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					    (c)   Net funds required for completion of balance PMGSY projects including
    two years of projection of PMGSY-II –
        - Funds required for completion of works already sanctioned - Rs. 34,218
    crore
        - Funds required for balance sanctions  –Rs 1,85,438 crore
        - Total funds needed                    - Rs. 2,19,656
        - Funds available in year 2011-12       –Rs 20,000 crore
                                        th
        - Net fund required during 12 FYP (at 2010-11 prices)-Rs.1,99,656 crore
                                                        Say - Rs. 2,00,000 crore

    (d)     Current source of funds: The following are the current sources of funds:

              (i) Cess on High Speed Diesel (Rs. 0.75 / litre)
              (ii) Budgetary Support
              (iii) ADB funding
              (iv) World Bank funding
              (v) NABARD Loan
    With present sources of funds, the project is not likely to be completed in time,
    therefore, a additional financial support would become necessary.
    2.4    Availability of funds in last 11 years.: Under PMGSY, the position of
    availability of funds and release is as given below Table-2.2:
    Table-2.2                                         (Figures in Rs. in crore)
S.        Year (s)   Allocatio   Allocati   Release   Relea    Release      Release      Release      Total
No.                  n           on         for       se for   under        under        out     of   Releas
                     (CESS)      (WB/       Progra    Admn     ADB          WB           NABAR        e
                                 ADB)       mme       . Exp.   assistance   assistance   D Loan
                     2,375       -          2,435     0                                               2,435
1         2000-01
                     2,375                  2,493     7                                               2,500
2         2001-02

3         2002-03    2,340                  2,497     3                                               2,500

                     2,220                  2,299     26                                              2,325
4         2003-04
                     2,220                  2,111     37       93           220                       2,461
5         2004-05

6         2005-06    4,235                  3,770     40       193          218                       4,220

                     3,726                  3,770     40       193          218                       4,220
7         2006-07
                     3,900       2,600      3,834     66       1,950        650          4,500        11,000
8         2007-08

9         2008-09    4,530                  5,380     151      2,000        250          7,500        15,280

                     4,183                  10,390    140      800          10           6,500        17,840
10        2009-10
                     4,434       -          21,325    185      800          90           -            22,400
11        2010-11

          Total      36,538      2,600      60,303    693      6,028        1,656        18,500       87,181
2.5    Proposed PPP mode

 It is proposed to compliment the implementation of PMGSY through a few pilot
projects mooted in the Public Private Partnership (PPP) mode. A few pilot projects
of construction, up-gradation and maintenance of rural roads can be taken up in
willing States through the modified EPC mode, which if successful, can be scaled up
in other States.

The proposed methodology is described below:

a) Rural road-works aiming at either providing new connectivity or up-gradation
    or a combination of the two in a specific area which could be a block or a group
    of blocks, under PMGSY can be given on a concession basis to a private partner
    (hereinafter referred to as the Concessionaire) in an economically viable package
    of about Rs. 75-100 crore. The contracting would be based on the principles of
    EPC, which would include the following:
    i. Financing of construction, up-gradation and maintenance for seven years
       (two-year construction period and five-year period for routine maintenance),
   ii. Construction, up-gradation or renewal of selected roads (hereinafter referred
       to as project roads), and
  iii. Maintenance as per pre-determined performance parameters or service-level
       standards during the period of the concession.
b) The bidding parameter would be the lowest annuity sought. A periodic
    escalation clause to factor inflation would be in-built in the financial design.
c) The Concessionaire may be given an opportunity to carry out detailed
    investigations pertaining to traffic, soil and material, required for designing the
    road for a period of 10 years as per PMGSY guidelines. The State Government
    may prepare a DPR on the basis of the PMGSY guidelines that can be used as
    the public sector comparator.
d) The concession should be formulated in such a way that the Concessionaire
    would have to guarantee the performance of the roads in the package for the
    period of 10-year traffic for which it has been designed.
e) The payment of annuity will be performance based, i.e. linked to the
    maintenance standards, usability and availability of the road for the users. These
    will be monitored by an Independent Engineering firm and payment will be
    made on the ‘assured lane km’ available for the period of operations, on a model
    of payment similar to the one adopted by NHAI in its BOT annuity road
    projects. The assured lane km will be calculated on the lane km available for the
    period of payment and an assured quality of the riding surface (roughness index).
f) NRRDA would develop construction standards and service-level standards based
    on which maintenance performance would be validated periodically by an
   Independent Engineering firm. These would be based on IRC standards and
   would form a part of the concession document.
g) The Concessionaire would be selected on the basis of a single stage two-part
   transparent competitive bidding process; the selection would be based on the
   evaluated lowest rate of anticipated equated annuity amount for the package
   quoted by the technically qualified bidders.
h) The anticipated equated annuity amount, i.e., the amount required to build new
   roads as well as to up-grade the rural road network as per PMGSY guidelines
   and norms (2001 population census), would be extended by the Ministry of
   Rural Development over a period of seven years. The financial burden would be
   shared by the Central and the State Government in the ratio of 93:07, which
   broadly reflects the respective shares of the Centre and State Governments under
   PMGSY.
i) An appropriate mechanism for the payment of annuity to the Concessionaire will
   be worked out to ensure that the project gets funds on time through various
   streams.
j) This model may adversely impact small contractors as they may not have the
   capacity to invest nor borrow at competitive rates for funding the construction
   costs. This may push up the cost of project in certain remote areas. In order to
   address this risk, the option of part funding the project during the construction
   period to the extent of 40%-60% of the cost of construction paid on completion
   of specific milestones and the rest paid through an annuity, may be explored. In
   this model, a fixed grant will be stated by the bidding authority at the time of
   project bidding and the lowest annuity amount would be quoted by the bidder.

Action by the State Governments: The State Governments would be encouraged to
consider the above proposal and methodology for PPPs in rural roads through
modified EPC contracts.

2.5.1 Year-wise funds required, if projects are to be completed by year 2017

              2012-13             -     Rs. 40,000 crore
              2013-14             -     Rs. 40,000 crore
              2014-15             -     Rs. 40,000 crore
              2015-16             -     Rs. 40,000 crore
              2016-17             -     Rs. 40,000 crore


2.6   Exploring new NABARD Loan

      - NRRDA has taken a total amount of Rs. 18,500 crore as loan from
  NABARD for meeting the commitments of Bharat Nirman. While taking the loan
  a Tripartite Agreement has been signed on 27-09-2007 between Ministry of Rural

				
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