| Ownership Of PPP Infrastructure Development | | | | beneficiaries are the permanent equity holders of |
| Projects. | | | | such projects. The users and local dwellers should not |
| As a part of (PPP) Public Private Partnership in | | | | hesitate to sacrifice a small amount of their income |
| infrastructure development, BOOT (Build Own | | | | to user instruments, as it facilitates more |
| Operate and Transfer) and BOLT (Build Operate | | | | convenience for their mobility. |
| Lease and Transfer) projects are playing a vital role | | | | While developing the BOOT or BOLT projects the |
| in the world and India too. Many projects under | | | | Government and the project company must consider |
| BOOT form are successfully implemented in many | | | | the per capita income and standard of living of the |
| countries. In India many infrastructure development | | | | local population, the potential growth gained after |
| projects are formed under BOOT model. It was | | | | implementing the project in that region etc. The |
| identified that “user pay” instruments like | | | | crucial deciding factor must be the probable marginal |
| water tax, conservancy tax, sewerage tax, fines for | | | | benefit, which could be derived from the project. The |
| dumping waste, toll tax, user charge, advertising | | | | probable marginal benefit must yield a realistic and |
| rights etc will motivate the BOOT models of | | | | reasonable service with in a comfortable period of |
| infrastructure projects in Water supply, Sewerage, | | | | time. If the beneficiaries are the deprived and |
| Solid waste, Roads, Flyovers, Bridges, Airports, | | | | economically weaker section the government must |
| Railway stations, Bus Terminals etc. | | | | come forward to share the project price. The |
| Normally Boot projects have thirty years of license | | | | government can think of combining the local |
| and asset will be transferred free of cost at the end | | | | municipalities and District Central Cooperative Banks |
| of the license period. In India the Gujarat maritime | | | | to share the project price of the proposed |
| Board identified 10 green field sites as direct berthing | | | | infrastructure development project in those localities. |
| deep draft ports on a BOOT basis, Andhra | | | | The value and span of the network of such services |
| Government and Orissa Government also proposed | | | | must be the central theme of any BOOT project. |
| many project under BOOT. | | | | Such values naturally stimulate the minds of the |
| In India the Tamil Nadu Government made an | | | | beneficiaries (users). The beneficiaries also should feel |
| agreement with Larson and Tubro to construct a 28 | | | | that the private capital involved in such infrastructure |
| Km long two lane Coimbatore bypass road. This | | | | projects is the debt capital of the users and it is |
| would help to save 2.5 Km travel, fuel and traffic | | | | obligatory on the part of the stakeholders to redeem |
| free flow. The project was completed at a cost of | | | | the debt and a comfortable premium within a |
| 1.04 bn and bypass started operative from Jan 19, | | | | reasonable span of time. The stakeholder’s |
| 2000. It was maintained with all facilities including | | | | cooperation ensures the infrastructure project |
| drinking water, petrol bunk and 24 hours ambulance | | | | promoting companies that there is no commercial risk. |
| service. As per the agreement the L & T started | | | | The project companies recover the project price |
| collecting Toll charges, which was the only revenue | | | | from user charges paid by the stakeholders. |
| to recover the project price.The users of the bypass | | | | The success of the infrastructure project is purely |
| road refused to pay the toll charges and L&T faced | | | | based on the stakeholder’s attitude. The |
| a financial crisis in repayment of the loan amount to | | | | stakeholders must take the ownership in helping the |
| their funding agency. Even the Tamil Nadu | | | | project companies to recoup the project price in the |
| Government had dues in toll charges. The only | | | | form user charges. If the beneficiaries do not realize |
| user’s instrument for L & T to recover the | | | | their capacity in such projects it would be a “sick |
| project price is toll charges. They were not in a | | | | in seed” for the grooming new BOOT projects in |
| position to collect the accumulated dues. | | | | India for developing the infrastructure. Many BOOT |
| The beneficiaries must realize the primeneed of the | | | | projects in India are struggling to find a comfortable |
| infrastructure development. The core beneficiaries | | | | solution in mitigating the commercial risk. The project |
| are the local people and tress- passers. They must | | | | companies should analyze “ the duration and user |
| be aware of its explicit and implied value addition to | | | | instrument” to recover the project price not only |
| their growth and development. The infrastructure | | | | in the light of BCR (Benefit Cost Ratio) and IRR |
| forms a wide network of services in the economic | | | | (Internal Rate Of Return) but also the affordability of |
| development of that location. In an infrastructure | | | | the beneficiaries. The most viable technique of |
| project general public in that locality and the tress | | | | mitigating the commercial risk is creating the |
| passers are the real equity holders. They are the | | | | ownership among the beneficiaries. This will result in |
| long-term beneficiaries of the infrastructure | | | | gaining the co-operation of the beneficiaries to give |
| development projects. The users of such facilities | | | | the ‘user charge’ voluntarily and |
| should realize that infrastructure development | | | | enthusiastically. |
| companies are professional service contractors and | | | | |