Thus five SPVs may be formed each under the respective administrative department.
a. Roads – Under PWD
b. Solid Waste Management – Under LSGD
c. Energy – Under KSEB
d. Drinking Water & Liquid Sewerage management – Under KWA
e. Communication Network : Under Department of IT
Necessary technical and managerial manpower from respective department may be deputed to these SPVs. SPVs may appoint professionally skilled staff on long term contract for critical functions such as finance and marketing or hire the services of professional agencies based on work requirement.
Capital Structure & Operation Plan:
Each SPVs may be formed initially as wholly owned companies with an authorized capital of Rs 100Cr and a paid up capital of Rs 10Cr. The SPVs will complete the necessary planning process such as acquisition/ pooling of developable land, preparation of site specific master plans and procurement of basic regulatory approvals from the government authorities.
To meet the land cost, the government may authorize issue of Land Bonds which can be managed by an existing institution of the state such as KFC/KSIDC.
Capital Expansion & Financial Closure of SPVs:
Completing the riskier initial planning phase by GoK, the project would be able to offer sufficiently higher risk-reward ratio to attract private investment in execution phase. Accordingly GoK may then dilute its equity up to a minimum of 26%, by infusion of institutional and private capital into those SPVs and achieve financial closure with a mix of debt and central sector funds (where available) as per the approved project financing plan under each SPV.
Expected Economic/ Benefits:
The benefits associated to the society from a project like OAGC are:
i. Vehicle Operating Cost Benefits
ii. Vehicle Operating Time Benefits
iii. Access and encouragement of Public Transport.
iv. Benefits from reduction in Road Accidents
v. Multiplier Benefits from Users of the OAGC
vi. Benefits from Private Investments along the OAGC
vii. Employment Generation & Additional Economic Benefits from Implementation of the OAGC Project