Public–Private Partnership Monitor The first edition of the Public–Private Partnership Monitor tracks the development of the public–private partnership (PPP) business environment and the challenges of doing PPPs in nine of the Asian Development Bank’s developing member countries (DMCs): Bangladesh, the People’s Republic of China, India, Indonesia, Kazakhstan, Papua New Guinea, the Philippines, Thailand, and Viet Nam. It is divided into four main categories: Regulatory Framework, Institutional Capacity for Implementation, PPP Market Maturity, and Financial Facilities. The publication aims to increase the level and quality of private sector participation in infrastructure in the DMCs by serving as an active platform for dialogue between the public and private sectors. About the Asian Development Bank ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains home to a large share of the world’s poor. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration. Monitor Partnership Public–Private Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. PUBLIC–PRIVATE PARTNERSHIP MONITOR ASIAN DEVELOPMENT BANK 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines ASIAN DEVELOPMENT BANK www.adb.org Public–PrivATE PARTNERSHIP MONITOR ASIAN DEVELOPMENT BANK Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) © 2017 Asian Development Bank 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines Tel +63 2 632 4444; Fax +63 2 636 2444 www.adb.org Some rights reserved. Published in 2017. ISBN 978-92-9261-016-6 (print), 978-92-9261-017-3 (electronic) Publication Stock No. TCS179134-2 DOI: http://dx.doi.org/10.22617/TCS179134-2 The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. The mention of specific companies or products of manufacturers does not imply that they are endorsed or recommended by ADB in preference to others of a similar nature that are not mentioned. By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area. This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) https://creativecommons.org/licenses/by/3.0/igo/. By using the content of this publication, you agree to be bound by the terms of this license. For attribution, translations, adaptations, and permissions, please read the provisions and terms of use at https://www.adb.org/terms-use#openaccess This CC license does not apply to non-ADB copyright materials in this publication. If the material is attributed to another source, please contact the copyright owner or publisher of that source for permission to reproduce it. ADB cannot be held liable for any claims that arise as a result of your use of the material. Please contact [email protected] if you have questions or comments with respect to content, or if you wish to obtain copyright permission for your intended use that does not fall within these terms, or for permission to use the ADB logo. Notes: In this publication, “$” refers to US dollars. ADB recognizes “China” as the People’s Republic of China, “Vietnam” as Viet Nam, “Orissa” as Odisha, and “Saigon” as Ho Chi Minh City. Corrigenda to ADB publications may be found at http://www.adb.org/publications/corrigenda iii CONTENTS TABLES AND FIGURE iv FOREWORD x ACKnowledgments xii DEFINITIONS xiii ABBREVIATIONS xvi GUIDE TO UNDERSTANDING THE REPORT xxii 1. BANGLADESH 1 2. INDIA 60 3. INDONESIA 150 4. KAZAKHSTAN 226 5. PAPUA NEW GUINEA 271 6. PEOPLE’S REPUBLIC OF CHINA 303 7. PHILIPPINES 357 8. THAILAND 429 9. VIET NAM 498 APPENDIX: Methodology 559 iv TABLES AND FIGURE Tables 1 Country-Level Topics xxii 2 Sector-Level Topics xxiii 3 Details of Available Government Support for PPP Projects in Bangladesh 13 4 PPP-Promoting Institutions in Bangladesh 15 5 PPP-Procurement Process in Bangladesh 19 6 PPP-Pipeline of Road Projects 24 7 Examples of Current Toll Rates for PPP Road Schemes 26 8 Typical Risk Allocation Arrangements in Road PPP Contracts 26 9 Challenges for PPP Progress in Road Sector 28 10 PPP Pipeline of Railways Projects 29 11 Challenges for PPP Progress in Rail Sector 30 12 Port Sector Regulatory Agencies in Bangladesh 31 13 PPP Pipeline of Maritime Projects 32 14 Typical Terminal Handling Charges 34 15 Challenges for PPP Progress in Port Sector 35 16 Energy Sector Regulatory Agencies in Bangladesh 37 17 PPP Pipeline of Energy Projects 38 18 Challenges for PPP Progress