FAQs

1. What is the role of TNIDB in development of infrastructure projects?

The Tamil Nadu Infrastructure Development Board (TNIDB) was set up under the Tamil Nadu Infrastructure Development Act (TNID Act) 2012. The Board is envisaged as the nodal agency for infrastructure development in the State of Tamil Nadu. TNIDB is expected to play a critical role in infrastructure development in the State by facilitating project development in a seamless, efficient and transparent manner.

The Board is a multi-faceted organisation constituted to act as a

  • Catalyst for project development
  • Project facilitator
  • Policy driver
  • Project monitoring agency
  • Management of state support to projects

2. What kind of projects could be taken to the Board for approval?

Infrastructure projects in the 21 sectors listed in the TNID Act 2012 may be taken to the Board for approval. In this context, 'infrastructure' refers to the provision of assets or services in any one or more than one of the sectors listed in the TNID Act 2012. The proposed mode of procurement for the projects could be both public procurement and public private partnerships. Infrastructure projects of value exceeding Rs. 500 crore require approval from the Board. However, in the case of PPP projects, approval is required all projects of a value in excess of Rs. 10 crore. Projects that are undertaken by the Central Government or a public sector undertaking of the Central Government, either independently or as a joint venture with the State Government, do not require approval from the Board.

3. What are the sectors in which infrastructure projects could be undertaken?

As per the Tamil Nadu Infrastructure Development Act 2012, the infrastructure projects in the following 21 sectors could be undertaken:

  • Agriculture Infrastructure including Marketing and Post Harvest Infrastructure
  • Development of Minor Minerals
  • Drinking and Industrial Water Supply Systems, Desalination Plants
  • Education-related Infrastructure
  • Fisheries
  • Gas and Gas Works
  • Health Infrastructure
  • Housing, including Slum Development and Development of Satellite Towns
  • Industrial Estates, including Industrial Parks and Special Economic Zones
  • Information and Communication Technology-related Projects
  • Inland Waterways other than National Highways
  • Irrigation including Dams, Irrigation Structures, Canals
  • Land Reclamation Projects
  • Ports (Other than major ports) and Harbours thereof
  • Power Generation, Transmission and Distribution Systems
  • Roads, Bridges, including Rail over and under Bridges and By-passes
  • Solid Waste Management
  • Sports & Recreation Infrastructure
  • Tourism and Hospitality Projects
  • Urban Transport Systems, Bus Terminals, Multi Level Parking Facilities
  • Waste Water, Sewerage Treatment Systems

As per Section 7(a) of the Tamil Nadu Infrastructure Development Rules 2012, multi-sector projects also can be undertaken in the State.

3. What are the different modes of procurement under TNIDB?

Infrastructure projects in the State could be undertaken through both Public Procurement and Public Private Partnership modes under TNIDB.

5. What is a Project Concept Note?

Project Concept Note is a project summary note initiated either by a sponsoring government agency or in some cases by the Board on its own accord, based on inputs from a study (conducted on its own or by a third party). It gives an outline of the project and its boundaries. Under TNIDB Regulations, preparation of a Project Concept Note is mandatory and is the first step towards acknowledgement of the project for consideration by the Board. The project identification and prioritization process is mentioned in Section 14 subsections 1 and 2 of the TNID Act 2012. The Project Concept Note is detailed in Regulation 7 of TNIDB Regulations 2013. The format of the project concept note is detailed in Appendix 1 of the TNIDB Regulations 2013.

The Project Concept Note covers the basics of the project in terms of type of infrastructure and services to be provided. The project concept note is intended to provide basic project information, including all the departmental information available. If a feasibility study is available for the same, then the feasibility report will be an additional input to be submitted to the CEO, TNIDB along with the Project Concept Note.

6. What is a Feasibility Study?

A Feasibility Study covers the various aspects of the project including market impact, technical issues, economic and social impact, as well as the legal issues pertaining to the project. The Study also makes an objective assessment of project risks and their allocation between the state and the private sector partner in a PPP project. Through the feasibility study, the project sponsor may assess the suitability of the project for a PPP mode of procurement. If the PPP mode is deemed non-suitable, the project sponsor may decide to implement the project through the public procurement mode. This decision making is done by assessing the cost and benefits of the project being implemented through a PPP mode vis-à-vis a public sector comparator.

An effective feasibility report will help the project sponsor / TNIDB decide on the following: (a) proceeding with/rejecting the project; (b) mode of implementation; (c) project structuring; (d) extent of financial support and modalities thereof and; (e) appropriate concession mechanisms.

At the time of the feasibility study, the project sponsor is also required to do a Value for Money Assessment (VfM) to assess the impact of implementing the project through the PPP mode in comparison with implementing via the public sector mode and the ensuing costs can be used as a benchmark for tendering the project. A Value for Money Assessment is an approach to evaluate whether implementing the project in the PPP mode is an optimal proposition for the government as compared to public sector procurement.

