SATYAM- The great (Un)Truth

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pankajp	Debt and equity	#21	[-]
Posts: 330 (01/29/09 19:55:13) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	PPP models normally have debt:equity ratio of 70:30. 70% of total amount required for is provided by financial institutions and provision of financial closure within stipulated time frame ensures this. So, there is no question of big private firms having adequate financial muscle to ensure success of PPP. Delhi Metro will continue even after retirement of present management of DMRC. Who will finance replacement of assets (Rolling stock and other assets) having codal life of say 30-40 years? Do we again expect Central/Delhi government to provide lump sum grants to DMRC for replacement of these assets? May be PPP model will be of help at that stage.
subbu98		#22	[-]
Posts: 177 (01/30/09 09:20:42) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Who will provide rolling stock? That's a very good question. It SHALL be the government. Even in a successful BOT model, the concession period would have been over and the asset handed over if at all.
prashant73	discussion derailed	#23	[-]
Posts: 35 (02/16/09 11:52:09) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	A very stimulating and vibrant discussion seems to have suddenly derailed. Let us put the issue back on track. So what is the conclusion. Is BOT model workable for Metro projects? If not, why? Will BOT Metro projects be more expensive than Metro projects carried out through govt procurement? If so, why? Or should we take Mr Sreedharan words as gospel truth and refuse to see any other point, and close the discussion?
pankajp	PPP	#24	[-]
Posts: 331 (02/16/09 19:58:43) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	What is amazing is that DMRC itself is following PPP route for real estate development. Then, what is the logic of DMRC in opposing PPP route for construction of Metro. One interesting news: http://steelguru.com/news...umbai_Metro_Phase-II.html So, extension of Mumbai metro thru PPP route seems to have stalled due to economic meltdown. Let us again wait and watch! Last Edited By: pankajp 02/16/09 20:02:42. Edited 1 times.
karticc	PPP v/s DMRC pattern	#25	[-]
Posts: 115 (02/17/09 02:52:18) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Sreedharan, who served as a consultant for Hyderabad Metro project, remarked that making 'available 296 acres of prime land to BOT (build, operate and transfer) developer for commercial exploitation was like selling the family silver'. He also felt that the land concession could lead to a 'big political scandal some time later'. 'It is apparent the BOT operator has a hidden agenda which appears to be to extend the metro network to a large tract of his private land holdings so as to reap a windfall profit of four to five times the land price.' Where is PPP vs DMRC model in this? http://in.news.yahoo.com/...erabad-metro-comment.html Kartic Chauhan
prashant73	back full circle	#26	[-]
Posts: 36 (02/18/09 05:38:32) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Haven't we come back full circle. I guess that means it is time to close this discussion.
karticc	DMRC pattern	#27	[-]
Posts: 116 (02/18/09 23:05:27) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	State eyes Delhi model for 2nd Metro line Ashley D'Mello I TNN Mumbai: The Delhi model for building a Metro rail link, which showcases a line funded by the government instead of by the private sector, has been highlighted once again as a possible alternative model for the second line of the Mumbai Metro from Charkop-Bandra-Mankhurd. This model has come up for discussion among transport circles as the Public Private Parternership(PPP) model for the second line-in which private companies play a leading role in the construction and operation of the line- failed to garner any bids last Friday, the final day of the bidding. This was despite the fact that the bidders were granted extra time. Senior officials involved with the planning said that if there are no bids by March 15, then the government will have to consider other options and the Delhi model will be a strong one. The Delhi model will entail government funding while the PPP model will mean that the private sector plays a leading role in funding, constructing and operating the line. The second line of the Mumbai Metro, which is slated to cost over Rs 6,500 crore failed to get bids last Friday, even though two consortiums led by the Ambani brothers were short-listed. The Delhi model, which has been successful, is being promoted by the chairman of the Delhi Metro Rail Corporation chairman, E Shreedharan. He has made no secret of his dislike for the private sector being a major partner in the building of the Metro rail links across the country. Shreedharan has come out strongly against the private sector constructing public transport projects in the city and has voiced his opinion against the Hyderabad Metro which was being built based on a PPP model. Metro circles state that Shreedharan was of the opinion that as most of the transport projects were not profit-yielding, they were best handled by the government as was the case in Asian countries and the US.
