Secured Lending to PPP Projects

A recent RBI guideline has paved the way for securing lending to the PPP projects in the infrastructure space and especially the roads/ highways/ power sector which have a standarised policy towards charging tariffs/ toll rates over the entire period of Concession.

Concession in the PPP parlance typically means the period of authorisation as per the Agreement entered into between the Private Investor (Selected Bidder at the end of Bidding Process) and the Authority.

Concession Period is the time period in number of years for which the Concession Agreement terms and conditions are binding upon the either parties.

PPP projects were till  recently not considered as a secured mode of lending by Banks  especially due to the various regulatory/ accessibility issues involved with such arrangements that were also guided by this notification from the RBI circular issues in the year 2009-10 which goes as follows ” (a) For determining the amount of unsecured advances for reflecting in schedule 9 of the published balance sheet, the rights, licenses, authorisations, etc. charged to the banks as collateral in respect of projects (including infrastructure projects) financed by them, should not be reckoned as tangible security. Hence such advances shall be reckoned as unsecured. and (b) Banks should also disclose the total amount of advances for which intangible securities such as charge over the rights, licenses, authority, etc. has been taken as also the estimated value of such intangible collateral. The disclosure may be made under a separate head in “Notes to Accounts”. This would differentiate such loans from other entirely unsecured loans“.

This circular has invariably been replaced by a new Circular issued on 18^th March 2013 in which RBI has recognized such infrastructure projects having tolling rights/ tarrifs rights as of special in nature and hence require special consideration and it quotes “In terms of our circular DBOD.No.BP.BC.125/21.04.048/2008-09 dated April 17, 2009 on ‘Prudential Norms on Unsecured Advances’ rights, licenses, authorization, etc., charged to the banks as collateral in respect of projects (including infrastructure projects) should not be reckoned as tangible security. However, it was observed that infrastructure projects, especially road/highway projects, are special in nature where asset created by bank finance cannot be pledged/mortgaged to the bank but certain rights to receive annuities / toll collection from the assets can be hypothecated to the lenders”.

To make the lending to tolling projects a more tangible, RBI has advised as follows “In view of the above, banks have been allowed, vide our circular DBOD.No.BP.BC.96/08.12.014/2009-10 dated April 23, 2010 on ‘Prudential Norms on Advances to Infrastructure Sector’ to treat annuities under Build-Operate-Transfer (BOT) model in respect of road/highway projects and toll collection rights, where there are provisions to compensate the project sponsor if a certain level of traffic is not achieved, as tangible securities. This is subject to the condition that banks’ right to receive annuities and toll collection rights is legally enforceable and irrevocable.”

 

The Planning Commission of India has issued Model Concession Agreements for sectors like Power, Ports & Highways which are the prevalent high capital intensive projects in the infrastructure sector which has the necessary provisions that secure the rights of the lenders and have been recognized as Secured mode of Lending for PPP projects wherein the loan/ debts can be considered as Secured to the extent assured by the Project Authority in terms of the Concession Agreement subject to the following conditions:

a.      User charges/toll/tariff payments are kept in an escrow account where senior lenders have priority over withdrawals by the concessionaire; which is included in the Chapter Escrow Arrangements of the MCA

b.      There is sufficient risk mitigation, such as pre-determined increase in user charges or increase in concession period, in case project revenues are lower than anticipated;  – this is typically a part of the Schedules to the Concession Agreement or depending upon inclusion of an article related to Revenue Shortfall Loan

c.       The lenders have a right of substitution in case of concessionaire default; – Substitution Arrangements Section of MCA

d.      The lenders have a right to trigger termination in case of default in debt service; and – Termination in Case of Concessionaire Event of Default/ Force Majeure Event of Default etc

e.       Upon termination, the Project Authority has an obligation of (i) compulsory buy-out and (ii) repayment of debt due in a pre-determined manner. – Debt Due

Important Links:

Click to access MTA_RoadProj_IDFs.pdf

http://rbi.org.in/scripts/NotificationUser.aspx?Id=7896&Mode=0

Hallelujah!! Singh is King

The Big Parliamentarian elections are just round the corner, and none of our dear beloved politicians are leaving any page unturned to grab public attention and portarying their image to garner more votes.