The feasibility study should be comprehensive in covering the market, socio-economic and technical aspects of the project. It should include the following:

  • Market analysis:

    This is undertaken to assess the need and appropriate scope for the project, including, the existing demand, forecasted demand, options for fulfilling the demand and service level measurement.
  • Social and environmental feasibility:

    This part of the feasibility study will cover the impact assessment of the project from the societal and environmental angle.
  • Technical feasibility:

    Technical feasibility will go in tandem with market feasibility, since the choice of technology can be impacted by the size of the market or vice versa. For example, there could be a cluster solution in an urban context if smaller solutions for each municipality are unviable, given the capital costs.
  • Risk assessment:

    A feasibility study should also go in-depth into the risks associated with the project and their impact on decision-making with respect to technology, scale, capital and public support.
  • Financial analysis:

    The analysis should cover the existing tariff structure, proposed increases and the gap that may need to be funded through the public sector mechanism.
  • Economic feasibility:

    An economic assessment is a more holistic measure that incorporates financial inflows as only one of the many aspects in its evaluation. For instance, in a sanitation project, the financial analysis will typically assess the inflows from higher payments and capital costs, while the economic assessment will also include savings in health costs and improvement in productivity.
  • Value for money assessment:

    A value for money assessment establishes the suitability of the selected mode of execution in comparison to other options.

7. What is Value for Money (VfM) Assessment?

A Value for Money (VfM) Assessment is a quantitative and qualitative assessment of the costs and benefits associated with a project. It is used to establish whether implementing a project in the PPP mode is an economically optional proposition for the Government or the public agency. The VfM analysis takes into account direct and indirect execution costs, financing costs, transaction costs, cost of asset transfer on project completion, project monitoring costs and a cost estimation of the possible risks thereof.

8. What is a Detailed Project Study?

This refers to a detailed study of the project made after the preliminary investment decision, in order to ascertain the capital costs, technological parameters, description of the technology to be used, technical specifications, plan schedule to assist the financial investment and the plan for implementation of the project.

9. Does TNIDB provide financial support for undertaking project preparatory studies?

Yes, TNIDB provides financial support for undertaking project preparatory studies. The support is provided from the Project Preparation Fund (PPF). The PPF may be used for the following purposes:

  • Conducting studies
  • Legal reviews and commercial assessment studies
  • Hiring the services of experts and consultants
  • Preparing feasibility studies
  • Preparing detailed project studies
  • Any technical study required to finalise the technical, legal or financial parameters of a project, including legal reviews and commercial assessment studies
  • Preparation of Impact Assessment Studies, including Environmental Impact Assessment Studies
  • Preparation of tender documents, including standard tender documents
  • Preparation of other essential project documentation prior to signing the concession agreement
  • Capacity building and training
  • Research and related purposes
  • Conduct of outreach events, including seminars and conferences

10. How do I/does one apply to avail support from the Tamil Nadu Infrastructure Development Fund (TNIDF)?

In order to avail support from TNIDF, the sponsoring agency should make an application for assistance, to the Board in the prescribed format along with a financial model for the project. The financial model should be prepared in the manner prescribed in the TNIDB Regulations, 2013. In cases where the extent of financial support from the TNIDF is proposed to be a tender criterion, the same should be clearly indicated in the application. The Board may, after consideration of the application, project scope, structure and the financial model, approve the extent and form of proposed financial support from TNIDF with such modifications as it considers necessary.

11. What are the different types of PPP allowed under the TNID Act?

The following types of PPPs are allowed under the TNID Act:

a) Investment or Financing related Agreements

  1. Build-Operate-and-Transfer (BOT): A contractual arrangement whereby the concessionaire undertakes the construction, including financing, of a given infrastructure facility, and the operation and maintenance thereof. The concessionaire operates the facility over a fixed term during which they are allowed to charge the users appropriate tolls, fees, rentals and charges as incorporated in the contract to enable the recovery of investment in the project. The concessionaire transfers the facility to the Government at the end of the fixed term as specified in the concession agreement.
  2. Build-Own-and-Operate (BOO): A contractual arrangement whereby the concessionaire is authorised to finance, construct, own, operate and maintain an infrastructure or development facility from which the concessionaire is allowed to recover the total investment by collecting user levies from facility users. The ownership of the land will be vested with the Government. Under this mode, the concessionaire owns the assets of the facility and may choose to assign its operation and maintenance to a facility operator. The transfer of the facility to the Government is not envisaged in this structure; however, the Government may terminate its obligations after the specified time period.
  3. Build-Own-Operate-Transfer(BOOT): A contractual arrangement whereby the concessionaire is authorised to finance, construct, maintain and operate a project and whereby such a project is to be vested with the concessionaire for a specified period. During the operation period, the concessionaire will be permitted to charge user levies as specified in the Concession agreement and recover the investment made in the project. The concessionaire is liable to transfer the project to the Government after the expiry of the specified period of operation.
  4. Build-Transfer-and-Operate (BTO): A contractual arrangement whereby the Government contracts out an infrastructure facility to the concessionaire to construct the facility on a turn-key basis, assuming cost overruns, delays and specified performance risks. Once the facility is commissioned satisfactorily, the concessionaire is given the right to operate the facility and collect user levies specified in the Concession agreement. The title of the facilities always vests with the Government in this arrangement.
  5. Design-Build-Finance-Operate-Transfer (DBFOT): A contractual arrangement whereby the concessionaire is bestowed with the responsibility of designing, building, financing and operating the facility before transferring the project to the Government after the expiry of the specified period. The concessionaire operates the facility over a fixed term during which they are allowed to charge the users appropriate tolls, fees, rentals and charges as incorporated in the contract to enable the recovery of investment in the Project.

