Pre-Bid cum Investors Conference

Transcription

1 DEVELOPMENT OF RESIDENTIAL & COMMERCIAL PROJECTS IN PATNA ON PPP BASIS Pre-Bid cum Investors Conference 12 th August 2013 Changing Urban Landscape of Bihar

2 Agenda Background Project key features and provisions of Bid Documents I) Residential- cum-commercial development Project at Project #1: Residential at Sector-5, Bahadurpur, Patna along with Commercial at DS Sector, Kankarbagh, Patna II) Commercial Development Projects at Project #2: L-Sector Kankarbagh, Patna Project #3: Hanuman Nagar, Patna Q&A 1

3 Agenda Background Project key features and provisions of Bid Documents I) Residential- cum-commercial development Project at Project #1: Residential at Sector-5, Bahadurpur, Patna along with Commercial at DS Sector, Kankarbagh, Patna II) Commercial Development Projects at Project #2: L-Sector Kankarbagh, Patna Project #3: Hanuman Nagar, Patna Q&A 2

4 Background Bihar State Housing Board a State level nodal agency to provide housing for all. Operates under Urban Development & Housing Department (UD&HD), GoB BSHB envisions to develop 1,00,000 housing units across Bihar in next 5 years Public Private Partnership (PPP) is the preferred mode Pilot Projects already approved by State Cabinet Bids invited for 3 projects Transaction Advisors: Deloitte Touche Tohmatsu India Pvt. Ltd. in association with Kapoor & Associates and ASA Law Architect Consultants (for Bundled Project): Black Inc, Ahmedabad 3

5 Background Pilot Projects under consideration Proposed Sites for Development # Project Type Site Location Site Area Type Proposed Development 1 Bundled Project: Residential cum Commercial Projects Sector 5, Bahadurpur (Opp. TV Tower) DS Sector, Kankarbagh (3 Sites) acres 4.20 acres Greenfield Greenfield 1,596 Flats Commercial Complex (Mall, Office, Shopping Complex etc.) RfP Issued 2 Lohianagar (Kankarbagh) Sector-S, T, U Rental ~ acres Brownfield ~2,488 Flats + Commercial 3 Bahadurpur Sector-3,6 ~ acres Brownfield ~8,454 Flats + Commercial Upcoming 4 Katari, Mustafabad, Gaya ~ 125 acres Greenfield ~12,696 Flats + Commercial Projects 5 Damodarpur, Muzaffarpur ~21.75 acres Brownfield ~1,496 Flats + Commercial 6 a 6 b 4 Commercial Projects L-Sector, Lohianagar, Kankarbagh Hanuman Nagar, Kankarbagh 1.70 acres 0.55 acres Greenfield Greenfield Commercial Complex (Mall, Office, Shopping Complex etc.) Commercial Complex (Mall, Shopping Complex etc.) RfP Issued

6 Agenda Background Project key features and provisions of Bid Documents I) Residential- cum-commercial development Project at Project #1: Residential at Sector-5, Bahadurpur, Patna along with Commercial at DS Sector, Kankarbagh, Patna II) Commercial Development Projects at Project #2: L-Sector Kankarbagh, Patna Project #3: Hanuman Nagar, Patna Q&A 5

7 About the Project Bundled Project # Factor Description 1 Name of the Development of: Project Residential Property at Sector-5 Bahadurpur, Patna 2 No. of Development Sites 3 Proposed Development 6 bundled with Commercial Property at DS Sector, Lohianagar, Patna A. Four (4) sites: Residential Site ~ Acres at Sector-5 Bahadurpur (Patna) 3 Commercial Sites total ~ 4.20 Acres at DS Sector, Lohianagar (Patna): o o Site A ~2.38 acres Site B ~1.13 acres o Site C ~0.69 acres Residential: As per BSHB Architectural design, drawings & Specifications Commercial : As per applicable developmental norms 4 Estimated Project Cost Rs.561 Cr 5 Lease Period 30 (Thirty) Years 6 Lease Renewable with each term of 30 (Thirty) years Renewals No limit on number of Renewals

