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Strategic Consulting for Public Private Partnership (PPP) Projects or Project Finance

Apohan Corporate Consultants Pvt. Ltd. > Financial Strategy > Strategic Consulting for Public Private Partnership (PPP) Projects or Project Finance

Public private partnership projects (PPP)


What is a PPP project?

Public private partnership projects are undertaken by the the central government, state Government, urban local body, public sector undertakings (PSUs), pacific authorities created under parliamentary acts (such as NHAI, port authority of India, airport authority of India.), etc for Rapid development of the infrastructure in the country. The eligibility criteria for this project are very strict and hence a small and medium enterprise should join hands with large companies to form a consortium. Projects require around 10 to 30% of margin of the total project cost stop the 70% cost of the project is funded by the banks without any other collateral. The cash flows from the projects themselves serve as the collateral. The contract structure of such projects is very complex. Tendering process is very elaborate. Typical construction period is around 2 to 3 years. Payment is done in a ballooning fashion. There is provision of a substitution agreement and an escrow agreement. Government Grant is available for the projects which cannot sustain on the revenue generated from the customers. The agreement is for a very long period 15 years to 30 years.


Apohan services:
Apohan provides PPP project consulting in the following way:
1. Selection of infrastructure projects
2. Go no go decision
3. Representation in pre bid meetings
4. Preparation of PPP financial model
5. Analysis of the project
6. Formulation of a joint venture to qualify for the tender
7. Assistance in debt syndication
8. Negotiation of the contract with the government
9. Analysis of competition
10. Financial management of a PPP project
11. Assistance in appointment of various agencies such as EPC contractor, PMC/AMC agencies, etc
12. Contract management

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