IL&FS Infrastructure Development IL&FS Infrastructure Development

Corporation Ltd.Corporation Ltd.May 2008May 2008

A Presentation ByA Presentation By

Madhya Pradesh – Destination UnveiledMadhya Pradesh – Destination Unveiled

Possibilities of development of tourism Possibilities of development of tourism

project through PPP in MPproject through PPP in MP

In this presentation

1. Tourism in India

2. Tourism in Madhya Pradesh

3. Public Private Partnership ( PPP)

4. Project Development

5. About IL&FS

6. Project Development & Promotion Partnership PDPP

7. Select Success Stories

8. Conclusion

Tourism in India – Some Facts & Tourism in India – Some Facts & FiguresFigures

Tourism in India

JBIC ranked India as the fifth most attractive investment destinations.

Conde Nast Traveler, one of the world’s most celebrated travel magazines ranked India amongst the top tourist destinations of the world.

Tourism is one of the third largest net earner of foreign exchange for the country and also one of the sectors, which employs the largest number of manpower.

India has significant potential for becoming a major global tourist destination.

Tourism in India – Figures

0.8% share of world market

Tourists (2006) 4.6 million (International) 382 million (domestic)

Employment Direct - 10.7 million Indirect – 24.4 million

Export earnings ~ US $ 9.6 bn 2006

Contribution to GDP Direct 2% Overall 5.9%

FOREIGN EXCHANGE

Tourism is one of the third largest net earner of foreign exchange for the country (2001-02):

- Gem & Jewelry US$ 7.40 Bn.- Readymade Garments US$ 5.50 Bn.- Tourism US$ 3.30 Bn.

EMPLOYMENT

Every Rs.1 million ($25,000) invested creates…

• Tourism (directly) 47.5 Jobs• Tourism (indirectly) 89 Jobs

(sub-sector of hotels and restaurants, transportation etc.)

• Agriculture 44.6 Jobs• Manufacturing 12.6 Jobs

Tourism in India : Key Potential

•World class cultural and natural heritage tourism assets

•Multi-themed product development opportunities

•Strong global, regional and national tourism market growth prospects

•Strong potential to increase market share

•Potential to go beyond the 3 S’s of tourism – experience tourism

Tourism in India – Major concerns

Need – Make projects lucrative for private sector Investment

Approach & Connectivity

Lack of Proper Infrastructure

Lack of Information - Marketing

Mismatch between demand and supply

Poor availability of trained manpower (guides, hospitality)

. Regulatory issues – coordination between departments

Tourism in Madhya PradeshTourism in Madhya Pradesh

A Glimpse of Tourism in Madhya Pradesh

Kanha is the largest Wildlife Sanctuary in Asia

Kahjuraho has some of the most famous Sculptures in the world

Bhimbeteka is the oldest Cave Paintings in the world

Sanchi houses the oldest Buddhist Stupa in the world

9 national parks and 25 game sanctuaries out of which four are major tiger reserves.

Sacred rivers of Narmada, Tapti, Son and Kshipra have a string of religious places located on their banks.

Pachmarhi one of the most beautiful hill stations.

Tourist festivals displaying variety of folk and performing arts at Khajuraho, Orchha, Pachmarhi, Indore-Ujjain (Malwa) and Bhopal.

Kanha National Park

BhimbetekaKhajuraho Sanchi Pachmarhi

On the basis of the proximity of destinations and linkages between them, State Government has identified 4 major tourist circuits in the State:

Gwalior - Shivpuri - Orchha - Khajuraho

Indore - Ujjain - Maheshwar -

Omkareshware - Mandu Jabalpur - Bhedaghat - Mandla -

Kanha - Bandhavgarh Bhopal -Sanchi - Bhojpur - Bhimbetka

- Panchmarhi

Major Tourism Circuits

Attractions along key circuits

Heritage Tourism Gwalior, Orchha, Khajuraho,Sanchi, Mandu,Datia, Burhanpur etc

Pilgrim Tourism Ujjain, Maheshwar, Omkareshwar, Chitrakoot, Amarkantak, Sanchi, Orchha, Amarkantak etc.

