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Developing a Public Bicycle Sharing Scheme in Mysore on PPP Basis

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Developing a Public Bicycle Sharing Scheme in Mysore on PPP Basis Sector Specific Inventory & Institutional Strengthening for PPP Mainstreaming Directorate of Urban Land Transport Prefeasibility Report for Developing a Public Bicycle Sharing Scheme in Mysore on PPP Basis Submitted By Deloitte Touche Tohmatsu India Private Limited April 2012 ACRONYMS BOOT Build Own Operate Transfer BOT Build Operate Transfer BMR Bangalore Metropolitan Region CTTP Comprehensive Traffic and Transportation Plan DBFOT Design Build Finance Operate and Transfer DULT Directorate of Urban Land Transport FDI Foreign Direct Investment GoI Government of India GoK Government of Karnataka IDD Infrastructure Development Department MIS Management Information System PPP Public Private Partnership UDD Urban Development Department ULB Urban Local Body EOI Expression of Interest RFQ Request for Qualification RFP Request for Proposal Disclaimer This document is strictly private and confidential and has been prepared by Deloitte Touche Tohmatsu India Private Limited (“DTTIPL”) specifically for the Infrastructure Development Department, Government of Karnataka (“IDD”) and Directorate of Urban Land Transport, Government of Karnataka (”DULT”) for the purposes specified herein. The information and observations contained in this document are intended solely for the use and reliance of IDD and DULT, and are not to be used, circulated, quoted or otherwise referred to for any other purpose or relied upon without the express prior written permission of DTTIPL in each instance. Deloitte has not verified independently all of the information contained in this report and the work performed by Deloitte is not in the nature of audit or investigation. This document is limited to the matters expressly set forth herein and no comment is implied or may be inferred beyond matters expressly stated herein. It is hereby clarified that in no event DTTIPL shall be responsible for any unauthorised use of this document, or be liable for any loss or damage, whether direct, indirect, or consequential, that may be suffered or incurred by any party. Table of Contents 1 EXECUTIVE SUMMARY ................................................................................................................. 1 2 INTRODUCTION ........................................................................................................................... 3 2.1 PROJECT IDEA ..................................................................................................................................... 3 2.2 APPROACH & METHODOLOGY .............................................................................................................. 3 2.3 STUDY OF EARLIER REPORTS IN THIS SECTOR IN THE RELEVANT AREA ............................................................. 5 3 SECTOR PROFILE .......................................................................................................................... 6 3.1 SECTOR OVERVIEW.............................................................................................................................. 6 3.2 INDUSTRY OVERVIEW ........................................................................................................................... 7 3.3 REGIONAL PROFILE .............................................................................................................................. 8 3.4 TRAVELLING IN MYSORE ....................................................................................................................... 8 3.5 ISSUES RELEVANT TO THIS STUDY ............................................................................................................ 9 4 PROJECT .................................................................................................................................... 10 4.1 DESCRIPTION OF THE PROJECT ............................................................................................................. 10 4.2 PROJECT COMPONENTS ..................................................................................................................... 10 4.3 LOCATIONS OF DOCKING STATIONS ...................................................................................................... 11 4.4 INTERACTION WITH STAKEHOLDERS ...................................................................................................... 13 4.5 PUBLIC NEEDS & PLANNING CONSIDERATIONS ....................................................................................... 14 4.6 CASE STUDIES FOR SIMILAR PROJECTS IN INDIA/ WORLD .......................................................................... 14 5 MARKET ASSESSMENT ............................................................................................................... 15 5.1 OPPORTUNITIES & DEMAND ESTIMATION ............................................................................................. 15 5.2 TARIFF FIXATION - USER ..................................................................................................................... 16 5.3 TARIFF FIXATION – ADVERTISEMENT AND BRANDING .............................................................................. 18 6 PROJECT FINANCIALS ................................................................................................................. 19 6.1 SCENARIOS ....................................................................................................................................... 19 6.2 COST ESTIMATION ............................................................................................................................. 20 6.3 VIABILITY ASSESSMENT ...................................................................................................................... 21 6.4 FINANCIAL SUPPORT REQUIRED FROM GOVERNMENT .............................................................................. 22 6.5 RECOMMENDED SCENARIO AND SENSITIVITY ANALYSIS ........................................................................... 22 7 STATUTORY & LEGAL FRAMEWORK ........................................................................................... 24 7.1 APPLICABLE LAWS AND POLICIES .......................................................................................................... 24 7.2 LEGAL & REGULATORY FRAMEWORK .................................................................................................... 24 8 INDICATIVE ENVIRONMENTAL & SOCIAL BENEFITS ..................................................................... 26 8.1 ENVIRONMENTAL BENEFITS ................................................................................................................ 26 8.2 SOCIAL BENEFITS ............................................................................................................................... 26 8.3 ECONOMIC BENEFITS ......................................................................................................................... 26 9 STRUCTURING AND PACKAGING OF THE SYSTEM ....................................................................... 28 9.1 BACKGROUND .................................................................................................................................. 28 9.2 BENEFITS OF EXECUTING THIS PROJECT ON PPP MODE............................................................................. 28 9.3 DEVELOPMENT OF STRUCTURING ALTERNATIVES ..................................................................................... 28 9.4 PROJECT STRUCTURE AND RISKS MITIGATION STRATEGY ......................................................................... 29 10 WAY AHEAD .......................................................................................................................... 31 10.2 SUPPORT REQUIRED FROM THE GOVERNMENT ................................................................................... 31 ANNEXURES: .................................................................................................................................... 32 ANNEXURE A: LOCATION DETAILS ................................................................................................................... 32 ANNEXURE B: INDICATIVE SITE SELECTION GUIDELINES ...................................................................................... 36 ANNEXURE C: INDICATIVE DOCKING STATION GUIDELINES .................................................................................. 37 ANNEXURE D: CASE STUDIES FOR SIMILAR PROJECTS IN INDIA/ WORLD ................................................................. 38 ANNEXURE E: FINANCIAL SUMMARY FOR SELECTED ALTERNATIVE ........................................................................ 42 ANNEXURE F: TERMS OF REFERENCE FOR TECHNICAL CONSULTANT ..................................................................... 45 ANNEXURE G: TERMS OF REFERENCE FOR TRANSACTION ADVISOR ....................................................................... 47 Directorate of Urban Land Transport April, 2012 Prefeasibility Report for Developing a Public Bicycle Sharing Scheme in Mysore on PPP Basis 1 Executive Summary 1.1.1 Karnataka has emerged as a key State with knowledge-based industries such as IT, biotechnology and engineering. It is the science capital of India with more than 100 Research and Development (R&D) centres, and a preferred destination for multinational corporations with more than 650 such companies. Such all-round developments trigger the need for well-developed social, physical and industrial infrastructure, part of which can
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