8 Bundled Project Residential Site Rajendra Nagar Railway Station Subject Site N 7

9 Bundled Project Residential Site Land Area: ~10.17 acres View of Bahadurpur, TV Tower site and Adjoining TV Tower 8

10 Bundled Project Commercial Sites 9

11 Bundled Project Commercial Sites DS Sector Site A Land area DS Sector Site A Access Road Site A approx acres DS Sector Site B DS Sector Site C 3 sites with total land approx acres situated at DS Sector, Lohianagar (Patna) Site B approx acres Site C approx acres 10

12 Site Plan of DS Sector 11

13 PPP Development Model Bihar State Housing Board 1 Land for Commercial Development 1 Players participate in Bidding Process for Residential cum Commercial Projects (based on technical and financial qualifications) PPP 2 Private Developer (get selected) Receives leasing rights for 30 years (comm., grant flats), Renewable for 30 yrs. each time 3 4 Land for Residential Development 2 2BHK Flats Flow of PPP related activities undertaken by both parties Development of Residential Flats 7 Undertakes development of commercial components such as retail, office development 5 Earns revenues from commercial spaces & flats under grant 3 Allotment of Housing Units (excl. flats under grant) by BSHB O&M for 2 Years and handover to RWA Part Revenues to fund cost of development of residential flats for BSHB 6 12

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15 Proposed PPP Development Roles Role of Bihar State Housing Board Provides developer with commercial land parcel on 30 years lease; Renew Lease All development, earnings, expenditure related rights and obligations to be transferred to private player; In lieu of commercial land, developer mandated to develop residential housing for BSHB as per specifications laid down by the Board; Net future earnings from the commercial land to form the source of construction cost required for the residential units; Allotment rights and obligations w.r.t. residential development (excl. grant flats) to remain with BSHB Role of Private Sector Developer Receives commercial land parcel for 30 years on lease; Lease Renewable for 30 years each time on payment of Lease Renewal charges No restriction on number of Renewals Develop commercial land; Retain and manage commercial parcel earnings, expenditure; Undertake development of residential housing in line with specifications provided by BSHB; Transfer residential property (excl. grant flats) on completion of construction to BSHB; Remain responsible for O&M for 2 years and any defects, during the defect liability period (3 years) in case of residential property Joint Development of Residential Flats by Private Developer as per specification laid down by BSHB 14

16 Selection of Private Player for Bundled Project Selection Criteria Selection through International Open Competitive Bidding Process Technical Eligibility Criteria: I) Minimum Qualification: Residential Construction/ Development Experience* >= 3.05 Acres in last 5 years; Commercial Construction/ Development Experience* >= 1.26 Acres in last 5 years; II) Technical Capacity: Project Experience of > Rs Cr in last 5 years At least 1/4 th from Eligible Projects (> Rs Cr.) in Category 1 and/ or Category 3 III) Financial Capacity: Minimum Net Worth of Rs Cr Category 1 and 3 would be deemed to include housing, residential townships and mass housing. Category 2 and 4 (core Sector) would be deemed to include real estate, factory buildings, industrial buildings, industrial parks, port terminal, airport terminal, railway stations, commercial complexes and office complexes. IV) Financial Bidding Criteria: Highest Premium offered or Lowest Grant quoted in terms of Number of Flats 15 * Proof = clients work orders and completion certificates from Client/Engineer/app. Government Instrumentality

17 TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT Ref. Key Provision Recital Single Stage Bidding Process. Special Purpose Vehicle (SPV) to be incorporated 2 Scope The Scope of Project includes: (a)construction of Project (b)sub-leasing/renting/transferring etc. of Assets on Commercial Property {and Flats under Grant} after COD; (c)o&m of Commercial Property during entire period (d)o&m of Residential Property for 2 years and handing over to RWA (e)handing over Residential Property {except Flats Under Grant} to BSHB for allotment; and (f) Any other obligations as per agreement 3 Licence and Lease; Sub-Lease (c) (a) license right to develop, operate and maintain Project (b) upon COD, lease-hold rights of Commercial Property {and Flats Under Grant} for 30 years including right to further sub-lease, transfer, grant licence, tenancy rights, similar relationship 16