in Energy Sector 43 19 Water Sector Regulatory Agencies in Bangladesh 45 20 PPP Pipeline of Water Projects 46 21 Chittagong Water Supply and Sewerage Authority 46 22 Challenges for PPP Progress in Water Sector 47 23 Social Infrastructure Sector Regulatory Agencies in Bangladesh 49 24 PPP Pipeline of Social Infrastructure Projects 50 25 Challenges for PPP Progress in Social Infrastructure Sector 54 26 Details of Available Government Support for PPP Projects in India 77 27 PPP-Promoting Institutions in India 80 28 PPP-Procurement Process in India 84 29 Indicative Project Finance Hard Currency Loan Terms 86 30 Indicative Local Currency Loan Terms 87 31 PPP Pipeline of Road Projects 90 32 Examples of Current Toll Rates 92 33 Typical Risk Allocation Arrangements in Road PPP Contracts 93 34 Challenges for PPP Progress in Road Sector 95 35 Typical Risk Allocation Arrangements in Railway PPP Contracts 99 36 Challenges for PPP Progress in the Rail Sector 100 37 Port Sector Regulatory Agencies in India 103 TABLES AND FIGURE v 38 PPP Pipeline of Maritime Projects 104 39 Typical Risk Allocation Arrangements in Port PPP Contracts 106 40 Challenges for PPP Progress in the Port Sector 107 41 Airport Sector Regulatory Agencies in India 109 42 PPP Pipeline of Airport Projects 110 43 Typical Risk Allocation Arrangements in Airport PPP Contracts 112 44 Challenges for PPP Progress in the Airport Sector 113 45 Energy Sector Regulatory Agencies in India 116 46 PPP Pipeline of Energy Projects 118 47 Typical Risk Allocation Arrangements in Energy PPP Contracts 122 48 Challenges for PPP Progress in the Energy Sector 123 49 MSW Sector Regulatory Agencies in India 124 50 Typical Risk Allocation Arrangements in MSW PPP Contracts 127 51 Challenges for PPP Progress in MSW Sector 128 52 Water Sector Regulatory Agencies in India 130 53 PPP Pipeline of Water Projects 131 54 Typical Risk Allocation Arrangements in Water PPP Contracts 132 55 Challenges for PPP Progress in Water Sector 133 56 Social Infrastructure Sector Regulatory Agencies in India 135 57 PPP Pipeline of Social Infrastructure Projects 136 58 Typical Risk Allocation Arrangements in Social Infrastructure PPP Contracts 138 59 Challenges for PPP Progress in Social Infrastructure Sector 138 60 ICT Sector Regulatory Agencies in India 140 61 PPP Pipeline of ICT Projects 141 62 Typical Risk Allocation Arrangements in ICT PPP Contracts 143 63 Challenges for PPP Progress in the ICT Sector 144 64 Details of Available Government Support for PPP Projects in Indonesia 161 65 PPP-Promoting Institutions in Indonesia 163 66 PPP-Procurement Process in Indonesia 167 67 Indicative Project Finance Hard Currency Loan Terms in Indonesia 170 68 Indicative Project Finance Local Currency Loan Terms in Indonesia 171 69 PPP Pipeline of Road Projects 173 70 Examples of Current Toll Rates on Roads with Open Toll System (Rupiah per trip) 176 71 Examples of Current Toll Rates (Effective from 2015) on Roads with Closed Toll System (Rupiah per km) 176 72 Typical Risk Allocation Arrangements in Road PPP Contracts (Concessions) 176 73 Challenges for PPP Progress in Road Sector 178 74 Railways Sector Regulatory Agencies in Indonesia 179 75 PPP Pipeline of Railway Projects 180 76 Challenges for PPP Progress in the Rail Sector 181 77 Port Sector Regulatory Agencies in Indonesia 183 78 PPP Pipeline of Maritime Projects 184 79 Typical Terminal Handling Charge 188 80 Typical Risk Allocation Arrangements in Port PPP Contracts 189 81 Challenges for PPP Progress in Port Sector 190 82 Airport Sector Regulatory Agencies in Indonesia 192 83 PPP Pipeline of Airport Projects 193 vi TABLES AND FIGURE 84 Challenges for PPP Progress in the Airport Sector 194 85 Energy Sector Regulatory Agencies in Indonesia 197 86 PPP Pipeline of Energy Projects 199 87 PPP Pipeline of Energy Projects 199 88 Typical Risk Allocation Arrangements in Energy PPP Contracts 203 89 Challenges for PPP Progress in the Energy Sector 205 90 Water Sector Regulatory Agencies in Indonesia 207 91 PPP Pipeline of Water Projects 209 92 Current Water Tariff in Jakarta, 2016 211 93 Current Water Tariff PDAM Tirtawening Kota Bandung, 2015 211 94 Typical Risk Allocation Arrangements in Water Concession Contracts 212 95 Typical Risk Allocation Arrangements in Water PPP Contracts 213 96 Challenges for