pankajp	where are the funds?	#28	[-]
Posts: 332 (02/18/09 23:17:03) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Funding of Mumbai Metro through DMRC Model is always possible provided there are adequate funds available with Central/State governments. Or do we expect more fiscal deficit (which is already high) in budget of central government, just to construct particular line of Mumbai Metro. As the following link states: http://steelguru.com/news...umbai_Metro_Phase-II.html Many bidders estimate the project cost at around Rupees 12,000 crores [against government's estimate of Rupees 7660 crores] When we compare this cost of Rupees 12,000 crores with annual capital plan of Indian Railways or with that of NHAI (both being less than Rupees 10000 crores), then the fund crunch is clear. Metro cities have their own requirements, which cannot consume the capital expenditure requirements of India as a whole. This is the justification for PPP model.
prashant73	Mumbai Metro	#29	[-]
Posts: 37 (02/19/09 03:01:38) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Getting govt to build the Mumbai metro is a no-brainer. We have been doing that for centuries. And there is nothing special about a Mass Transit system project that it should be treated differently than every other Infrastructure project. Govt has already issued a clear mandate that they want to build the Infrastructure using PPP. A Metro system is not a Nuclear power plant or a project of strategic importance that the private sector cannot be involved. If the farebox revenues themselves cannot generate project finance revenues, there is a viability Gap funding to take care. Mumbai already has an efficient govt owned Bus system and a govt owned suburban Rail system. If the people of Mumbai think they need an additional Mass transit system, then this 'nice to have' infrastructure should best be built with Private Capital. Govt can instead invest in projects which are essential in nature. If the Private sector did not bid, MMRDA have got their project cost terribly wrong. They can reassess their project cost and invite bids again. On the flip side, if there was an overwhelming response, then we would have smelled a rat. The Govt would have been accused of selling family silver again.
pankajp	For information only	#30	[-]
Posts: 333 (02/19/09 22:28:44) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	http://steelguru.com/news...dhepura_loco_venture.html
prashant73	Global NIT's	#31	[-]
Posts: 38 (02/20/09 22:31:37) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	If we don't get a response from the private sector, we should investigate the possible reasons and make a renewed attempt. This may be a peripheral point, but I happend to see some of IR's Global NIT in the Economist and FT. The way the NIT was drafted, it was possible only for an officer of Indian Railways to really comprehend the NIT. The text was drafted poorly with all sorts of Railway based abbreviations (possibly with a noble intention to save some money for IR on advert cost). The people have to atleast get a sense of the work in the NIT for them to feel enthusiastic about paying for the tender documents. In Global tenders, we ask for tender document fees in rupees only payable in demand draft in some bank in India. Are we really serious about getting global tenderers to bid? I felt that we published the NIT just for the sake of calling it a global tender. It was done most half-heartedly. When we had spent so much in global advert anyways, we could have atleast given a careful thought while drafting the NIT with commonly understood terminology. We must accept online payment in equivalent USD or GBP for global tenders. Otherwise, its meaningless to call it a global tender.
pkatre		#32	[-]
Posts: 142 (02/25/09 03:03:10) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Railways is a very niche market and Global Firms who operate in this market are fully aware of the lingo used by IR. All the major firms like Bombardier, Alsthom, ABB etc are already doing business with us. In these times of recession it is these "Global Firms" who should be trying to learn our jargon rather than the other way round. And it's about time we stopped looking at everything "Global" with such awe. The only thing that is global today is the endless financial turmoil. Parag.
