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FREQUENTLY  ASKED   QUESTIONS
What is GIDB?
What is the Gujarat Infrastructure Agenda-Vision 2010?
What's the master Plan?
What are the objectives of the master Plan?
What are the sectors that the Agenda-vision 2010 seeks cover?
What are the issues on which the viability of an infrastructure project in any location hinges?
What is BOT?
What is the rationale for BOT?
What are the characteristics for a BOT project?
What is BOT Law?
What are the salient features of this BOT Law?
What are the allowable contractual arrangements?
What are the types of infrastructure projects eligible for BOT implementation?
How can the private sector participant take part in any BOT project?
What are conditions required for the unsolicited proposals?
What are the Documentation requirements for unsolicited proposals?
In what capacity can the private sector participate in a BOT project?

 

 

 

 

What is  GIDB ?


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:

  • To promote private sector participation in financing, construction, operation and maintenance of the Infrastructure projects.

  • To advise the State Govt. and its agencies on the matter of Policy.

  • To lay down priority of the projects.

  • To consider propowsal and proposed concession agreement to be entered into between State Govt./Govt. agency and private sector developer.

  • To undertake feasibility, pre-feasibility studies of the project.

  • To monitor the projects undertaken in the State.              

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What is the Gujarat Infrastructure Agenda-Vision 2010?

 
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?

 
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?

 
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 

 
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?

 
The issues are as follows :
  
The ability of the state's economy to finance and sustain the created infrastructure.
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?

 
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?
  •  BOT exhibits Govt. intensions and committments for inviting private sector participation in Infrastructure projects.

  • Ease the Budgetary burden.

  • Facilities being in private hands, goods and services are delivered to the people  more efficiently.

  • Overcome the fiscal constraint of the Govt. in implementing the projects in a time bound manner.

  • 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?
 
Whilst the BOT projects vary in terms of its packaging, they share a number of characteristics :
 
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.
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?
 
Gujarat Infrastructure Development Act, 1999 (BOT Law) has following features:
  • Disciplines private sector participation project in infrastructure projects by providing transparent procedure for selection of developer.
  • Encourages proposals for direct negotiations.
  • Provides for levying user charges for the facilities provided by the developer.
  • Reduces the Political risk.
  • The provision of entering into a concession agreement with private sector developer gives a force of the law to the deal.
  • 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 allowable contractual arrangements?
 
The provision in the law allows the following other contractual arrangements for BOTs and the use of other variants. These are :
 

 
BOOT (Build, Own-Operate and Transfer)
BOLT (Build, Operate, Lease and Transfer)
BOOM (Build, Own-Operate and Maintain)
And other variants as approved by the GoG from time to time.

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What are the types of infrastructure projects eligible for BOT implementation?

 
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 :
 
Public Bidding or tender of projects; and
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?
 
The unsolicited proposals for projects may be accepted by an implementing agency provided that :
  
The project in question involves a new concept or technology and/or not part of the list priority projects and
No direct Government guarantee, subsidy, or equity is required.

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What are the Documentation requirements for unsolicited proposals?
 
The participant must submit a complete proposal to the implementing agency. A complete proposal includes :

 
Feasibility study consisting of market analysis, technical aspects, financial analysis, economic analysis and operational./institutional aspects;
Basic contractual terms and conditions;
Pre-qualification requirements, which include legal requirements, experience or track record and financial capability to undertake the project;
Preliminary financing plan, which describes how the project will be financed and
Implementation plan, which would show the timeframe of construction and implementation.

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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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