Eco & Adventure Tourism

Pachmarhi, Kanha, Bandhavgarh, Panna, Satpura, Pench Valley National Parks, Tigra Lake (Gwalior), Upper Lake (Bhopal), Gandhi Sagar (Mandsaur) etc

Leisure & Business Tourism

Pachmarhi, Khajuraho, Bhopal, Gwalior, Indore, Mainpat, Tamia, Jabalpur etc.

Investment Requirements – Tourism Perspective Plan & ADB Study

PERIOD INVESTMENT REQUIREMENTS (RS. CRORE)

Short Term (1-5 years) 308.30

Medium Term (6-10 years) 185.55

Long Term (11-20 years) 484.48

Total (Rs. Crore) 978.33 (Rs. Crore)

Source : Tourism Perspective Plan, MoT

Source : ADB India Tourism Infrastructure Study, 2007

• MP has numerous tourist attractions. • Focus on positioning MP in the national & International media . • MP was awarded the National Tourism Award 2007-08.• Some of its recent initiatives include:

– Heritage Meet for heritage property owners– Carnival in ‘Tourist Hubs’– Integrated national media campaign

Initiatives Of Madhya Pradesh Tourism

Public Private Partnership ( PPP )

PPP Approach

Leverage Budgetary Resources Need to improve efficiency in service delivery

Need

PPP approach

Attract private investments for infrastructure projectsGoal

Attracts market investments Reduces cost to public sector Improves service delivery

Advantages

Private Sector contribution for: - Financial investments - Management practices - Efficiency in service delivery

Public Sector contribution limited to: - Financial gap funding - Providing institutional commitment to project

Why Public Private Partnership ?

“ PPPs enable the public sector to benefit from commercial

dynamism, the ability to raise finances in an environment of

budgetary restrictions, innovation and efficiencies, harnessed

through the introduction of private sector investors who

contribute their own capital, skills and experience ”

Acceleration of Infrastructure Provision Faster Implementation Value for Money Partnership Building Enhanced Public Management Genuine Risk Transfer Output Specification Asset Performance & Reduced Costs Performance-Related Reward Private Investment Promotion Improved Quality of Service

Advantages of PPP

In Short, The Key Objective:

Government Private Sector

Partnership

Investments that are economically & socially beneficial

Expanding the possibilities for efficient infrastructure provision

through ‘Public-Private Partnership’

Project Development – A step beyond consultancy

Challenge of PPP

Projects Capital

The Missing Link – Project Development

Project Development: What it is (1/2)

Project concept Technical & Financial Evaluation Statutory & Regulatory Approvals Approvals for various grants &

subsidies Development of various contracts Setting up of a Project Company

(SPV)

Project Development: What it is (2/2)

Vendor Development Interaction with FIs Bid Documents & Bid Process

Management Selection of Operator Facilitation for financial closure Hand holding during

implementation

Project Development: What it is not

Construction and operation of a project: That is to be done by the selected

bidder Mechanism leading to

privatization

Project Development: Why To mitigate technical and financial risks by

association of expert bodies To manage bottlenecks related to approvals To obtain best value of the project for the

state To minimize the implementation time for a

project To leverage resources of government:PPP PPP leads to building up of capacity of local

people

Project Development: What it needs

A project anchor like State Government A project development agency A project development fund

1-3% of the project cost and To be recovered from the successful bidder

Upfront finalization of legal agreements and bidding criteria by the project anchor

Project Development and Promotion Partnership (PDPP)

PDPP Arrangement

Key Features Partnership for development with State Governments Hands on mode of operations Sharing of Risks and Rewards (result-oriented) Mixture of Govt. approach & Private efficiency

Key objectives Need assessment for development Integrated development Public Private Partnership

Leveraging limited public resources with private investments

Bringing in private sector efficiency and management skills

PDPP Approach

Identification of key development needs & potential projects

Integrated Development through Project Development Phased implementation

Potential benefits to be staggered 6-12 m, 1-3 years, more than 3 years

About IL&FS Infrastructure Development About IL&FS Infrastructure Development Corporation Corporation