prashant73		#33	[-]
Posts: 39 (02/25/09 12:52:51) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Parag, Whether we should be awestruck with 'Global' or remain arrogant with 'local' is perhaps a subjective matter based on individual perception. However, I do respect your views. My response was specific to the contents of the link provided. When IR published a global NIT, I presume it was done with a hope of getting global bids. If we really didn't care about propective global partners, then there was no need to publish in the Economist. Our Times of India was good enough even to target Bombardiers, ABB etc as they also have offices in India. I had mentioned that this issue may be only peripheral. But if we were keen on getting global bids, then writing "DME (W) invites ---at Rae Bareli (U.P)", makes it more difficult for a global audience and it would not have cost us much had we avoided using abbreviations. And not allowing foreign currency or online payment, doesn't help our cause either. Prashant
prashant73	Contents of NIT	#34	[-]
Posts: 39 (02/25/09 14:35:55) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	The core issue in the case of "Coach factory at Rae Bareli" is about information provided in the NIT. We wanted a private partner in a JV to manufacture and supply coaches. The NIT (or more correctly 'Notification for Request for Qualification') did not mention what production capacity we had planned for, in how many years we intend to start production and type of coaches and the proportion of equity in the JV. The bidders have to get a sense of the work and the associated risks. Alstom, ABB, Bombardier would be happy to only supply coaches, but they would be more weary of setting up manufacturing plant as JV partner. So although we have been doing business with them over many years, this is a new area for us as well as them. It is worth investigating reasons for poor response and trying again.
pankajp	link	#35	[-]
Posts: 335 (02/26/09 00:57:02) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	http://www.indianrailways.gov.in/tenders/ppp/RCF-RFQ_160109.pdf Above link shows availability of required information on Internet.
prashant73		#36	[-]
Posts: 40 (02/26/09 01:27:35) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	The advert carried only the first page. Ofcourse, the entire information will be provided in the detailed docs on the link given in the NIT. But only people enthused with the NIT would care to download and read the fine print. And that was exactly my point. We could have added one more line in the NIT, to summarise the overall scope of project. And I am not suggesting that this is the reason, why we got no response. All I am suggesting is that we need to investigate the reasons for the poor response. Why would any firm not want to manufacture something for which there is a captive market and an assured demand? It's worth having a relook. If nothing else, it will give us valuable insights on how to go about the next time.
pankajp	close this topic	#37	[-]
Posts: 336 (02/26/09 20:04:38) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	I agree with your views Prashant Sir Justification for closure of this topic is "lack of participation". Three participants cannot continue to write and stretch this topic
baburaja	ppp	#38	[-]
Posts: 83 (03/01/09 23:35:37) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	ppp is public pays perpetually and not public private partnership as generally understood. mr. sreedharan, who has seen the country and the way it operates, has his views clear: eventually the public pays, might as well make it pay upfront.
pankajp	pay upfront	#39	[-]
Posts: 338 (03/02/09 01:53:20) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	"Public pay perpetually, might as well pay upfront" So, the public must slog, earn daily wage and pay 70% of its daily earnings in taxes [both direct and indirect] so that Big monuments like "Delhi Metro" can be operated for convenienece of citizens of Delhi Pay upfront justification is valid only if Delhi metro is constructed from funds generated by contribution of Delhi citizens only.
karticc	PPP or else	#40	[-]
Posts: 117 (03/02/09 03:40:47) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Well, the option to government funding public infrastructure, is selling the public a bum deal like what the state of AP did with its metro. Why will some private entrepreneur invest money if he knows that the project will not make money? If the deal is lightly sweetened, then it is an ok proposition, but in Hyderabad's case, the deal was so sweet that it could have given diabetes to the whole of the country. It is darn sight better for government to make such investments in infrastructure and hope the public shall move away from cars than to make ever increasing number of flyovers and have road rage shootings. Under JNURM, the central government is spending Rs 4000 crores on city buses for a few cities. It's money well spent. Ditto for investment in railways Better than Rs 60000 crores spent on bailing out farmers who can't eke out a living in a place like Maharastra, and nothing to show for it, perhaps not even votes. (Whereas same farmers in Punjab have made Ludhiana the capital of Mercedes Benz in the country.) Or spending huge amounts of money to keep highly cost ineffective companies in business? Like Kolar gold mines Ltd? Kartic Chauhan

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