Tamil Nadu is one of India's largest and most urbanized economies. To achieve its goal of becoming a $1 Trillion economy by 2030, the state recognizes the need for massive, sustained investment in critical infrastructure. The government is already investing over Rs. 50,000 crore per annum in capital asset creation.

The state has a clear, ambitious economic vision that is directly tied to large-scale infrastructure development, creating a strong demand for new projects.

A high-growth environment with strong government commitment to infrastructure creates a large and stable market for developers and investors.

The government acknowledges that private investment in the state's infrastructure has been "meagre" in the past decade. It intends to address this by creating a robust, investor-friendly framework through this policy to encourage private sector partnerships.

The policy is a direct and proactive measure to correct past shortcomings and aggressively attract private capital into infrastructure.

Signals a significant shift towards a more welcoming and supportive environment for private investors in PPP projects.

The policy aims to create a partnership environment with fair risk sharing, accommodation of private investor concerns, and enhanced capacity of government agencies.

The core philosophy of the policy is to foster genuine partnerships based on balanced risk allocation and mutual understanding.

Businesses can expect a more collaborative and less adversarial approach from the government in structuring and managing PPP contracts.

The policy's objectives include: encouraging private investment, utilizing private sector expertise for efficiency, creating a streamlined and consistent PPP procurement process, ensuring transparent governance, and articulating clear accountability for risks and outcomes.

The policy is designed to be comprehensive, addressing all key aspects of the PPP lifecycle from project selection to long-term contract management.

A well-defined policy framework provides clarity and predictability for investors, reducing project risks and uncertainties.

In the first phase, the government intends to identify and implement 100 iconic projects under PPP mode at a target cost of Rs. 1,00,000 Crores.

An extremely ambitious, quantifiable target has been set for the initial phase, indicating a massive pipeline of ready-to-implement projects.

Huge, immediate opportunity for large-scale infrastructure developers, financiers, and consultants to participate in a large portfolio of iconic projects.

The Tamil Nadu Infrastructure Development Board (TNIDB), established under the TNID Act 2012, is the state-level nodal agency for all PPP projects. The Board is chaired by the Hon'ble Chief Minister and is responsible for PPP policies, standard documents, and capacity building.

A single, high-powered, and legally-backed body (TNIDB) has been designated to oversee and facilitate all PPP projects, providing a centralized point of contact.

Streamlines interactions for developers, as they can engage with a single, empowered agency for policy guidance and project development support.

TNIDB will not only perform governance functions but also develop its own capacity to handle the changing roles required by PPP projects. The policy serves as a broad framework and a guiding document for all government agencies (sponsoring entities).

TNIDB is envisioned as a dynamic and expert body that will adapt to market needs and guide other government departments in PPP implementation.

Indicates a commitment to building long-term institutional expertise in PPPs, ensuring professional and competent project management.

The Board is chaired by the Chief Minister, with the Finance Minister as Vice-Chairperson. The Executive Committee is chaired by the Chief Secretary. The composition includes key ministers and secretaries, ensuring high-level political and administrative oversight.

The governance structure of TNIDB involves the highest levels of state leadership, ensuring strong political will and swift inter-departmental coordination.

High-level oversight provides confidence that projects will receive the necessary political and administrative push for timely implementation.

A clear hierarchy of delegated powers for approvals is established: CEO of TNIDB can sanction up to Rs. 25 lakh from the Project Preparation Fund (PPF); Finance Secretary can sanction up to Rs. 1 crore; the Executive Committee approves project structure and bid documents; and the TNID Board guides overall policy.

Powers for key project preparation and approval stages have been clearly delegated to different levels of the institution to ensure timely decision-making.

A clear delegation of powers prevents bottlenecks and accelerates the project approval process.

The CEO manages day-to-day affairs with an in-house team and external experts. TNIDB will support the creation of PPP Cells in other departments and will make learning resources available online to ensure timely and effective decision-making.

TNIDB will function as a modern, professional organization, building capacity across the government and leveraging digital tools for efficiency.

A commitment to professional management and digital processes enhances transparency and efficiency for all stakeholders.

The policy defines a PPP as an arrangement where a private participant invests in or undertakes the design, development, construction, maintenance, or operation of public infrastructure. Key features are risk allocation (private sector takes risk beyond design/construction) and performance-linked payments. The policy applies to all PPP projects undertaken by any procuring entity of the Government of Tamil Nadu.

The policy applies to genuine risk-sharing partnerships with performance-based contracts, not simple construction or service contracts. Its scope is universal across all government entities.

Businesses should structure their proposals as true PPPs with clear risk allocation to be eligible under this policy.

