1. Infrastructure Development Corporation Limited Risk Mitigation through Project Development Focus on Safer Airplanes in addition to better Parachutes Pradeep Singh President & CEO ILFS Infrastructure Development Corporation March 15, 2005

2. Infrastructure Development Corporation Limited The Project Development Goals for Infrastructure Projects To achieve true “Partnership” in Risk Management in Public-Private Partnerships –Optimal Information Generation to minimize Risks –Balanced Risk Allocation among various State and Private Stakeholders –Appropriate Management of Allocated Risks through Policy, Legislative and Regulatory Structures

3. Infrastructure Development Corporation Limited The Project Development Challenge Political and Bureaucratic understanding and buy-in for the need for Project Development effort Risk Capital to undertake extensive studies, structuring and documentation Technical Capacity to undertake Project Development Policy & Decision making apparatus within governments The patience of an elephant and the staying capacity of a bull

4. Infrastructure Development Corporation Limited Cost & Price Certainty Regulation Governance Project Development

5. Infrastructure Development Corporation Limited State Government of Andhra Pradesh, ADB - PSD dept., IL&FS Partnership in India Develop bankable projects for competitive bidding to Private Sector Parties (PSP’s) Balanced Risk Structure Environmentally and Socially Sound Projects Robust Contractual Arrangements Competitive Pricing and Safeguarding of Public Interest Objectives Undertake Project Development for Infrastructure Projects for Public Private Partnerships Goal

6. Infrastructure Development Corporation Limited Proposed Sectors Urban Infrastructure Industrial Parks and Area Development Projects State Roads and Bridges, Ports, Airports, etc. Energy and Environment e-Governance and ITES Health and Education Capacity Building and Training Any other sector mutually decided

7. Infrastructure Development Corporation Limited Proposed Structure A Steering Committee –Chaired by Chief Secretary to Government 5 Department heads of the Government 3 Members from IL&FS and 2 members from ADB An MoA between the Govt. and ADB outlining –Project development framework –Inter-se Roles

8. Infrastructure Development Corporation Limited Proposed Process Government proposes Projects to the Steering Committee with preliminary project details ADB, ILFS together establish Project Development framework, budget and milestones (Initial Screening Report) IL&FS leads the Project Development work along with Technical Consultants Steering Committee provides Periodic reviews & guidance

9. Infrastructure Development Corporation Limited Proposed Financing Arrangement  ADB Role goes beyond TA Assistance  ADB and ILFS to bear the Project Development Risk  Project Development expenses to be capitalized and recovered from the Projects along with a Success Fee  Government to reimburse ADB if it decides to drop a Project mid-way

10. Infrastructure Development Corporation Limited Role of State Government State Government to mandate ADB/ILFS to develop each Project Coordinate with various government departments and allied agencies to facilitate –project clearances –project agreements –fiscal concessions, if required Contribute in-house technical and other manpower Review the Projects through Steering Committee Undertake Policy, Legislative reform as necessary

11. Infrastructure Development Corporation Limited Role of IL&FS Assist State Government in project identification Prepare Initial Screening Report Undertake detailed Project Development to create pipeline of bankable infrastructure projects Procure & manage external technical consultants as necessary Design & Implement procurement process including bid evaluation, negotiation and selection of private sector partner Assist in Policy Formulation & Capacity building

12. Infrastructure Development Corporation Limited Role of ADB Provide value addition in project development process - its halo effect Advise on best practices for project development and procurement Contribute financial resources for Project Development Assist in Capacity Building of Government Departments Commit financial resources for Project Implementation, as appropriate

13. Infrastructure Development Corporation Limited THANK YOU