IL&FS Infrastructure Development Corporation Ltd. May 2008

1. Madhya Pradesh – Destination Unveiled Possibilities of development of tourism project through PPP in MP A Presentation By IL&FS Infrastructure Development Corporation Ltd. May 2008

2. In this presentation • Tourism in India • 2. Tourism in Madhya Pradesh • 3. Public Private Partnership ( PPP) • 4. Project Development • 5. About IL&FS • 6. Project Development & Promotion Partnership PDPP • 7. Select Success Stories • 8. Conclusion

3. Tourism in India – Some Facts & Figures

4. Tourism in India JBIC ranked India as the fifth most attractive investment destinations. Conde Nast Traveler, one of the world’s most celebrated travel magazines ranked India amongst the top tourist destinations of the world. Tourism is one of the third largest net earner of foreign exchange for the country and also one of the sectors, which employs the largest number of manpower. India has significant potential for becoming a major global tourist destination.

5. Tourism in India – Figures 0.8% share of world market Tourists (2006) 4.6 million (International) 382 million (domestic) Employment Direct - 10.7 million Indirect – 24.4 million Export earnings ~ US $ 9.6 bn 2006 Contribution to GDP Direct 2% Overall 5.9%

6. FOREIGN EXCHANGE • Tourism is one of the third largest net earner of foreign exchange for the country (2001-02): • - Gem & Jewelry US$ 7.40 Bn. • - Readymade Garments US$ 5.50 Bn. • - Tourism US$ 3.30 Bn.

7. EMPLOYMENT • Every Rs.1 million ($25,000) invested creates… • Tourism (directly) 47.5 Jobs • Tourism (indirectly) 89 Jobs • (sub-sector of hotels and restaurants, transportation etc.) • Agriculture 44.6 Jobs • Manufacturing 12.6 Jobs

8. Tourism in India : Key Potential • World class cultural and natural heritage tourism assets • Multi-themed product development opportunities • Strong global, regional and national tourism market growth prospects • Strong potential to increase market share • Potential to go beyond the 3 S’s of tourism – experience tourism

9. Tourism in India – Major concerns Need – Make projects lucrative for private sector Investment • Approach & Connectivity • Lack of Proper Infrastructure • Lack of Information - Marketing • Mismatch between demand and supply • Poor availability of trained manpower (guides, hospitality) • . Regulatory issues – coordination between departments

10. Tourism in Madhya Pradesh

11. A Glimpse of Tourism in Madhya Pradesh • Kanha is the largest Wildlife Sanctuary in Asia • Kahjuraho has some of the most famous Sculptures in the world • Bhimbeteka is the oldest Cave Paintings in the world • Sanchi houses the oldest Buddhist Stupa in the world • 9 national parks and 25 game sanctuaries out of which four are major tiger reserves. • Sacred rivers of Narmada, Tapti, Son and Kshipra have a string of religious places located on their banks. • Pachmarhi one of the most beautiful hill stations. • Tourist festivals displaying variety of folk and performing arts at Khajuraho, Orchha, Pachmarhi, Indore-Ujjain (Malwa) and Bhopal. Pachmarhi Bhimbeteka Khajuraho Kanha National Park Sanchi

12. Major Tourism Circuits • On the basis of the proximity of destinations and linkages between them, State Government has identified 4 major tourist circuits in the State: • Gwalior - Shivpuri - Orchha - Khajuraho • Indore - Ujjain - Maheshwar - Omkareshware - Mandu • Jabalpur - Bhedaghat - Mandla - Kanha - Bandhavgarh • Bhopal -Sanchi - Bhojpur - Bhimbetka - Panchmarhi

13. Attractions along key circuits

14. Investment Requirements – Tourism Perspective Plan & ADB Study Source : Tourism Perspective Plan, MoT Source : ADB India Tourism Infrastructure Study, 2007

15. Initiatives Of Madhya Pradesh Tourism • MP has numerous tourist attractions. • Focus on positioning MP in the national & International media . • MP was awarded the National Tourism Award 2007-08. • Some of its recent initiatives include: • Heritage Meet for heritage property owners • Carnival in ‘Tourist Hubs’ • Integrated national media campaign

16. Public Private Partnership ( PPP )

17. PPP Approach Goal • Attract private investments for infrastructure projects • Leverage Budgetary Resources • Need to improve efficiency in service delivery Need PPP approach • Private Sector contribution for: - Financial investments - Management practices - Efficiency in service delivery • Public Sector contribution limited to: - Financial gap funding - Providing institutional commitment to project Advantages • Attracts market investments • Reduces cost to public sector • Improves service delivery

