Satyanarayana N. Kalidindi

Risk perception analysis of BOT road project participants in India

Despite massive investment opportunities and the establishment of a framework for private sector participation in highway infrastructure development programmes in India, private investment (including foreign direct investment) in this sector is not up to the expected level. A high degree of risk exposure, disagreement on many risk issues among major stakeholders, and the absence of adequate government guarantees have been identified as some of the major reasons for this lukewarm response. This paper discusses the outcome of a risk perception analysis carried out to evaluate the risk criticality, risk management capability, risk allocation/sharing preference, and factors influencing risk acceptance of major stakeholders. A survey was conducted among senior project participants such as government officials, promoters, lenders and consultants of Indian BOT road projects. Eight types of risks have been identified as very critical in the Indian road sector under BOT set up with traffic revenue risk being the most critical. Though there is fair agreement among survey respondents with respect to the risk management capabilities of stakeholders, their preferences of allocations are divergent. The significant factors influencing the risk acceptance of each stakeholder are identified through regression analysis. The study reveals that the factors and their relative influence on the risk acceptance of stakeholders are considerably different.

Modelling and assessment of critical risks in BOT road projects

Over the years, many private sector participation (PSP) models have been evolved for infrastructure procurement and the Build‐Operate‐Transfer (BOT) model is one of the most common approaches used for the same. Private infrastructure projects under BOT arrangement have a complex risk profile and to a considerable extent, the success of any BOT project is influenced by the degree to which various project risks are managed. The major steps involved in risk management of a project are risk identification, risk assessment and the processes of prioritization and response to the risks. The conventional risk assessment approaches may not be effective in privatized infrastructure projects because of the fact that, they have very long project lifecycle with many country and sector specific risk factors. The assessment of complex risks is often a difficult task when past data on similar risks are not available. In this research, a risk probability and impact assessment framework based on fuzzy‐fault tree and the Delphi method is proposed. The framework includes extensive scenario modelling of critical risks in projects and systematic processing of professional judgement (subjective knowledge) of experts and is developed and demonstrated in the context of critical risks in Indian BOT road projects. Detailed scenario modelling of most critical risks such as traffic revenue risk, delay in land acquisition, demand risk and delay in financial closure are also presented. The proposed risk assessment framework is generic and can be applied with appropriate modifications to suit any complex developmental project where past data is inadequate for risk assessment.

Criteria influencing debt financing of Indian PPP road projects: a case study

Purpose – Public private partnerships (PPP) projects are characterised by highly leveraged capital structure. Lenders who provide the major portion of financing in the form of debt are more concerned with the downside risks and the measures to mitigate the risks. Lenders, thus, look into the risk factors and mitigating measures that could influence the projects debt servicing capability while making the credit decisions. The purpose of this paper is to identify the various aspects of PPP road projects that lenders look into while making the decisions to extend project finance loans to PPP road projects.Design/methodology/approach – Case study research with four Indian lending institutions provides primary evidences from the interviews on the aspects considered during credit decision making. The primary evidences are collaborated with secondary evidences such as loan proposal and information memoranda of the PPP road projects undertaken by the case study organisations.Findings – The study identifies the va...

A Comparative Analysis of Public- Private Partnership (PPP) Coordination Agencies in India: What Works and What Doesn’t

Public-Private Partnership (PPP) coordination agencies are often used to assist government agencies in structuring PPP arrangements. Very few studies have compared the performance of various coordination agencies to understand the characteristics that define an effective coordination agency. The authors study three coordination agencies that were involved in projects in the water and sanitation sector in India and observe their performance across five parameters: project structuring, commercial risk management, relational risk management, project handover, and extent of institutional strengthening. The authors find that agencies with administrative expertise in handling project structuring and bid process, coupled with PPP-specific expertise and an understanding of PPP risks, are a necessary but insufficient condition for project success. In conjunction, high involvement of the coordination agency through the lifecycle of the project or measures that enhance the capacity of government departments to understand and monitor PPPs are required to ensure that real benefits are delivered to stakeholders.

Competencies and urban Public Private Partnership projects in India: A case study analysis

Abstract In India, the Public Private Partnership (PPP) model for project implementation has been gaining prominence as municipalities attempt to meet a growing demand for infrastructure services. However, weak competencies within urban local bodies (ULBs) present one of the primary bottlenecks to implementing PPPs in the delivery of urban services. In this paper we attempt to understand the kinds of competencies that are prevalent within ULBs in India, competencies that are often absent, strategies that are currently used to bridge these competency gaps, and approaches that ULBs should follow in order to create a more robust environment for PPPs. In order to do so, we first describe a competency framework for implementing urban PPP projects. We then adopt a case-based research approach to analyze five urban PPP projects. The case study analysis indicates that project development competencies are supplemented through the engagement of PPP coordination agencies. However, there are larger competency gaps in the area of project governance. The outcomes of this research study contribute to a growing body of knowledge on the performance of PPPs in developing countries and suggest areas for improvement in the existing institutional frameworks for urban PPP projects.