18 TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT Ref. Key Provision 3 3 Renewal Upon expiry of 30 Years, Authority shall renew Lease Rights Renewal for 30 years upon payment of Renewal Premium No limit on number of Renewals Transferability In case of Commercial Property: Lease Rights are also transferable after COD Transfer subject to payment of Transfer Dividend Sub-Lease, tenancy, grant licence, similar arrangement allowed under intimation to the Authority No Transfer Dividend payable in case of Sub-leases/ creating tenancy/ granting licence rights etc. 7 Representati on and warranties For the Developer: Selected bidder/ Consortium & Associates, to hold mini. 51% Equity; each member to hold (i) 26% Equity and (ii) 5% TPC during Construction Period & 3 years thereafter 9 Performance Security Rs Cr To remain in force till 3 months after Defect Liability Period (DLP) 17

19 TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT Ref. Key Provision 12 Construction Architectural design and drawing for Residential Property made available by the Authority at the time of bidding to be followed. Structural design and drawing for Residential Property made available by the Authority at the time of bidding to be taken as reference only. Developer to get Structural design & drawing proof checked by NIT or IIT Bonus for early completion of Construction 17 O&M Developer solely responsible for O&M of Commercial Property O&M of Residential Property for 2 years from COD Authority to ensure incorporation of RWA/ society/ association etc. Developer to hand over the O&M work to RWA 18 Safety Requirement Developer to comply with the Safety Requirement, rules, directions and guidelines IE to perform Safety Audit 20 Independent Engineer Authority to appoint the I.E., before Commencement of Works Cost of I.E. to be borne equally between the Authority and Developer Financial Close Developer to achieve Financial Close within 180 days from Signing of Agreement in the event of delay, entitled for further upto 60 (sixty) days, as per DLA

20 TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT Ref. Key Provision 22 Marketing/ Allotment/ Booking Advance Booking: Entitled to commence booking on Commercial Property after Appointed Date Also entitled to commence booking of Flats under Grant upon 65% construction completion Sub-lease/ transfer etc.: Only after COD, may execute Sub-Lease Deed, Licence agreement, tenancy agreement Flats Under Grant: A tri-partite agreement shall be executed amongst Authority, Developer and transferee in case of Flats Under Grant No Transfer Dividend for first transfer Payable for subsequent transfers Commercial Property: lease rights transferable with prior permission and upon payment of Transfer Dividend after COD 24 {Premium} / {Grant} Developer may offer Upfront Premium in the form of Cash OR Seek Grant in the form of number(s) of residential flats ( Flats under Grant ) out of the Residential Property plus nominal Cash Support in the range of Re. 0 and Re. 5,00,000/-* *Nominal cash support to avoid tie-bidding No roof-top rights, No change in Architecture and Civil structures of Flats under Grant, Interiors incl. internal finishes, fittings can be modified in case of Flats Under Grant; 19

21 TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT Ref. Key Provision Termination In the Event of Developer Default 32 During Construction - NIL During Operations - 65% of Fair Value of Assets* *Net of insurance cover& Grant Recovery In the Event of Authority Default During Construction - 100% of Fair Value of Assets* During Operations - 100% of Fair Value of Assets* *Net of insurance cover 34 Defect Liability Residential Property = 3 years from COD 20

22 Agenda Background Project key features and provisions of Bid Documents I) Residential- cum-commercial development Project at Project #1: Residential at Sector-5, Bahadurpur, Patna along with Commercial at DS Sector, Kankarbagh, Patna II) Commercial Development Projects at Project #2: L-Sector Kankarbagh, Patna Project #3: Hanuman Nagar, Patna Q&A 21

23 About The Project Lease for Commercial Development of : approx acres of Land at L- Sector in Kankarbagh, Patna & approx acres of Land at Hanuman Nagar in Kankarbagh, Patna # Factor Description 1 Name of the Commercial Development at L- Sector in Kankarbagh, Patna Project Commercial Development at Hanuman Nagar in Kankarbagh, Patna 2 No. of Development Sites L Sector Project : One site ~ 1.70 Acres of land Hanuman Nagar Project: One site ~ 0.55 acres 3 Total Built up Area L Sector Project : Approx. 17,200 Square Meters, FAR = 2.5 Hanuman Nagar Project: Approx. 5,527 Square Meters, FAR = Estimated Project Cost (in INR crore) L Sector Project : Approx. INR Cr Hanuman Nagar Project: Approx. INR Cr 5 Lease Period 30 Years 6 Lease Renewals Renewable with each term of 30 (Thirty) years No limit on number of Renewals 22