18. Why Public Private Partnership ? “ PPPs enable the public sector to benefit from commercial dynamism, the ability to raise finances in an environment of budgetary restrictions, innovation and efficiencies, harnessed through the introduction of private sector investors who contribute their own capital, skills and experience ”

19. Acceleration of Infrastructure Provision Faster Implementation Value for Money Partnership Building Enhanced Public Management Genuine Risk Transfer Output Specification Asset Performance & Reduced Costs Performance-Related Reward Private Investment Promotion Improved Quality of Service Advantages of PPP

20. Partnership Private Sector Government Investments that are economically & socially beneficial In Short, The Key Objective: Expanding the possibilities for efficient infrastructure provision through ‘Public-Private Partnership’

21. Project Development – A step beyond consultancy

22. Challenge of PPP Capital Projects The Missing Link – Project Development

23. Project Development: What it is (1/2) • Project concept • Technical & Financial Evaluation • Statutory & Regulatory Approvals • Approvals for various grants & subsidies • Development of various contracts • Setting up of a Project Company (SPV)

24. Project Development: What it is (2/2) • Vendor Development • Interaction with FIs • Bid Documents & Bid Process Management • Selection of Operator • Facilitation for financial closure • Hand holding during implementation

25. Project Development: What it is not • Construction and operation of a project: • That is to be done by the selected bidder • Mechanism leading to privatization

26. Project Development: Why • To mitigate technical and financial risks by association of expert bodies • To manage bottlenecks related to approvals • To obtain best value of the project for the state • To minimize the implementation time for a project • To leverage resources of government:PPP • PPP leads to building up of capacity of local people

27. Project Development: What it needs • A project anchor like State Government • A project development agency • A project development fund • 1-3% of the project cost and • To be recovered from the successful bidder • Upfront finalization of legal agreements and bidding criteria by the project anchor

28. Project Development and Promotion Partnership (PDPP)

29. PDPP Arrangement • Key Features • Partnership for development with State Governments • Hands on mode of operations • Sharing of Risks and Rewards (result-oriented) • Mixture of Govt. approach & Private efficiency • Key objectives • Need assessment for development • Integrated development • Public Private Partnership • Leveraging limited public resources with private investments • Bringing in private sector efficiency and management skills

30. PDPP Approach • Identification of key development needs & potential projects • Integrated Development through Project Development • Phased implementation • Potential benefits to be staggered • 6-12 m, 1-3 years, more than 3 years

31. About IL&FS Infrastructure Development Corporation

32. Genesis Mandate: Commercialization of infrastructure projects Value added financial services Initial JV format: Central Bank of India (CBI) Unit Trust of India (UTI) Housing Development Finance Company Limited (HDFC) IL&FS formally commenced business in 1988

33. Name% Government Shareholding -Life Insurance Corporation OF India 26.98 Central Bank of India 9.18 State Bank of India 7.68 Abhu Dhabi Investment Authority 12.73 Sub-total 56.57 Private Shareholding Housing Development Finance Corporation 13.10 ORIX Corporation, Japan 23.82 IL&FS Employees Welfare Trust 6.51 Sub-total 43.43 TOTAL 100.00 Current Shareholding

34. IL&FS Infrastructure Development. Corp. Ltd. (IL&FS IDC) 100% subsidiary of IL&FS Project Development Advisory arm More than 200 professionals Executing Project Development Mandates in ~ 20 states IL&FS / IIDC provides Complete Process and Programme Management from the ‘Concept’ Stage to ‘Implementation’ We are ‘Project Developers’ & not just Consultants

35. Sectoral Expertise Power Water Special Economic Zones Telecom Sanitation Solid Waste Mgt Ports Sewerage Environment Airports Urban Infrastructure Rehabilitation of Assets Roads & Bridges Health E Governance Tourism Education Municipal Finance In each sector, IL&FS has established specific replicable, stand alone, prototypes

36. Representative Government Partnerships Government of India (Ministries) Commerce Textiles Information Technology • Central Public Sector Undertaking • ONGC • Coal India Limited • MMTC • State Governments • Tripura Assam Nagaland • Uttranchal Jharkhand Chattisgarh • Tamil Nadu Andhra Pradesh Kerala • Karnataka Orissa Madhya Pradesh • Maharashtra Gujarat Rajasthan