The latest to join the bandwagon is the erstwhile cricketer, a chirpier commentator well known for his online retrorics and funny oneliners that have had even the fellow partenrs in crime dumbfounded, trying to hide their faces to be ignorant to the stupidity but all the while enjoying, relishing the comments like a sweet cucumber absorbing all the masala and creating a sweet and salty experience nonetheless.
The sitting BJP MP has never been the one who would disappoint on one of his many public appearances, and when it has to be in his own constitutency of Amritsar, one can even expect the unexpected from the man.
So the speech started with the parliamentarian shouting out Hallelujah!! this was not a simple english hello to the vast audience, but a desi, punjabi version something like Haaaallelujah!! which on some other day would have sounded like a “jo bole so nihal…” slogan to what was lesser knowledgable and totally ignorant audience, and when he encouraged them to recite the word repeatdely after him, the scene was totally worth witnessin and probably not mentionable in words. U have to experience it to relish it..
The speech continued with the mention of the maintenance and state of roads in Amritsar by his fellow counterparts to if one could have ever imagined, Preity Zinta`s dimples and cheeks!!!
Not restricting himself to all this, he also said that the current government was concentrating their efforts on going green, and if you thought that this one was a straighforward comment, be ready to be surprised, because what he meant was that government is more into corruption and earning the green buck!!
can you simply beat that…

So as on expected lines, the audience was treated to what was probaly one of their funniest, whackiest and a totally out of context poll experience!!
Let the games bgin…

Varunoday

The pre poll campaining has reached frenzied heights, with leaders(if they could actually qualify to be called so), coming up with newer, bolder and innovative packaging solutions to hide thrir blemishes and replace them effectively with their lesser known and once in blue moon good deeds, done for the people of their constituencies.
and the latest to qualify is a 29 yr old (if one could believe it), a legacy holder of a different kind, being supported by a party which has been doing continuous flip flops of either being a secular or a religionists party.
Varun Gandhi has finally arrived on the big stage of national politics. He has traced out a new path for himself in this nation of crazy dynasty ideology.
The last general elections, he was denied a ticket for not fitting the age criteria. He has achieved a turnover now. Not only has he qualified to be a sitting MP, literally, but also achieved the most deemed necessary qualification of having visited the jail, once atleast to make himself eligible for representing the emotionally bonded and so called ideological bound people of the nation.
But probably he is not a hypocrite..
he has spoken what others might not have dared to say in the public domain.
And the mastermind of his party needs to be accoladed for definetely for the timing and the reactiveness with thwich the situation has been turnaround in their favour…
welcome to the age of new age politics and general elections – 2009.

Sir Alex`s cooking lessons to Jose`

Lots of twists, turns, tricks and versatility was at display when the two defending champions, the Powerhouses of the respective leagues were at tenterhooks at the last 16 stage of the EURO championships. But alas only one was a survivor to the next round.
It was a pity that two such huge clubs were battling it out at such an early stage of the championship, and with the first leg at Sansiro being a goalless draw, both the teams were desperate to draw first blood against each other.
No doubt then the match saw relentless pressure, emotions, and errors from both side and in the end resulting in the defending champions of Europe (Manchester United) going through to the quarterfinal of this year’s championship.
The match was special in more ways than one. This one saw the return of Jose Mourinho, who is one of the few managers to have a better record against Sir Alex Fergusson`s side on a head to head basis, to the England soil after nearly two years. It was being matched with a Manchester United team that has earned the reputation of being a miser this season, breaking the records for number of clean sheets and not losing at Old Trafford for more than a year now.
But alas history couldn’t repeat itself yet again for the Inter Milan Manager , and the records were set straight once again with Manchester United winning this one with a 2 – 0 margin, which has happened for the first time in the previous 14 meetings of the two managers.
United were without the highly motivating Gary Neville, Wes Brown, and Anderson (who came in as a susbstitute) combination and the United did look a bit vulnerable at first as far as the defense was concerned.

Nemanjic Vidic, the center Fullback for Manchester United was on target in as early as the 4th minute of the match and Manchester United was leading at 1 – 0 through a meticulous header placed at the back of the net by the tall defender, of a set pieces move so well perfected by the team.
The action packed first half thereafter saw Inter Milan putting more and more pressure on the Manchester defense through systematic, planned and typical Catalan type attacks. Ibrahimovic, the tall, lanky, forward from Sweden, took advantage of a lackluster performance from the last four of Manchester team and hit the inner post in the 24th minute, only the shot to be deflected away from the goal by Van de Saar.
Another 38th minute long distance strike by Stankovic was just about handled by Van der saar and deflected away from the goal once again. The resulting counter attack saw John O` Shea missing a golden opportunity on a one on one confrontation with Julius Ceaser, the Inter goalie and United had missed out on a golden opportunity of doubling the lead in the first half itself.
Then a 41st minute strike by Ibrahimovic was taken well by Van der Saar and another chance had gone begging. All the while Jose, standing by the sidelines, a bewildered, impatient look on his face must have been wondering what else could be done to break the United defense and earn the desperately needed away goal.
And that is how it stayed at the end of the first half.
The beginning of the second half was somewhat similar as it had shaped for United at the start of the match and the dreaded 3Rs (Ryan, Rooney, Ronaldo) of United came together in the 49th minute to put them further ahead on the score sheet.