24 About The Project L Sector Project 23

25 About The Project L Sector Project L Sector site area 1.70 acres L Sector site Frontage 24

26 About The Project Hanuman Nagar Project 25

27 About The Project Hanuman Nagar Project 26

28 About The Project Hanuman Nagar Project Hanuman Nagar site area acres Hanuman Nagar site frontage Hanuman Nagar site access 27

29 PPP Development Model Bihar State Housing Board **Earns** Lease Premium (one time) + Fixed Annual Lease Rent (Notional amount) 1 Land for Commercial Development 2 1 Players participate in 2 Bidding Process for specific project(s) (based on technical and financial qualifications) PPP Flow of PPP related activities undertaken by both parties 6 Private Developer (get selected) Leasing rights for 30 years Renewable - 30 yrs. each time Undertakes development of Commercial Components Earns revenues from sub leasing of commercial spaces 28

30 Selection of Private Player for Bundled Project Selection Criteria Selection through International Open Competitive Bidding Process Technical Eligibility Criteria: I) Technical Qualification: (In last Five Years) L-Sector Project: Commercial Construction/ Development Experience >= 34,440 Sq Mt; Hanuman Nagar Project: Commercial Construction/ Development Experience >= 11,054 Sq Mt; II) Financial Capacity: L-Sector Project: Minimum Net Worth of Rs Cr Hanuman Nagar Project: Minimum Net Worth of Rs.3.93 Cr III) Financial Bidding Criteria: Highest Lease Premium. Highest Bidder shall mean the Bidder who is offering the highest Lease Premium. 29

31 TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT Ref. Key Provision Recital Single Stage Bidding Process. Special Purpose Vehicle (SPV) to be incorporated 2 Scope The Scope of Project includes: (a)construction of Project (b)sub-leasing/renting/transferring etc. of Assets on Commercial Property after COD; (c)o&m of Commercial Property during entire period (d)any other obligations as per agreement 3 Grant of (a) Lease right to develop, operate and maintain Project Development (b) Lease Period of 30 years from Appointed Date Rights (c) including right to further sub-lease, transfer, grant licence, tenancy rights, similar relationship 3 Renewal Upon expiry of 30 Years, Authority shall renew Lease Rights Renewal for 30 years upon payment of Renewal Premium No limit on number of Renewals 30

32 TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT Ref. Key Provision 4 Change in Ownership For the Developer: Selected bidder/ Consortium & Associates, to hold mini. 51% Equity; each member to hold 26% Equity till 3 years (three years) from achievement of Commercial Operation of the Project 6 Consideration Nominal Annual Lease Rent Rs.1,50,000/- for L Sector Rs.50,000/- for Hanuman Nagar Site Upon Renewal after 30 Years, Annual Lease Rent at increased rate 13 Performance Security Rs Cr for L Sector Project Rs Cr for Hanuman Nagar project To remain in force until 6 months after issuance of Completion Certificate 14 Construction O&M Developer to obtain and maintain all Applicable Permits Developer solely responsible for O&M Developer to prepare, maintain & update an Asset and Project Utility register 15 Drawings Structural design & drawings of Assets and/or Project Facilities to be proofchecked from IIT or NIT, prior to construction 31

33 TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT Ref. Key Provision 17 Completion of the Project Project Completion : on or before the expiry of 24 months from Appointed Date Completion Certificate to be issued only after utilization of mini. 75% FAR 19 Marketing/ Allotment/ Booking of the Assets Entitled to commence booking after executing Lease Deed Lease rights transferable with prior permission and upon payment of Transfer Dividend after COD Sub-Lease of Assets on the Commercial Property to comply with the following: All amount from the Sub-Lease to be deposited in the Project Account Developer solely responsible for the timely implementation of the Project 20 Grant of Sub- Lease Rights The Developer shall grant sub-lease, licence, tenancy or similar rights/ arrangements of spaces by way of execution of a Sub-Lease Deed to be entered into between the Developer and the Sub-Lessee/ transferee Term of such Sub-Lease Deed or sub-license Deed shall be co-terminus Developer to maintain a Sub-Lease Register 32