Genesis

Mandate: Commercialization of infrastructure projects Value added financial services

Initial JV format: Central Bank of India (CBI) Unit Trust of India (UTI) Housing Development Finance Company Limited

(HDFC)

IL&FS formally commenced business in 1988

Name %Government Shareholding

-Life Insurance Corporation OF India 26.98 Central Bank of India 9.18 State Bank of India 7.68 Abhu Dhabi Investment Authority 12.73

Sub-total 56.57

Private Shareholding Housing Development Finance Corporation 13.10 ORIX Corporation, Japan 23.82 IL&FS Employees Welfare Trust 6.51

Sub-total 43.43

TOTAL 100.00

Current Shareholding

IL&FS Infrastructure Development. Corp. Ltd. (IL&FS IDC)

100% subsidiary of IL&FS

Project Development Advisory arm

More than 200 professionals

Executing Project Development Mandates in ~ 20 states

IL&FS / IIDC provides Complete Process and Programme Management from the ‘Concept’ Stage to ‘Implementation’

We are ‘Project Developers’ & not just Consultants

Sectoral Expertise

Power Water Special Economic Zones

Telecom Sanitation Solid Waste Mgt

Ports Sewerage Environment

Airports Urban Infrastructure Rehabilitation of Assets

Roads & Bridges Health E Governance

Tourism Education Municipal Finance

In each sector, IL&FS has established specific replicable, stand alone, prototypes

Representative Government Partnerships

Government of India (Ministries)

Commerce Textiles Information Technology

Central Public Sector Undertaking

ONGC Coal India Limited MMTC

State Governments

Tripura Assam Nagaland Uttranchal Jharkhand Chattisgarh Tamil Nadu Andhra Pradesh Kerala Karnataka Orissa Madhya Pradesh Maharashtra Gujarat Rajasthan

IL&FS IDC has offices at:Mahindra Towers, New Delhi(corporate head office)Front offices at:Jaipur, Raipur, Patna, Guwahati,Calcutta,Ahmedabad, Mumbai,Bhopal, Vadodara, Rajkot,Shimla, Ranchi, Tirupur,Bhubaneshwar, Banagalore, Hyderabad, Chennai, Chandigarh,Dehradun,Thiruvanthapuram, & Kathmandu (Nepal)

Delhi

Mumbai

Chennai

Kolkata

Hyderabad

Ahmedabad

Bangalore

Bhopal

Jaipur

Goa

Vadodara

Gangtok

Srinagar

Thiruvananthapuram

Belgaum

Agartala

Chandigarh

Raipur

Rajkot

Tirupur

Kota

Guwahati

Shimla

Patna

Ranchi

Bhubaneswar

DehradunKathmandu

Geographical spread

Select PDPP Arrangements Andhra Pradesh Assam Bodoland Territorial Council (BTC) Chhattisgarh Himachal Pradesh Jharkhand Kerala Orissa Punjab Tripura Uttaranchal Gujrat West Bengal Karnataka

Strengths of IL&FS IDC

Have several Success Stories to tell Experience in structuring projects in PPP formats Linkages with Major Private Sector Developers - Good

will in the market and confidence of industry in IL&FS Strong relationships with Central Government Associations with State Government clients Associations with Financial Institutions and multi

laterals Ability to draw upon diversified services from IL&FS

Group companies Ability to tie up and utilise local resources

Select Success Stories

Jal Mahal Integrated Tourism Project

Project Scope: Development of Jal Mahal and Mansagar Lake area into a sustainable, eco friendly tourism destination Including lake restoration, monument conservation and lake precincts development

Project Cost: Rs. 200 Crores

Concession agreement signed

Development of Tijara Fort

Project Scope: Development of tourism and hospitality facilities within Tijara Fort

Project Cost: Rs. 25.0 crores

Private Sector partner selected

Albert Hall Museum: O&M

The Project: restoration and conservation of the Museum

building and conservation and documentation of the antiquities contained therein.

PSP to co-finance the facilities and O&M Govt of Rajasthan would continue to hold the

museum inventory on its books. 

