Madhya Pradesh Destination Unveiled Possibilities of

1
Madhya Pradesh Destination Unveiled
Possibilities of development of tourism project
through PPP in MP
A Presentation By
ILFS Infrastructure Development Corporation
Ltd. May 2008
2
In this presentation

• Tourism in India
• 2. Tourism in Madhya Pradesh
• 3. Public Private Partnership ( PPP)
• 4. Project Development
• 5. About ILFS
• 6. Project Development Promotion Partnership
  PDPP
• 7. Select Success Stories
• 8. Conclusion

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Tourism in India Some Facts Figures
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Tourism in India

• JBIC ranked India as the fifth most attractive
  investment destinations.
• Conde Nast Traveler, one of the worlds 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.

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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

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• 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.

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• 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

8
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 Ss of tourism
  experience tourism

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Tourism in India Major concerns

• 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

• Need Make projects lucrative for private sector
  Investment

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Tourism in Madhya Pradesh
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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.

Pachmarhi
Bhimbeteka
Kanha National Park
Khajuraho
Sanchi
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Major Tourism Circuits

• 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

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Attractions along key circuits
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Investment Requirements Tourism Perspective
Plan ADB Study
Source Tourism Perspective Plan, MoT
Source ADB India Tourism Infrastructure Study,
2007
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Initiatives Of Madhya Pradesh Tourism

• 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

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Public Private Partnership ( PPP )
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PPP Approach
Goal

• Attract private investments for infrastructure
  projects

• Leverage Budgetary Resources
• Need to improve efficiency in service delivery

Need
PPP approach

• 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

• Attracts market investments
• Reduces cost to public sector
• Improves service delivery

Advantages
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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

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Advantages of PPP

• 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

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In Short, The Key Objective
Expanding the possibilities for efficient
infrastructure provision through Public-Private
Partnership
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Project Development A step beyond consultancy
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Challenge of PPP
Capital
Projects
The Missing Link Project Development
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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)

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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

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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

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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 governmentPPP
• PPP leads to building up of capacity of local
  people

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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

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Project Development and Promotion Partnership
(PDPP)
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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

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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

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About ILFS Infrastructure Development
Corporation
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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)
• ILFS formally commenced business in 1988

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Current Shareholding

• 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
• ILFS Employees Welfare Trust 6.51
• Sub-total
  43.43
• TOTAL
  100.00

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ILFS Infrastructure Development. Corp. Ltd.
(ILFS IDC)

• 100 subsidiary of ILFS
• Project Development Advisory arm
• More than 200 professionals
• Executing Project Development Mandates in 20
  states
• ILFS / IIDC provides Complete Process and
  Programme Management from the Concept Stage to
  Implementation

We are Project Developers not just Consultants
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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, ILFS has established specific
  replicable, stand alone, prototypes

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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

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Geographical spread
Srinagar
Shimla
Chandigarh
Kathmandu
Delhi
Gangtok
Jaipur
Guwahati
Patna
Kota
Agartala
ILFS IDC has offices at Mahindra Towers, New
Delhi (corporate head office) Front offices
at Jaipur, Raipur, Patna, Guwahati, Calcutta,Ahme
dabad, Mumbai, Bhopal, Vadodara, Rajkot, Shimla,
Ranchi, Tirupur, Bhubaneshwar, Banagalore,
Hyderabad, Chennai, Chandigarh, Dehradun,Thiruvan
thapuram, Kathmandu (Nepal)
Rajkot
Ranchi
Ahmedabad
Bhopal
Kolkata
Raipur
Vadodara
Bhubaneswar
Mumbai
Hyderabad
Belgaum
Goa
Bangalore
Chennai
Tirupur
Thiruvananthapuram
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Select PDPP Arrangements

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

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Strengths of ILFS 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 ILFS
• Strong relationships with Central Government
• Associations with State Government clients
• Associations with Financial Institutions and
  multi laterals
• Ability to draw upon diversified services from
  ILFS Group companies
• Ability to tie up and utilise local resources

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Select Success Stories
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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

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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

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Albert Hall Museum OM

• 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 OM
• Govt of Rajasthan would continue to hold the
  museum inventory on its books. 

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Lakes Restoration and Management

• GoR has identified 5 lakes for undertaking
  Detailed studies
• Nakki Mt. Abu
• Fatehsagar, Pichola Udaipur
• Annasagar Ajmer
• Sarovar - Pushkar

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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

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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

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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
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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.

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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.

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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

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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

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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

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International Convention Center, Hyderabad

• Hyderabad International Convention Center Project
  developed by ILFS IDC is operational since
  January 2006
• Developer Emaar Properties PJSC, Dubai

• Convention and Exhibition- 3,000 pax
• Business 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 ILFS IDC Comprehensive Project
  Development advisory to GoAP

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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

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Conclusion
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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
• Governments 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

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Thank You