b) Operations and Maintenance related Agreements

  1. Management Agreement: A contractual arrangement whereby the Government entrusts the operation and management of a project to the concessionaire for the period specified in the agreement on payment of specified consideration. In such an agreement, the Government may charge the user levies and collect the same either by itself or entrust the collection for consideration to any concessionaire who shall after collecting the user levies, pay the same to the Government.
  2. Lease Management Agreement: A contractual arrangement whereby the Government leases a project owned by it to the concessionaire who is permitted to operate and maintain the project for the period specified in the contract. The concessionaire is allowed to charge the users appropriate fees, rentals and charges as specified in the agreement to enable the recovery of investment in the project.
  3. Build-Lease-and-Transfer (BLT): A contractual arrangement whereby the concessionaire undertakes to finance and construct the project and on its completion hands it over to the Government. The Government then gives the facility to the same operator on a lease arrangement for a fixed period, after which ownership of the facility is automatically transferred to the Government.
  4. Rehabilitate-Operate-and-Transfer (ROT): A contractual arrangement whereby an existing facility is handed over to the concessionaire to invest, refurbish, operate and maintain for a period, at the expiry of which the facility is returned to the Government. The concessionaire operates the facility over a fixed term during which they are allowed to charge the users appropriate fees, rentals and charges as specified in the contract to enable the recovery of investment in the project.
  5. Rehabilitate-Own-and-Operate (ROO): A contractual arrangement whereby an existing facility is handed over to the concessionaire to invest, refurbish, operate and maintain the development facility from which the concessionaire is allowed to recover the total investment by collecting user levies from facility users. The ownership of the land shall be vested with the Government. The transfer of the facility to the Government is not envisaged in this arrangement; however, the Government may terminate its obligations after a specified time period.
News & Events

TNIDB clears Projects to Boost Southern Districts - The Hindu

Tamil Nadu to set up Infrastructure Management Company - Business Standard

Green Light to Finance Vehicle - Smooth ride to Vision 2023 - The New Indian Express

Tamil Nadu Clears Mega Infrastructure Projects - Business line

TN Infrastructure Development Board in pact with IIT-Madras - Business Standard, August 18, 2014

J Jayalalithaa announces construction of 10,000 flats, residential township to fulfill 'Vision 2023 plan', 15 July 2014

Registered MSMEs in TN employ 6.3 million people - Business Standard, July 14, 2014

Tamil Nadu moots new infrastructure fund - The Hindu, June 13, 2014

Budget 2014: Chennai focal point for two industrial corridors - Times of India, Jul 10, 2014.

TN plans satellite town in Kadambur - Times of India, Jul 16, 2014.

Infra development: Tamil Nadu seeks Singapore’s help - Business Line JULY 4.

K Shanmugam calls on J Jayalalithaa; discusses bilateral ties - The Economical Times, Jul 4, 2014.

Tamil Nadu moots new infrastructure fund - The Hindu, June 13, 2014.

Executive Education Programme on Project Management for Complex Infrastructure Projects.

Workshop on "Understanding TNIDB's Vision, Structure and Processes" scheduled on 25.03.2014, organised by Anna Institute of Management, Chennai.

TN Infrastructure Board inducts Agri Secretary - The Hindu, February 3, 2014.

TN to focus on road projects, infrastructure development - The Hindu, October 7, 2013

Tradable development rights for private participants of PPP projects - The Hindu November 15, 2012

Board set up to give boost to infrastructure - Decan Chronicle November 13, 2012

Tamil Nadu Chief Minister Selvi Jayalalithaa's Vision 2023: 11% growth, per capita income of Rs 4,50,000 - Business Standard May 16, 2012

Infrastructure Development Board for Vision 2023 - IBN Live May 10, 2012

Honble Chief Minister chaired the first meeting of Tamil Nadu Infrastructure Development Board 

More on Vision 2023 for Tamil Nadu - The Hindu Business line March 27, 2012

Target is 11% growth in Gross State Domestic Product - The Hindu CHENNAI, March 22, 2012

Institutional framework for Tamil Nadu Infrastructure Development Board soon - THE HINDU CHENNAI, March 21, 2012