Lakes’ Restoration and Management

GoR has identified 5 lakes for undertaking Detailed studies: Nakki – Mt. Abu Fatehsagar, Pichola

– Udaipur Annasagar – Ajmer Sarovar - Pushkar

Conservation of Quila Nabha Quila is 18th century historical fort

located in the heart of the walled city of Nabha, Punjab.

Unsolicited Proposal received from Nabha Foundation, a Trust incorporated by Khemka Family

Project structured on Swiss Challenge

Restoration and Conservation of Quila Complex and Reuse as the Business School

Lease Period : 66 years Minimum Investment for

Restoration : Rs 15 Cr

Rajinder Kothi

Redevelopment of Rajinder Kothi at Patiala in Punjab as Heritage Hotel Restoration and Conservation

of the Property Reuse of Property as

Heritage Hotel Lease Period : 30 years Nimrana Hotels Pvt Limited

selected as concessionaire through competitive bidding

Agartala Budget Hotel: Milestones

Land Allotment from GoT

Roots Corporation Limited set up “Ginger” Hotel.

Project Started Commercial Operation from 21st August, 2007.

NEC Grant of Rs. 9 million through State Government as Viability Gap Funding. Already released to Roots Corporation.

1st hotel project promoted by reputed

Hospitality chain in the NER

Guwahati Budget Hotel: Milestones

Land Identification & Allotment Roots Corporation agreed to set up

“Ginger” Hotel. Agreement signed with GoA in January 07. Project construction started – foundation

completed. Hotel to be commissioned by October

2009.

Tezpur Budget Hotel: Milestones

Feasibility Studies completed Land Identification & Allotment Sarovar Group agreed to set up three

star category hotel in Management Contract.

Developer identified - Mentok RI Projects Pvt. Ltd has tied up with Sarovar.

Hotel to be commissioned in 24 months.

Crowborrough Hotel: Milestones

Mandate received from MTDC Feasibility Studies Completed Project Structuring – approved by

GoM/MTDC Bid Process Management

completed Private Developer selected. However the 3rd highest

bidder went to court and presently the matter is subjudice

Budget Hotel at Dimapur

GoN has given mandate for conversion of existing Dimapur Tourist Lodge into a Hotel & Commercial Complex.

Feasibility Study Completed. Project Structuring in process Bid Documents approved by GoN. Awating clearace of part land with

Indian Airlines

Solang Nala Ropeway Project

Project Size: Rs 1200 mio Project links Solang to Manali Passenger Ropeway with provisions ski accessories

Restaurants at Lower and Upper Terminal Points. Upgradation of existing Bar Lift Preparation of Ski slopes Establishment of Ski-centre Area Management including Environment Management

IIDC partnered with Himachal Govt. to identify developer.

Agreements signed with Govt. realising higher share of revenues

from project compared to suo moto bid received initially

International Convention Center, Hyderabad

Hyderabad International Convention Center Project developed by IL&FS IDC is operational since January 2006 Developer: Emaar Properties PJSC, Dubai

Convention and Exhibition- 3,000+ paxBusiness hotel- 300 room A residential community encompassed around a 18 hole world-class golf course

Implementation by 2 SPVs through a Private Sector Developer

Project Cost : Rs. 308 Crore

Role of IL&FS IDC: Comprehensive Project Development advisory to GoAP

International Convention Center, Thiruvananthapuram

Status - At award stage: Preferred bidder has been identified (July 2006)

Project Structure Convention Center-1500 pax plenary, 500 pax hi-

tech hall, Exhibition spaces Hotel/Resort/Service Apartment- 150 rooms Retail space/Theme Park- upto 7000 sq.m. Implementation by a private sector led SPV with

equity holding by Government of Kerala Project Cost: Rs. 140 Crore Role of IIDC: Comprehensive Project Development

advisory services to GoK

Conclusion

Conclusions

Need to develop tourism infrastructure PPP is the best mode PDPP and Project Development are the

tools for converting projects from paper to ground

Government’s role should be limited to providing land, regulatory issues to avoid over exposure and exploitation

This approach has financial benefits as well as improvement in the service sector