37. Geographical spread Dehradun Srinagar Shimla Chandigarh Kathmandu Delhi Gangtok Jaipur Guwahati Patna Kota Agartala IL&FS IDC has offices at: Mahindra Towers, New Delhi (corporate head office) Front offices at: Jaipur, Raipur, Patna, Guwahati, Calcutta,Ahmedabad, Mumbai, Bhopal, Vadodara, Rajkot, Shimla, Ranchi, Tirupur, Bhubaneshwar, Banagalore, Hyderabad, Chennai, Chandigarh, Dehradun,Thiruvanthapuram, & Kathmandu (Nepal) Rajkot Ranchi Ahmedabad Bhopal Kolkata Raipur Vadodara Bhubaneswar Mumbai Hyderabad Belgaum Goa Bangalore Chennai Tirupur Thiruvananthapuram

38. Select PDPP Arrangements • Andhra Pradesh • Assam • Bodoland Territorial Council (BTC) • Chhattisgarh • Himachal Pradesh • Jharkhand • Kerala • Orissa • Punjab • Tripura • Uttaranchal • Gujrat • West Bengal • Karnataka

39. Strengths of IL&FS IDC • Have several Success Stories to tell • Experience in structuring projects in PPP formats • Linkages with Major Private Sector Developers - Good will in the market and confidence of industry in IL&FS • Strong relationships with Central Government • Associations with State Government clients • Associations with Financial Institutions and multi laterals • Ability to draw upon diversified services from IL&FS Group companies • Ability to tie up and utilise local resources

40. Select Success Stories

41. Jal Mahal Integrated Tourism Project • Project Scope: Development of Jal Mahal and Mansagar Lake area into a sustainable, eco friendly tourism destination Including lake restoration, monument conservation and lake precincts development • Project Cost: Rs. 200 Crores • Concession agreement signed

42. Development of Tijara Fort • Project Scope: Development of tourism and hospitality facilities within Tijara Fort • Project Cost: Rs. 25.0 crores • Private Sector partner selected

43. Albert Hall Museum: O&M • The Project: • restoration and conservation of the Museum building and conservation and documentation of the antiquities contained therein. • PSP to co-finance the facilities and O&M • Govt of Rajasthan would continue to hold the museum inventory on its books. 

44. Lakes’ Restoration and Management • GoR has identified 5 lakes for undertaking Detailed studies: • Nakki – Mt. Abu • Fatehsagar, Pichola – Udaipur • Annasagar – Ajmer • Sarovar - Pushkar

45. Conservation of Quila Nabha • Quila is 18th century historical fort located in the heart of the walled city of Nabha, Punjab. • Unsolicited Proposal received from Nabha Foundation, a Trust incorporated by Khemka Family • Project structured on Swiss Challenge • Restoration and Conservation of Quila Complex and Reuse as the Business School • Lease Period : 66 years • Minimum Investment for Restoration : Rs 15 Cr

46. Rajinder Kothi • Redevelopment of Rajinder Kothi at Patiala in Punjab as Heritage Hotel • Restoration and Conservation of the Property • Reuse of Property as Heritage Hotel • Lease Period : 30 years • Nimrana Hotels Pvt Limited selected as concessionaire through competitive bidding

47. Agartala Budget Hotel: Milestones • Land Allotment from GoT • Roots Corporation Limited set up “Ginger” Hotel. • Project Started Commercial Operation from 21st August, 2007. • NEC Grant of Rs. 9 million through State Government as Viability Gap Funding. Already released to Roots Corporation. 1st hotel project promoted by reputed Hospitality chain in the NER

48. Guwahati Budget Hotel: Milestones • Land Identification & Allotment • Roots Corporation agreed to set up “Ginger” Hotel. • Agreement signed with GoA in January 07. • Project construction started – foundation completed. • Hotel to be commissioned by October 2009.

49. Tezpur Budget Hotel: Milestones • Feasibility Studies completed • Land Identification & Allotment • Sarovar Group agreed to set up three star category hotel in Management Contract. • Developer identified - Mentok RI Projects Pvt. Ltd has tied up with Sarovar. • Hotel to be commissioned in 24 months.

50. Crowborrough Hotel: Milestones • Mandate received from MTDC • Feasibility Studies Completed • Project Structuring – approved by GoM/MTDC • Bid Process Management completed • Private Developer selected. • However the 3rd highest bidder went to court and presently the matter is subjudice