Interrelationships of factors causing delays in the relocation of utilities

Purpose – Relocation of utilities is a major source of delay in Indian infrastructure projects. This delay is particularly critical in road and bridge construction projects. The purpose of this paper is to identify the various factors and also the interrelationships between the factors which influence the delays in the relocation of utilities. Design/methodology/approach – Case studies were conducted on 11 road and bridge projects in India with varying levels of complexity and size. Factors causing relocation delays were identified using computer aided qualitative analysis methodology. Cognitive mapping technique was used to map the interrelationships between the factors and to identify the critical delay factors. Findings – Factors affecting delays were identified across two groups, namely, technical and organizational factors. The study offers insights into the kinds of interactions of factors that can lead to delays in a project. The critical factors causing delays were identified as slow response from...

Modeling and assessment of competencies in urban local bodies for implementing PPP projects

Purpose – The weak competencies in urban local bodies (ULBs) for implementing public private partnership (PPP) projects are recognized as a major hurdle in uptake of the PPP model in India. Competency‐based management provides a systematic solution for addressing the competency gap in ULBs, which comprises four components: competency identification, competency assessment, competency development and competency monitoring. The purpose of this paper is to discuss the development of a PPP competencies assessment (PCA) tool for assessment of competencies in ULBs for implementing urban PPP projects.Design/methodology/approach – The analytical hierarchy process (AHP) was used for modeling of competencies involved in urban PPP projects. The application of the PCA tool was showcased with a case study of PPP projects in the municipal solid waste management (MSW) sector.Findings – The PCA tool is effective in assessment of competencies in ULBs. The outputs obtained from the PCA tool provided detailed information on ...

External agencies for supplementing competencies in Indian urban PPP projects

Purpose – The purpose of this paper is to analyze involvement of external agencies for supplementing competencies in Indian urban public private partnership (PPP) projects. There are two key aspects which need investigation before making a decision to involve external agencies in urban PPP projects: reasons for involvement of external agencies and competencies to be supplemented by these agencies.Design/methodology/approach – A questionnaire survey was conducted among urban PPP experts and ULB representatives for investigating the above aspects. A case study analysis with five urban PPP projects was also performed for investigating involvement of external agencies in the practical realm.Findings – The reasons for involvement of external agencies to supplement competencies rated high in importance are improvement in quality of deliverables, making available unique competencies for implementing urban PPP projects and transparency in implementation of urban PPP projects. The five most important competencies ...

Developing a clients’ charter and construction project KPIs to direct and drive industry improvements

Purpose The purpose of this paper is to present a case, with live examples from a construction industry development initiative in India, for developing a proactive construction clients charter; and a core set of key performance indicators (KPIs), as basic tools for facilitating the expectations of this special issue in “securing clients’ organisational objectives and project aspirations throughout construction project lifecycles” apart from empowering construction industry improvements in general. Design/methodology/approach Having identified 19 critical issues in the Indian construction industry at two construction clients-academia roundtables, two of the “action teams” formed to address specific issue sets, separately developed a relevant construction clients charter and useful KPIs, respectively, through a combination of literature reviews and brainstorming conference calls, along with iterative drafts of, and feedback on interim outputs. Validation of “working papers” presented at a “Consolidation Roundtable” of construction clients and their consultants, elicited further suggestions for fine tuning of final outputs. Findings The charter was formulated in structured steps, including identifying “priorities” under four categories: overall, expectations from supply chains, by supply chains and by end users. The six sub-heads of the charter are on procurement, design, innovation and technology, project execution, human resource development and worker welfare, and quality, safety and sustainability. The “suggested KPIs” for building clients in India enable organisations to choose: from three different groups (i.e. design phase, construction phase, or business outcomes), and at three different levels (i.e. project/organisation level, benchmarking club level, or industry level). Originality/value There is no known overarching Construction Clients’ Charter at present. Some project KPI sets are available elsewhere. However, those developed in India, while focusing on project performance, also connect to organisational performance and business outcomes. Furthermore, KPIs are provided to separately probe client, consultant and contractor performance. Significantly, the charter and KPIs are outcomes from an industry-led self-improvement initiative launched with building construction clients at the forefront, rather than a top-down imposition from government. Furthermore, while prioritising client aspirations, they also address common supply chain and end-user concerns, which may also be interpreted as a longer-term win-win-win client’s aspiration.

Risk Allocation in Concession Agreements for PPP Road Projects in India

Public–private partnership (PPP) concessions for transportation infrastructure, especially road projects, have a high degree of risk exposure and complex nature of risk profile. This chapter studies the evolution of contractual allocation of critical risks for PPP road projects, in different generations of concession agreements (CA), for national and state highways in India. The scope of the study is limited to PPP projects in Indian national highways (NHs), expressways and state highways with toll-based concessions. Through literature review and subsequent questionnaire survey, land acquisition, revenue, permit/approval, cost overrun and political risks were identified as the most critical risks in Indian PPP road projects. The CAs for Ahmedabad–Mehsana Toll Road, Jaipur–Kishangarh Toll Road, Krishnagiri–Thopurghat Toll Road and the Planning Commission Model Concession Agreement (MCA) for PPP in NHs were reviewed to study the contractual clauses addressing different risks and the contractual risk share was rated in a seven-point bipolar scale, developed for this purpose, through discussions with the members of a focus group.