The policy identifies 7 priority sectors and 23 sub-sectors for PPP projects. This includes a wide range of areas: Agriculture (infra, fisheries, irrigation), Transport (roads, bridges, urban transport, ports), Social (health, education), Industrial (parks, IT, common facilities), Energy (power, gas), Urban Amenities (water supply, housing, waste management), and Recreation (sports, tourism). The list is illustrative and not exhaustive.

The scope of the policy is extremely broad, covering virtually all aspects of physical and social infrastructure.

Provides a vast and diverse array of investment opportunities for private players across the entire economy.

The illustrative list of project types includes Toll Roads, Tourism Resorts, 24x7 Water Supply, Port Development, Bus Terminals, Public Toilets, Electric Bus Operation, Street Lighting, Multi-Level Car Parking, Food Processing, Ropeways, Commercial Complexes, and Affordable Housing.

Provides concrete examples of the types of projects the government is looking to implement under PPP mode.

Helps potential investors identify specific, actionable project ideas that align with the government's priorities.

The policy outlines various standard PPP models for both construction and O&M phases. Construction Models: Build-Operate-Transfer (BOT), Build-Own-Operate (BOO), Build-Own-Operate-Transfer (BOOT), Build-Transfer-Operate (BTO), Design-Build-Finance-Operate-Transfer (DBFOT). O&M Models: Management Agreement, Lease Management Agreement, Build-Lease-Transfer (BLT), Rehabilitate-Operate-Transfer (ROT), Rehabilitate-Own-Operate (ROO). The government is also open to other models on a case-to-case basis.

The government offers a wide and flexible range of internationally accepted PPP models, allowing for customized project structures that best fit the sector and revenue model.

Investors can propose the most suitable PPP model for their project, enhancing flexibility and project viability.

Risks will be allocated based on the principle of which party is best able to manage a particular risk. The risk allocation will be clearly defined in bid documents and concession agreements to avoid future interpretation issues and to allow the project to be run as a viable commercial venture.

The policy commits to a fair and rational risk allocation framework, which is a critical factor for investor confidence and project bankability.

Reduces project uncertainty and risk for private investors, as they will not be expected to bear risks they cannot control.

Provides a comprehensive, though not exhaustive, list of key risks that will be considered for allocation. This includes risks related to Land acquisition, Approvals, Construction, Operations, Finance (cost overrun, interest rate), Change in Law, and Force Majeure.

Acknowledges the full spectrum of risks involved in long-term infrastructure projects and commits to addressing them systematically in the contract.

This detailed consideration of risks provides assurance to investors that potential challenges have been anticipated and will be contractually managed.

TNIDB and government departments will be primarily responsible for identifying potential PPP projects, aiming for a pipeline of 100 projects in the first phase. However, any procuring entity (local bodies, PSUs) or any private firm/individual can also approach TNIDB with a project concept note.

The policy allows for both government-identified and unsolicited (private sector-initiated) project proposals, creating multiple avenues for project initiation.

A major opportunity for private companies to proactively propose innovative projects that may not have been on the government's radar.

The process of suggesting a project does not give any priority to the originator during the bidding process, which will remain transparent. There is no restriction on project size; both small and large projects are encouraged.

While unsolicited proposals are welcome, the procurement process remains competitive and transparent, ensuring a level playing field.

Maintains the integrity of the procurement process while encouraging private sector innovation in project identification.

Projects identified must have a potential revenue stream for cost recovery. The initial project concept note should be brief and based on valid assumptions.

All proposed projects must be commercially viable. The initial concept note is a low-barrier entry point for proposing a project.

Focuses on the financial sustainability of projects, ensuring they are structured as viable business ventures.

The implementing agency must prepare a Detailed Feasibility Report (DFR) before seeking TNIDB approval. The DFR is the most critical document and must cover technical, legal, financial, social, and environmental feasibility, including a Value-For-Money analysis.

The DFR is the cornerstone of project approval. It must be comprehensive and robust, justifying the project's viability and the choice of the PPP model.

Creates significant opportunities for transaction advisory and technical consulting firms to assist government agencies in preparing high-quality DFRs.

Agencies can prepare DFRs in-house, hire consultants, or request TNIDB to hire consultants on their behalf. Funding for DFR preparation can be sought from TNIDB's Project Preparation Fund (PPF).

The government provides financial and institutional support for the crucial project preparation phase, ensuring that projects are well-structured from the beginning.

Reduces the financial burden on implementing agencies and ensures access to expert consultancy for high-quality project preparation.

