located to key

economy generating mega

cities i.e., Vizag,

Hyderabad, Chennai &

Bangalore

▪ Centrally located within

Andhra Pradesh

▪ Multi-modal connectivity

through Road, Rail, Port &

Airport

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Amaravati has a connectivity advantage – key for its growth

aspirations

Bounded by two National

Highways - NH5 connecting to

Vizag and Chennai; NH9 connecting

to Hyderabad and Machilipatnam

~20 min from Vijayawada

junction – 2nd busiest railway

junction in the country

~250 kms from Kakinada port1; New

port to be developed within 100kms

(Vadarevu or Machilipatnam)

Also, a major Inland waterway

hub

~25 kms from existing Gannavaram

airport;

Roads

Railway

Port

Airport

1 Deep water port with quay length of 2,500m for multi-product handling

Railway double line

Railway single line

Forests

National highway

State highway

Airport

Port

River

Capital city boundary

Capital region boundary

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Amaravati will be the first city in the world purpose built with

urban design derived from “Happy City” principles

SOURCE: “Stress That Doesn’t Pay: The Commuting Paradox,” Scandinavian Journal of Economics, 2008: 339– 66

Montgomery, Charles (2013-11-12). Happy City: Transforming Our Lives Through Urban Design

Studies show that

when all daily needs

are within a

5-minute walk

of home, a sense of

community thrives

Designing urban

spaces geared towards

social interaction leads

to better citizen

satisfaction (greater

impact on national

satisfaction than giving

a 50% pay rise)

A person with a one-

hour commute has to

earn 40% more

money to be as

satisfied with life as

someone who walks to

the office

People who walk ten-

minutes to work weigh

on average 5kgless than those that

don’t

Need better photo

With Karsten

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Amaravati’s dimensions of happiness

World-class

infrastructure

Quality living

for all

Green clean,

resource efficient

Responsiveness

and sustainability

Old & new

Economic power house

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Amaravati will have world-class infrastructure across all

elements in line with vision

50%+ public transport

use, 80%+ coverage

of bus stops in

walking distance,

accident-free

7 sq.m. per student

with walk-to-school

concept, 40 beds

per 10K population

and 5 minutes to

emergency facilities

24x7 stable power with

underground cabling

100% penetration,

20%+ renewable, <5%

transmission losses

Congestion-free

roads with

2.5km/Kcapita with

bicycling and

pedestrian paths

20%+ open spaces

with distinct

developments (e.g.

public spaces,

riverfront)

within walking

distance from 95%

residences

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Nine economic anchor sectors have been identified as drivers

of growth for Amaravati

SOURCE: WIOD, IHS, MGI, expert inputs, Press Information Bureau, GOI

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Total # Jobs (Direct, Indirect, Induced)

GDP estimation

Population & GDP for Amaravati are expected to grow at an

accelerated rate

xx GDP per job

(INR lacs)

Year 25

0.4-0.7

11-13

Year 15Year 10Year 3

6-8

Year 20

3-5.5

9-11

INR ‘000 crores at current prices

Lakh jobs

Year 25

+9% p.a.80-120

15-30 35-50

Year 10 Year 15

60-85

Year 3

2.5-4

Year 20

5-6 5.5-6.5 6-7 7-8 8-9

SOURCE: Amaravati Socio-Economic Masterplan

Year 35Year 10

5-6

30-35

Population estimation

Lakh population

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Nine sources of funding are being pursued to meet the need

of funds for Amaravati’s set-up and operations

SOURCE:Amaravati Socio-Economic Masterplan

Land

monetizationOther sources –

bonds etc.

Investor

Classes

NIIF

1

2

34 5 6

7

8

9

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Contact us5

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Classification of Roads in Amaravati

S. No. Type Nos. RoW (m) Length (km)

1 Major Arterial Roads 3 60 44

2 Arterial Roads 17 50 107

3 Sub Arterial Roads 14 50 145

4 Collector Roads - 25 277

5 Internal Roads - 15.6/ 17 1100

SOURCE:Amaravati Infrastructure Masterplan

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Proposed Cross Section – Arterial Road (50m ROW)


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Proposed Cross Section – Sub-Arterial Road (50m ROW)


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Proposed Cross Section – Collector Roads (25m ROW)


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S. No.

