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| FREQUENTLY ASKED
QUESTIONS |
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What is GIDB ? |
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Gujarat
Infrastructure Development Board (GIDB) is established as a
body corporate under Gujarat Infrastructure Development Act,
1999 to promote private sector participation in Infrastructure
Projects. Funtions of GIDB are as follows:
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To promote private sector participation in
financing, construction, operation and maintenance of the
Infrastructure projects.
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To advise the
State Govt. and its agencies on the matter of Policy.
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To lay down priority of the projects.
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To consider propowsal and proposed
concession agreement to be entered into between State
Govt./Govt. agency and private sector developer.
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To undertake feasibility, pre-feasibility
studies of the project.
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To monitor the projects undertaken in the
State.
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What
is the Gujarat Infrastructure Agenda-Vision
2010? |
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The
scale of the estimated infrastructure
requirement in next 10 years requires large
investments to be committed. It is envisaged
that budgetary allocations will be made for
this. But it will only be a part of the entire
outlay required. The major resource gap
therefore calls for attracting very
large-scale private sector capital inflows
into the state for infrastructure development.
The Gujarat Infrastructure Agenda 2010 seeks
to address this requirement and presents the
state with a coherent and comprehensive action
paper for integrated development across all
infrastructure sectors. The agenda develops a
prioritized shelf of projects for inviting and
attracting private participation for
infrastructure development in the state and
identifies the policy initiative needed by the
state to facilitate the same. |
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What's
the master Plan? |
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Gujarat Infrastructure Agenda -
Vision 2010 represents the Board's initiatives
with regard to the master plan, which spans
all major infrastructure sectors over a 10
year planning horizon. The agenda aims to lay
down a road map for the development of
infrastructure in the state. |
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What
are the objectives of the master Plan? |
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The
primary objective of the master plan agenda is
to estimate the sector-wise infrastructure
requirements of the state for the decade 2000
to Gujarat Infrastructure Development Board
and to identify projects and linkages across
sectors for co-ordinated development.. |
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What
are the sectors that the Agenda-vision 2010
seeks |
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These
sectors include Power, ports, transport (Road,
Rail and pipelines), industrial parks, urban
infrastructure , water supply and
miscellaneous sectors like airports gas grid
and information infrastructure. |
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What
are the issues on which the viability of an
infrastructure project in any location hinges? |
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The issues are as
follows :
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The
ability of the state's economy to
finance and sustain the created
infrastructure. |
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The
ability of the state Government to
support the development of projects
through financial and/or policy
supports. |
The experience
of other countries suggests that private
investment requires facilitating Government
policies as well as wide ranging sectoral
reforms including legislative amendments,
restructuring of existing Government
operations and the introduction of regulatory
mechanism. The review of the policy in each
sector aims at identifying these requirements. |
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What
is BOT? |
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BOT is a
nature of concession agreement entered into by
the Govt./Govt agency with private sector
developer for Infrastructure projects.
As per the GID Act,1999 there are 12 nature of
concession agreements including BOOM, BT, BLT,
BTO, Lease Mangement, Management Contract,
ROT, ROM, Service contract, SOT and Joint
Venture agreement. |
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What
is the rationale for BOT?
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BOT
exhibits Govt. intensions and committments for
inviting private sector participation in
Infrastructure projects.
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Ease the Budgetary burden.
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Facilities being in private
hands, goods and services are delivered to the
people more efficiently.
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Overcome the fiscal constraint
of the Govt. in implementing the projects in a
time bound manner.
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Implementation of the projects
become faster and yield economic growth of the
state.
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| What
are the characteristics for a BOT project?
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Whilst
the BOT projects vary in terms of its
packaging, they share a number of
characteristics :
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Project
has to be so structured so as to be
profitable. The project must have the
potential to generate sufficiently
attractive returns to the investor's
equity. |
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BOT's
high debt/equity ratio is highly
leveraged. The equity financing usually
comes from the concessionaire, while the
debt financing usually comes from
commercial sources, as well as bilateral
and multilateral lenders |
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| What
is BOT Law? |
State has enacted Gujarat
Infrastructure Development Act, 1999,on the
principles of BOT. The act is a legal
frame work for private sector participation in
financing, construction, operation and
maintenance of the project. |
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| What
are the salient features of BOT Law?
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Gujarat Infrastructure Development Act, 1999 (BOT
Law) has following features:
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Disciplines private sector
participation project in infrastructure
projects by providing transparent procedure
for selection of developer.
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Encourages proposals for
direct negotiations.
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Provides for levying user
charges for the facilities provided by the
developer.
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Reduces the Political risk.
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The provision of entering
into a concession agreement with private
sector developer gives a force of the law to
the deal.
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There are 12 nature of
concession agreement provided in the schedule
of the Act, which gives sufficient liberty to
the State Govt. and the private sector to tie
up the partnership.
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| What
are the types of infrastructure projects
eligible for BOT implementation? |
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The construction, rehabilitation, improvement,
betterment, expansion, modernization,
operation, financing and maintenance of the
projects identified in the Master Plan
Agenda-Vision Gujarat Infrastructure
Development Board described above. This also
includes other infrastructure and development
projects as may be authorized by the
appropriate agencies, may be implemented under
the provisions of the law and its implementing
rules and regulations.
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| How
can the private sector participant take part
in any BOT project? |
The Private sector participant can take part
in any BOT projects via any of the two types
of project implementation modes :
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Public
Bidding or tender of projects; and |
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Submission
of unsolicited proposals. |
The rules governing the
conduct of public bidding and unsolicited
proposals are clearly specified in the act. |
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| What
are conditions required for the unsolicited
proposals?
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The unsolicited proposals for projects may be
accepted by an implementing agency provided
that :
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The
project in question involves a new
concept or technology and/or not part of
the list priority projects and |
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No
direct Government guarantee, subsidy, or
equity is required. |
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| In
what capacity can the private sector
participate in a BOT project? |
Private entries can participate in BOT
projects either as project participants,
contractor or facility operators. To mitigate
risks during construction, a project
participant may decide in a lump sum, fixed
price, fixed-date turnkey contractor
.. |
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