BOOT 2
- 6. BUILD, OWN, OPERATE, TRANSFER(BOOT) -MADHUSUDHAN NARASIMHAMURHTY -ATISH ROY CHOWDHURI
- 7. INTRODUCTION 1. This is one of the kind of Public-Private Partnership(PPP) model. 2. A BOOT funding model involves a single organization, or consortium (BOOT provider) designing, building, funding, owning and operating the scheme for a defined period of time and then transferring this ownership across to an agreed party. 3. This kind of PPP model is mainly adopted in power generation projects, Port building projects and airports.
- 8. NEED FOR BOOT PROJECT From the Government perspective : 1. Various sources of Capital 2. High Speed operation 3. Risk and Burden free 4. In-depth views of Project feasibility 5. Overall development in the economy
- 9. PROCESS OF BOOT PROJECTS Govt. Private Limited SPV Build, operate and own Transfer
- 10. Project Company ( SPV ) O and M Contractor Project Lenders EPC Contractor Project Sponsors Government Hierarchy of Project Parties and Responsibilities
- 11. Bengaluru International Airport Limited(BIAL)
- 13. Project Details • Model –BOOT project under PPP model • Government -Karnataka State & Industrial Development Corporation (KSIIDC), Airports Authority of India (AAI) • Project Sponsor -Siemens, Zurich Airport Switzerland, GVK • Concession period -30 years and have the option to extend the same for additional 30 years. • Project vehicle –Bengaluru International Airport Limited (BIAL) • EPC, O&M contractor –L&T IDPL
- 14. Dhamra port
- 15. Project details • Project - Deep-water, all-weather Port • Model – BOOST project PPP model • Government – Government of Orissa • Project Sponsor - A 50:50 Joint Venture Company of Larsen & Toubro Limited and Tata Steel. Now it is Adani ports and Tata Steel • Concession Period - 34 Years Including 4 years of Construction Period. • Project Vehicle – Dhamra Port Corporation Limited (DPCL) • Project Lenders – L&T IDPL and Tata Steel • EPC, O&M Contractor - L&T IDPL.
- 16. Hyderabad Metro Rail Project
- 17. PROS & CONS OF BOOT PROJECTS PROS 1. Commercially viable 2. Enhancement of government’s policy 3. Reduction in principal after transfer CONS 1. Credibility conflicts 2. Keeping up the precision 3. Commitment feasibility
Editor's Notes
- #3: .
- #18: PROS 1. The willingness of equity investors to accept the risk indicates that the project is commercially viable. 2. A BOOT project will help in a government’s policy of infrastructure privatization. The efficiency of the promoter and its economic interest in the design, construction and operation of the project will produce significant cost efficiencies to the principal when the concession period ends. CONS 1.There will be no credibility if the government provides too much support to the promoter. 2.A BOOT strategy is a highly complicated structure that requires detailed planning, time and money throughout the concession period. 3.The promoter must have the commitment and interest to maintain the project.