It was 2 – 0 United, thanks to a superb move by Ryan Giggs, well complemented by Rooney and superbly executed (headed) by Ronaldo, his first goal of the European Championship for 2009. And Inter Milan believed that they were up against an extremely uphill task of pulling it back now and with time running out for the four time Italian Champions, Jose started looking for better options to put it against the United defense.
In came Adraino, who immediately complemented the Cambiasso direct shot in the 60th minute which was just off the target, with a well timed move against Van der Saar through a Set Piece only to be thwarted by the inner post once again.
And probably that was the only point differentiating the two teams, resulting in the Italian champions being thrown out of the championship. An inch here or there for Inter and things could have been different, but as the case has been so often in these championships, these one or two inches more often than not result in one team going through and the other lying there in despair.
The last quarter of the match again saw Inter Milan giving it everything they had, in terms of replacements, counter attacks and subtle moves. Even the erstwhile Luis Figo, Adriano, Zaneti and Patrick Viera were to be undone with what lay ahead and Inter Milan had descended to the fact of a loss and the ouster from the Championships.
And so it stayed at the end of the 2 minute injury time over the regulation time with United comfortably, it should be said at the end of it, going through to the last 8 of the championships.
The final moments after the match saw the two managers in a hug, complementing each other’s game with Jose realizing that it does take a lot to overpower an extremely talented and a hungrier for more – Sir Alex team.
Interestingly, the Manchester United Manager was seen on MANU TV a few days back giving cooking lessons to all the fans, with some lovely and tasty local preparations. Probably, one of his ways of relaxing before such a huge game.
So, a vulnerable and completely off colour Manchester United team, as per the new high standards set by them, are still on track to what could be a quadruple of trophies in a single season. And with the FA Cup Semifinals being lined up and a comfortable 8 points lead in the Barclays Premiere League, it does seem a lot more realistic then it did at the start of the season.
The day also saw all the four English teams going through to the last 8, although surprisingly all the four Italian teams have been knocked out. So all eyes would now once again be set out on the new schedules and fixtures of the remaining three round s of the championship, and by the look of it, seems to be an extremely steamy affair.

Cheers!!

simpLIFEy It!

It all began with a usual jaykar “Ganpati Bappa Morya” and then a new journey had begun. But in this context the mood lifting, soul soothing, vighnahartha was nowhere to be seen. Neither was the slogan an indication of the happier times that usually lay ahead of its arrival.
It was instead, a hoonkar to brace oneself for the situation, to prepare for the grind that lay ahead.
As soon as it got over, at the very next glance you could find yourself surrounded by this team of cruel barbarians ( like the ones seen in gladiator), who with the demands of the situation can turn brutal, ready to inflict pain upon others.

These fighters are surrounded with a completely diverse set of people accompanying them.

Some are the ones who do not get intimated by the fierce look that is being showered by these people and try to match them strength to strength, by taking matters in their own hands. Thus within no time a bloody battle is raged between these set of people, by the look of it and if let off by the hook of decency that holds them and little bit of humanity remaining within them, they just decide to let it be… but alas only for a little while….
In the meanwhile somewhere lost amongst these people is a set of carefree, soul searching, happy go lucky people, completely oblivious to the situation and happy as a little child for the sun having set out from the east once more… But in a frenzy of all those people and the overall situation that builds up, they can’t just remain aloof after all, for a simple reason that their daily bread and butter is totally dependent upon the journey that lies ahead…
Included in this ignorant group are few people who represent the generation that has started believing in giving back to the opposition over and above that they have received.

So they decide to involve themselves in the battle and challenge the adversary head on. The first few bold steps taken by these individuals are matched with frenzied warnings from the aggressive matadors “aye to aagey mat aana samjha na. hum yahaan ke regular hain” followed by stark words of praise***.