Classification of Roads

(As per

Development

Plan Report)

Design Speed (km/hr)

IRC


DMRB


AASHTO


Singapore


Recommended

For Amaravati

1Major Arterial Road

80

50 - 80

50-100 60-70 80

2Arterial/Sub Arterial road

80 50-100 60-70 80

3 Collector road 50 50 NA 50

4 Local roads 30 30-50 40-50 30

International Design Standards and Performance

Design Speed


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Description

AASHTO

New York

AUST

ROADS

Sydney

DMRB

London

European

Amsterdam

LTA

Singapore Abhudabi IRC Adopted

Lane width (Carriageway) (m)

2.7 - 3.6 3.0 - 3.5 3.0 - 3.65 3.0 - 3.5 3.4 - 3.7 3.3 - 3.7 3.0 - 3.5 3.5

Cycle track (m)

1.5 1.5 1.5 - 2.0 1.5 - 2.0 1.5 - 2.0 1.5 - 2.0 2.0 2.0/3.0

Footpath (m) 1.2 1.2 1.5 1.5 1.5 1.8 1.5 3.0 – 3.5

Super elevation (%)

6 6 5 5 6 5 5 5

Camber or Cross Fall (%)

1:50/

1:401:50/ 1:40

1:50/ 1:40

1:50/

1:40

1:30/

1:40

1:50/

1:401:50/ 1:40

1:40

Min/Max Longitudinal gradient (%)

0.2/6 0.3/6 0.5/6 0.3/6 0.4/6 0.3/4 0.3/3.3 0.3/3.3

International Design Standards and Performance


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HS

Chainage

(Km)CBR MSA VG

Pavement Crust Composition (mm)

BC DBM WMM GSB TotalFrom To

I 0.000 21.350 10% 100 VG - 40 50 110 250 200 610

Proposed Pavement Crust Composition


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8 Priority Roads with approximate length 85 kms have been

identified in current year to provide connectivity within

Amaravati

SOURCE: APCRDA

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Contact us5

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7 roads with total length of 65 Kms has been proposed for

HAM in current year with an approximate cost of 2000 Cr

S.No Road No. Type

Length

(Km.)

Typical

Cross

Section No. of Structures

Estimated Cost

(INR Cr)

1 E08 Sub Arterial 13.67

6 lane + 2

lane BRT

3 Bridges & 28

Culverts 451.11


4 lane + 2

lane BRT 1 Bridge & 16 Culverts 231


4 lane + 2

lane BRT 18 Culverts 219.9

4 N4 Sub Arterial 7.12

4 lane + 2

lane BRT

2 bridges & 14

Culverts 213.6


6 lane + 2

lane BRT 1 bridge & 20 Culverts 396


4 lane + 2

lane BRT

2 bridges & 16

Culverts 247.8


4 lane + 2

lane BRT 1 bridge & 14 Culverts 258

SOURCE: APCRDA

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Smart Solutions along Roads Infrastructure can speed

recovery of capex

# Smart Element Description

Smart

Bus Stops

Bus stops with wi-fi, real time digital display of schedule, power chargers,

solar panels, digital advertisement panels

Other smart solutions include Advanced Traffic Management System, Emergency Box, Public

Address Systems, Smart City Operations Center, City Wi-Fi, Smart Metering, E-Challan

Smart Street

Lighting

LED Lights that adapt to movement by pedestrians, cyclists & cars.

Automatic dimming & Brightening. Also, they can be monitored & controlled

wirelessly.

Utility Corridor

Utility lanes to carry all utilities like Power distribution lines, water,

sewerage, ICT lines, storm water, gas, fire hydrant, etc.

Environmental

Sensors

Smart Environmental Sensors should be able to read and report the

following parameters: Temperature, Humidity, Radiation and Air Quality

Variable

Messaging

Display

Display the useful information related to Traffic congestion, Accidents,

Ongoing Roadwork zones, Speed limits , Key notices or information about

any emergency or disaster, Display the parking availability information, etc.