Projects should ordinarily have an Internal Rate of Return (IRR) between 12% to 20%, depending on risk allocation. The concession period is typically 10 to 30 years but can be extended in exceptional cases. The Executive Committee of TNIDB has full powers to approve project structuring, and TNIDB will process approvals within a time-bound manner.

The policy provides clear financial and temporal parameters for project structuring, offering predictability to investors. Approvals are streamlined and time-bound.

A clear framework for IRR and concession period helps in financial modeling, and the commitment to timely approvals reduces uncertainty.

All PPP procurement will be through a transparent e-procurement process. It will ordinarily involve four stages (REoI, RFQ, RTP, RFP) but can be combined. The process aims to be completed within 180 days. A clear separation of authority is defined for inviting, scrutinizing, and accepting tenders.

The procurement process is designed to be transparent, efficient, and time-bound, providing a clear and predictable path from bid to award.

A standardized and efficient procurement process reduces bidding costs and timelines for private participants.

The procuring entity will consult with potential bidders at various stages in an open manner. Bids will have a single criterion of evaluation (which can be a combination of parameters like Viability Gap Funding, upfront premium, etc.). The Concession Agreement is a crucial document defining the long-term relationship.

The process is consultative, allowing bidders to provide feedback. The evaluation criteria are transparent and singular, avoiding ambiguity.

A consultative and transparent bidding process enhances fairness and allows for better project structuring based on market feedback.

The government commits to providing State Support up to 20% of the project cost for Viability Gap Funding (VGF). For the initial target of Rs. 1,00,000 crore projects, this amounts to a commitment of up to Rs. 20,000 crore. This support can be in the form of subsidy, capital grant, equity, or tax incentives.

The government provides significant direct financial support (VGF) to make commercially unviable but socially important projects bankable.

VGF is a critical tool that bridges the financial gap for many infrastructure projects, creating opportunities in sectors that might otherwise not be viable.

Special incentives may include exemption, deferment, or refund of cesses, royalties, and levies. The Debt-Equity ratio is ordinarily 70:30. The public partner will bear the responsibility of providing an unencumbered land site, which will be leased/licensed to the private partner, not transferred.

The policy offers a range of financial incentives and clarifies key financial parameters like D/E ratio. The government taking responsibility for land provision is a major de-risking factor.

Providing clear land titles is a crucial form of state support that significantly reduces one of the biggest risks in Indian infrastructure projects.

The procuring entity will set up an adequate institutional arrangement for monitoring, including a designated Project Manager and, if needed, an Independent Engineer (IE) and Independent Auditor (IA). The concession agreement will clearly define Key Performance Indicators (KPIs), trigger events, payment mechanisms, termination clauses, and handover mechanisms.

A robust and professional project monitoring framework will be in place to ensure contract compliance and successful project delivery.

A strong monitoring mechanism provides assurance to all stakeholders (including lenders) that the project will be managed professionally throughout its lifecycle.

The policy document is presented as an assurance to private sector participants that their partnership with the government will be guided by a robust, fair, and transparent institutional framework. It also serves as a guide for government agencies to explore and implement sustainable PPP models.

The conclusion reaffirms the government's commitment to creating a world-class PPP ecosystem to achieve its ambitious economic goals.

A strong concluding statement that reinforces investor confidence and the government's strategic intent.

A detailed matrix that maps key topics (e.g., PPP, PPF, DFR, RFP, State Support) to the specific rules and sections of the underlying legal acts: TNTIT (PPP) Rules 2012, TNID Act 2012, TNID Rules 2012, and TNIDB Regulations 2013.

This is a critical legal reference guide. It provides the exact legal provisions that govern each aspect of the PPP process, ensuring full transparency and legal certainty.

Essential for legal teams and advisors to understand the precise legal basis for all policy provisions and contractual obligations.

A flowchart visualizing the entire PPP procurement process, from the initial "CONCEPT NOTE" to "PROJECT MANAGEMENT." It shows the key stages: DFR, DPR, REOI, RFQ, RTP, RFP, and Award of Contract, and indicates where stages can be combined.

Provides a clear, easy-to-understand visual roadmap of the entire project lifecycle, from ideation to implementation.

A useful tool for all stakeholders to understand the sequence and key milestones of the PPP procurement process.

A comprehensive glossary providing precise legal definitions for over 40 key terms used in the policy and related legal documents, such as "Annuity," "Concession Agreement," "Eligible Fixed Assets," "Public Private Partnership," "State Support," and "Viability Gap Funding."

This is the official dictionary for the policy. The precise legal meaning of all terms is defined here, which is crucial for contract drafting and interpretation.

An essential reference for legal and commercial teams to ensure there is no ambiguity in understanding the policy and the resulting contracts.