But the youth has decided it got to be now or never… The comfort that lay ahead, the unnerving, pleasant drive, sitting by the window side, enjoying the morning breeze is something that’s worth fighting for and that is what he plans to achieve.
He realizes the importance of an inch in these circumstances, an inch on either side could actually have a catastrophic effect in terms of him standing in one third the space, balancing his whole body on one of the toes or managing a respectable finish, doesn’t matter even if it is the coveted FOURTH place( on the seat).

Having decided his course of action, the youth decides to take the plunge and jostling, pulling, jumping, dragging his body and belongings, manages the goal he had set himself for, with a nicely managed jump.

Phew!! Sitting by the window, the morning breeze calming his nerves down, a sense of accomplishment in his and likewise on other fellow beings faces is what he starts relishing now and feels a sense of pride brewing inside him for his achievement!!!
But soon there’s a trickle of blood flowing from one of his limbs, some other who has also managed conquering the barbarians is also whining with pain in his right shoulder, with his belongings having gone haywire….
It is when they see a few sensible people who climb the train with all the time in the world and comfort and ask the barbarians to share the seat with them in an extremely polite manner, to which they respectfully oblige, they start laughing on themselves in the writhing pain….

But then this is life…

The more adventurous u are, the faster u learn…

It teaches you to be resilient but patient at the same time.

To be aggressive but sensible each time

Above all, it tells you life can be ridiculously simple only if u have the conviction to live it that way – simpLIFiEd way!!!
What Better place to experience it, then the mundane PF no: 5, Goregaon Station, 8:50 AM, catching the Goregaon Fast!!!!

Cheers

(Be) Dev D

Tauba Tera Emossonal Attyachar…. There goe Mr Dev D. A realistic, succint, modern day, practical portrayal of the erstwhile Devdas,but truly equally and enterprisingly superbly put forth by the director and his team of cameramen.
This is not a copy neither it can be an inspiration. It should not be called one, although there are striking similarities in the backdrop the script, the characterization of Devdas, paro and Chandra, chunni babu and many others with the original devdases.
It is relaistic in the sense it has quite boldly highlighted the character of Paro in some superb sensethis time. There are particular scenes in the movie where paro might seem a nymphomaniac, desperate beautiful girl not falling short of any instances of trying to satisfy her senses and her pleasrures. But in that case it is atleast not a hypocratic character. Precisely one reason why the movie stands apart.
The transformation of a mysterious, and unclear character of the original devdas to a hardcore egoist, fanciful devdas in the form of the easy going, laid back attitude types by the extremely talented Abhay Deol is another standout point of the movie.
The small confrontations every now and then between Devdas, paro and chanda, the intermittent but regular, indulging and disgusting at times vodka and coke sessions, the slowness of the movie, and the dim backgrounds testes your patience and boredoms at times.

Dream On!!

It was a sad, gloomy day for me, a bad day at work, roaming around hopelessly, listless and oblivious to the celebrations that were going around my classmates(read confirmations) and here i was all alone, looking for ways to make myself happy and realize the more important things in life, to be happy once again, to dream on and to never loose hope in situations, however hopeless it might be… Thats precisley what Slum (Under)dog millionaire does to you…

People have called it Poverty Porn, irrational, deliberate showcase of the plight in this city, point taken..

But it is a fact that this city has to live with every now and then. Slumdog makes u feel, disgusted at times towards the director for showing the true pictures of the society that we live in and for the foreigners gaining sadistic pleasures after watching the lives of people in what is a Third World Coutnry for them.

Some say its just the fact that it has been made by a UK based director, is why it has received such huge accolades. which otherwise is a typical commercial, Bollywood masala movie….

But spare a though for the pinkis, n the jamals and the erstwhile Mr boyle, who has been praised by one n all for his saintly demeanours and handling of delicate issues. Also the fact that he does credit the success of the movie to his predecessors like RGV and AK for giving him a brief idea on how and what needs to be showcased.

The whole idea of liking this beautiful movie is th fact that its based on a simple thought of dreaming big, coz u get whatt u deserve.. Its Written!!

And precisley thats the reason why the movie touches your heart.. a typical masala bollywood movie, carrying a simple but a larger than life funda for life, coupled with an ever consistent RA RA Rahmaan.. a backdrop of a delightful place, the mysterious ways in which the peole live in the city, a Sensible director, and an amzaing pack of young enthusiastic ACTORS…

Truly a champagene moment for the nation …. Jai Ho!!

Nikhil Kshirsagar

Hi, this is Nikhil Kshirsagar.. Welcome to my personal webpage