RLVD

Red light violation detection(RLVD) system automatically detects violation

& can issue e-challan.

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Infrastructure development at Amaravati presents unique

opportunities & challenges

Greenfield city

Mandate as per APCRDA Act

Parallel construction of infrastructure

High Financing Need

Opportunities to develop & operate latest smart

infrastructure – no inherited infrastructure assets

Infrastructure provision to be in line with the

APCRDA Act 2014

Need to ensure linkages of infrastructure

development across roads & utility corridoor

High financing need for new world-class

infrastructure

Significant future opportunities in

RoadsMore than 150 Kms of Arterial & Subarterial roads

to be built in next 3 years

World Class InfrastructureHighest standards of infrastructure principles ;

Travel time < 15 m, Energy efficient street lighting

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Guiding Principles for design of the PPP structures

Demand Risk

Allocation▪ Public sector to manage demand risk, since it is linked to city

growth & population projections

Capex

Investment

Viability

▪ Ensure capex is in line with investor ability to invest

▪ Grouping of roads to provide suitable investment package

Infrastructure

roll-out plan

▪ Ensure infrastructure roll-out is as per master plan to meet

statutory and other commitments

▪ Incentivize accelerated roll out of infrastructure development

Smart

infrastructure

elements

▪ In line with city’s development plan & overall smart city vision,

combine smart elements as a part of the package

Financing

Considerations

▪ High investment of roads proposes high capex risk which needs

to be shared

▪ O&M financing to be adjusted to change in scope & interest rates

Clarity in scope &

responsibilities

▪ Ensure clarity to minimize subjective interpretation of scope &

responsibilities

▪ Set up mechanism for dispute resolution

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NHDP PPP projects awarded in roads sector

1 BOT (Toll) data till 29 Feb 2016

813

28

40

600

7

FY15

53

0

FY161

32

4

FY14

001

FY13

2

1

1510

SOURCE: IBEF report, PPPIndia database; web search, Ace Equity; India Infrastructure Monitor

Mode of award for road projects

No. of projects

▪ 6 HAM projects

awarded in FY2016

▪ Examples

– 4 laning of Gagalgeri

- Saharanpur -

Yamunanagar ( UP/

Haryana Border)

– 4 laning of

Chultmalpur -

Ganeshpur and

Roorkee -

Chutmalpur-

Gagalheri

EPC BOT-AnnuityBOT-Toll HAM

Strong Push on HAM model going forward in PPP contracts

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Hybrid Annuity Model is a combination of EPC and Annuity

model designed to minimize traffic risk

SOURCE: Expert interviews, NHAI website

HAM

Contract

Structure

Risks

Risk category

Public

Sector Concessionaire Notes

Traffic/Revenue ▪ Traffic volume, tariff rates, tariff leakage

Financing ▪ Financial closure on time

▪ Financing cost overrun

Construction ▪ Cost Overrun, Time Overrun, Quality risk

Operations & Maintenance ▪ Capex escalations to be split according

to responsibility for delay

Payment delays ▪ Risk to be mitigated by roads fund or

letter of credit from bank

Input Material Cost ▪ Material cost fluctuation risk

Change in Project Scope ▪ Changes due to other utility work should

be adjusted for

Pre-Construction Clearance ▪ Environment, ROW, Forest clearances

Economic ▪ Tax rate risk, Inflation risk

▪ Combination of EPC and BOT model; Bidders to specify total project and O&M costs as bid

variable

▪ Awarding agency to provide 40% of the Bid Project Cost in 5 equal installments during

construction period

▪ Remaining 60% to be provided in 30 biannual installments

▪ Payments adjusted with price indexes (WPI,CPI) and prevalent RBI interest rate

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Key Points for discussion4

Contact us5

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Key Points for discussion: Perspectives on the transaction

structure

Smart Elements & other Bundling

Risk SharingTechnical specs, layout, & phasing

Comments on HAM Model

Key Concession Terms Operating & other support

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AMARAVATIThe people’s capital

Contact:

Director, Economic Development

[email protected]

Documents

Developing World-Class Infrastructure at Amaravati PPP in Road...Incentivize accelerated roll out of infrastructure development Smart infrastructure elements In line with city’s