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Presentation at Asian Highways Investment Forum
Bangkok, 8-9, October 2013
United Nations Economic & Social Commission For Asia & The Pacific
Performance based Maintenance Contracts for Highways
By
Atul Kumar
Chief General Manager,
National Highways Authority of India
Email: [email protected]/[email protected]
1
Length (km)
National Highways 82,891
Expressways 200
State Highways 1,54,500
Major District Roads 4,67,763
Rural Roads 26,50,000
Total Length – 4.3 Million km
• Roads carry 85 % of passenger & 70 % of freight traffic• National Highways constitute only 2% of length, but carry 40% of the traffic on
Indian Roads.• NHDP-Worlds largest PPP road development program• NHAI has completed 21,165 km and is presently developing another 12,348 km of
NHs. 222 Contracts are under implementation.• All seven phases of NHDP will cover 54478 km and non NHDP will cover 1050 km.
Indian Road Network
2
Riding quality of pavement
Safety of Road Users
Protection of Highway property
Economic maintenance
Traffic Management
Incident Management
Making journey comfortable
Revenue generation
4
Riding Quality of pavement
Bumps within specified limits & Periodic overlay
Preventive maintenance e.g. crack sealing, joint filling, edge
repair ,Prompt repair etc.Safety of Road Users
Engineering improvement & FOBs & Underpasses
Adequate signage & Light barrier in median (plantation)
Lane markers, Kerb Markers, Crash Barriers
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Protection of Highway property
Check encroachment & overloading and Round the clock
patrolling. Economic maintenance
Periodic evaluation of pavement condition & Renewal design
based on technical evaluation of pavement structureTraffic Management
Minimizing obstructions and travel time, Lane driving & Speed
limit
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Incident Management
Ambulance Service, Route Patrol Service, Tow Away Crane
Service & Assistance in distress viz. help to broken down vehicle,
flat tyre replacement etc. Making Journey Comfortable
Provision of structured wayside amenities, Bus lay bays/ Truck
lay bays, Minimum stop overs at toll plazas
Revenue Generation
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Public Funded Projects –O&M through contracts to be supervised by Consultants (short term on item rate basis).Toll collection through another agency. Being transfered to performance based Maintenance of Contracts –Operation, Maintenance and Transfer (OMT)
BOT (Annuity) ProjectsO&M by Concessionaire (long term on performance basis) Toll collection through another agency.
BOT (Toll) ProjectsBoth O&M and toll collection by Concessionaire (long term on performance basis).
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Mode Completed Contracts
No. Length
BOT (Toll) 56 3,396
BOT (Annuity) 21 1,145
OMT 18 2,770
Total 95 7311
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Nature of Defect or Deficiency Time Limit for Repair/Rectification
Carriageway and paved shouldersBreach or blockade Temporary/ restoration of traffic within
24 hours, permanent restoration within 15 days
Roughness value exceeding 2,500 mm in a stretch of 1 km (as measured by a standardized rough meter/bump integrator)
180 days
Pot holes 48 HrsCracking in more than 5% of road surface in a stretch of 1 km 30 daysRutting exceeding 10 mm in more than 2% of road surface in a stretch of 1 km (measured with 3 m straight edge)
30 days
Raveling/Stripping of bitumen surface exceeding 10 sq m 15 daysDamage to pavement edges exceeding 10 cm 15 daysHard/earth shoulders, side slopes, drains and culverts
Variation by more than 2% in the prescribed slope of camber/cross fall 30 daysVariation by more than 15% in the prescribed side (embankment) slopes 30 days 10
Requirements specified in Schedule to the Model Concession Agreements with penalties which are to be invoked on recommendations from Independent Engineer.Illustrative list on the road part :
Assuring the Road User of adequate service quality
Cost Effective operation of highways
Developing O&M as an industry through Public Private
Partnership.
Operation, Maintenance and Tolling through same agency.
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Three Critical Elements for financial viability determination – Traffic volume,
User fee and O&M cost
Concession Agreement follows Output Specifications
Concession Period based on Periodic Maintenance Cycle of the Project Highway
:[6 to 9 years]
Concessionaire selection by Highest Annual Concession Fee offered for 1st year
with annual increment of 10%- Payment in monthly installments within 3 days of
close of the month
Comprehensive Risk Allocation between parties
Provision for Major Maintenance Works and other facilities if necessary
All financial inflows (toll revenue) and outflows through Escrow Account to
provide enhanced security to lenders
12
Permitted Debt & Equity Ratio: 70 :30Technical Capacity: The Applicant shall, over the past 5 (five) financial years preceding the Application Due Date, have:
paid for, or received payments for, construction of EPC Project(s); and/ orpaid for development of PPP Project(s) and/ or collected and appropriated revenues from PPP Project(s),
such that the sum total of the experience score is more than the indicated project cost
Provided that at least one fourth of the Threshold Technical Capability shall be from the Highway Projects
Financial Capacity: The Applicant shall have a minimum Net Worth (the “Financial Capacity”) equivalent to 25% of the indicated project cost at the close of the preceding financial year.
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The technical parameters mainly focused on output specifications
Only Core Requirements (Project Facilities) defined like service
road, toll plaza/medical and ambulance facilities
Concessionaire to innovate & add value i.e.) Road safety
OMT Concession Agreement contains 40 Articles and;
15 Schedules A to O
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Role and functions of the Independent EngineerReview Drawings and Documents within 15 days & modified if any within 7 daysReview, inspection and monitoring of Construction Works, quality assurance procedures within 15 daysConducting tests on completion of construction (10% of no. of tests prescribed in Quality Control Manual) and issuing Completion Certificate Review, inspection and monitoring of O&M;Review, inspection and monitoring of Divestment Requirements;Assisting the Parties in resolution of disputes; andUndertaking all other duties and functions in accordance with the Agreement.Determination of costs and timeDetermine the costs and their reasonableness if requiredDetermine the period or any extension thereofAssistance in Dispute resolutionMiscellaneousNotify its programme of inspection to the Authority and to the Concessionaire Copy of all communications, comments, instructions, Drawings or Documents to be communicated to the Authority
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Force Majeure For Non-Political Event: an amount equal to 50% of Debt Due less Insurance CoverIndirect Political Event: an amount equal to Debt Due[Act of war/strike/political agitations]For Political Event: an amount equal to Debt Due + 60 times the Average Daily Fee (Change of law /compulsory acquisition in National interest)Termination Due to Concessionaire's event of Default An amount equal 50% of Debt Due
Termination Due to NHAI event of DefaultAn amount equal to Debt Due + 60 times the Average Daily Fee
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Termination Payments
Costly / Prime National Asset maintained by tapping \Private Sector efficiency.Asset after up gradation and proper maintenance return back to the Govt. No Toll/Revenue leakages Average cost of construction of a 4-lane highway – 8 crore
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OMT-WIN-WIN SITUATION
Length under OMT (Contract)
Total Project Cost (TPC) for maintenance and upgradation (6 to 9 year )
Firm’s revenue for the first year (increased @10% year over year)
Total (Crores) Per km. (Lakhs) Total (Crores) 1st Year per km. (Lakhs)
2,770 km.(18 nos.)
1711 62 1210 44
1 US$ = Rs. 62
18