Business models

Various business models are used for rolling out an E-Government project and according to which, financing and revenue sharing is done.

Self financed

The project is completely self-financed and the project pays its development costs out of its own revenue, with no subsidies. An example is the Bhoomi project which is the Land Records computerization effort by the Government of Karnataka. The project is self-financing. The Government is earning around 20 crores from Bhoomi, a major share of which comes from fees charged to citizens for distribution of RTCs. This has actually resulted in a significant amount of surplus. This has enabled the Government to actually reduce the fees from Rs 15 per copy to Rs. 10 per copy.

PPP

A public-private partnerships (PPP) is a contract between a private sector entity and a government body that call for the private partner to deliver a desired service and assume the associated risks.

Essential conditions in the definition are as

• Arrangement with private sector entity: The asset and/or service under the contractual arrangement will be provided by the Private Sector entity to the users. An entity that has a majority non-governmental ownership, i.e., 51 percent or more, is construed as a Private Sector entity.
• Public asset or service for public benefit: The facilities/ services being provided are traditionally provided by the Government, as a sovereign function, to the people.

Various types of PPP models used are

• Build-Lease-and-Transfer (BLT): a contractual arrangement whereby a concessionaire is authorized to finance and construct an infrastructure or development facility and upon its completion turns it over to the government agency or local government unit concerned on a lease arrangement for fixed period after which ownership of the facility is automatically transferred to the government agency or local government unit concerned.
• 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 it is allowed to charge facility users appropriate tolls, fees, rentals, and charges not exceeding these proposed in its bid or as negotiated and incorporated in the contract to enable the concessionaire to recover its investment, and operating and maintenance expenses in the project. The concessionaire transfers the facility to the Government Agency or Local Government unit concerned at the end of the fixed term.
• Build-Own-Operate-and-Transfer (BOOT): a project based on the granting of a concession by a Principal (the Union or Government or a local authority) to the concessionaire, who is responsible for the construction, financing, operation and maintenance of a facility over the period of the concession before finally transferring the facility, at no cost to the Principal, a fully operational facility. During the concession period the promoter owns and operates the facility and collects revenue in order to repay the financing and investment costs, maintain and operate the facility and make a margin of profit.
• Build-Own-and-Operate (BOO): a contractual arrangement whereby a concessionaire is authorized to finance, construct, own operate and maintain an infrastructure or development facility from which the proponent is allowed to recover its total investment , operating and maintenance costs plus a reasonable return thereon by collecting tolls, fees, rentals or other charges from facility users.
• Build-Operate-Share-Transfer (BOST): a contractual arrangement whereby a concessionaire is authorized to finance, construct, operate and maintain, share a part of the revenue and transfer the infrastructure facility at the end of the period. The proponent is allowed to recover its total investment, operating and maintenance costs plus a reasonable return thereon by collecting tolls, fees, rentals or other charges from facility users.
• Build-Own-Operate-Share-Transfer (BOOST): a contractual arrangement whereby a concessionaire is authorized to finance, construct, own operate and maintain, share a part of the revenue and transfer the infrastructure facility at the end of the period. The proponent is allowed to recover its total investment, operating and maintenance costs plus a reasonable return thereon by collecting tolls, fees, rentals or other charges from facility users.

JV or Joint Venture

In this Joint Venture or JV model, an SPV (Special Purpose Vehicle) is formed to undertake the e-Governance project and /or to provide e-Services. The joint venture can be led by the government or by the private partner depending upon the strategic nature and sensitivity of the domain.