34 TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT Ref. Key Provision 23 Lease Period, Renewal, and Transferability Commercial Property L Sector and Hanuman Nagar : Lease Rights transferable after COD Transfer subject to payment of Transfer Dividend Sub-Lease, tenancy, grant licence, similar arrangement allowed under intimation to the Authority No Transfer Dividend payable in case of Sub-leases/ creating tenancy/ granting licence rights etc. 24 Default, substitution and Termination In the Event of Developer Default During Construction - NIL During Operations - 65% of Fair Value of Assets* *Net of insurance cover In the Event of Authority Default During Construction - 100% of Fair Value of Assets* During Operations - 100% of Fair Value of Assets* *Net of insurance cover 33

35 Agenda Background Project key features and provisions of Bid Documents I) Residential- cum-commercial development Project at Project #1: Residential at Sector-5, Bahadurpur, Patna along with Commercial at DS Sector, Kankarbagh, Patna II) Commercial Development Projects at Project #2: L-Sector Kankarbagh, Patna Project #3: Hanuman Nagar, Patna Q&A 34

36 Open house for clarifications/ suggestions 35

37 Selection of Private Player for Bundled Project Qualification Criteria Project to qualify as Eligible Project: For a project to qualify as an Eligible Project under Categories 1 and 2: It should have been undertaken as a PPP project on BOT, BOLT, BOO,BOOT or other similar basis for providing its output or services to a public sector entity or for providing non-discriminatory access to users in pursuance of its charter, Lease Rights or Concession or contract, as the case may be; the entity claiming experience should have held, in the company owing the Eligible Project, a minimum of 26% (twenty six per cent) equity during the entire year for which Eligible Experience is being claimed; the capital cost of the project should be more than Rs Crores (Rs. One Hundred Twelve Crores and Twenty Lakhs only); and Payments/receipts of less than Rs Crores (Rs. One Hundred Twelve Crores and Twenty Lakhs only) shall not be reckoned as payments/receipts for Eligible Projects Factors for Experience across categories Categories Factor Category 1: 1.25 Category 2: 1.00 Category 3: 0.75 Category 4: 0.60 *real estate would include dwelling units as part of industrial estates & other industrial infrastructure such as SEZs/Industrial Parks, institutional infrastructure development such as schools, colleges, universities, IT-ITeS Campuses/ Hostel buildings etc.; Social/ Rehabilitation projects such as night shelter buildings, bus shelters, community centers, etc.; hotels, resorts, and serviced apartments, development of amusement parks, recreational facilities such as planetarium oceanariums, museums, auditoriums, stadiums, etc.; city side development in Airports, i.e. retail and recreational construction experience in Airports; development of way side amenities forming part of highway projects 36

38 TRANSACTION FRAMEWORK- KEY PROVISIONS OF RFP DOCUMENT Ref. Key Provision Definition Some important definition includes: 43 Fair Value means the updated estimated cost of construction of similar assets of equal size and specifications, calculated in accordance with the schedule of rates applicable to the works assigned by the Authority to its contractors, less depreciation calculated by what is known as the Age/ Life method as applicable at the time of Termination, as arrived at by the independent valuer mutually appointed by the Parties for the purpose. For this purpose, developer shall submit the design life of the proposed development at the start of Construction Period, as certified by IIT/ NIIT, and this shall further be acknowledged and approved by BSHB. This approved design life shall be the basis of calculating depreciation while determining the Fair Value of assets Renewal Premium shall mean the premium payable on renewal of Lease or Sub-Lease by the Lessee or Sub-Lessee or right claiming thereunder to the Authority or BSHB which shall be equivalent to 10% (5% in case of Flats Under Grant) of the prevalent market value of the proportionate share in land involved in the renewal as Premium and also the enhanced Lease Rent on the proportionate share of Land for which renewal is sought for. Transfer Dividend shall mean the amount payable by the Lessee (except for granting sublease, licence) seeking transfer of his right at any time during the currency of the Lease which shall be equivalent to 50% *[(higher of prevalent circle rate and the price consideration for transfer) (allotment premium)]. 37